Several times a week someone will ask me, “What should the percentage of wholesale units be relative to the number of used cars retailed?”

While there may be some statistical data with 20 groups telling what dealers are averaging as a percentage, that doesn’t mean that there’s an acceptable number to be shooting for.

My answer to the question is, “There is no number.” Having said that, if you’re the Dealer or General Manager it’s a number you should always keep your eye on.

I’m a bit old school, but as a dealer I looked at every retail deal and every wholesale deal once it had billed and booked. My initials went on every deal.

I would often pick the phone up and say to the used car manager, “Tell me about this unit you lost $500 on” or “Tell me about this unit you wholesaled and made $300 on.”

I wanted to plant the seed in the used car manager’s mind that I was always looking at these units that were being wholesaled. What I was trying to do was create a little element of doubt as to whether we could have retailed this unit.

I know that there may be some dealers who may not agree with this statement, but I truly believe you should retail everything that has a breath of life left in it. Why should you let someone else gain a customer and make the money?

Sure, you will have some issues. But the pluses far outweigh the minuses to wholesaling a lot of units. We are in the retail automobile business and we should retail everything we can.

Don’t worry about the percentage. Worry about retailing more units. That’s all I’m gonna say, Tommy Gibbs

One of my favorite things to do when working with dealers is to discuss their oldest used vehicles in stock. If the oldest unit is 55 days old or 155 days old, 99.9% of the time they all have a storyline tied to them.

The conversation will often evolve to where the used car manager will say “We have it priced #1 in the market, it’s a nice car and I don’t know why it hasn’t sold.”

Some of you won’t like my response. But, my response is based on reality. And the reality is, if it’s priced #1 in the market and it still hasn’t sold…it’s not cheap enough.

We’re not talking about a fresh piece. We’re talking about your oldest unit in stock. And, it may have a flaw you failed to identify soon enough.

You’ve had it way too long. It’s time to make it “cheap enough” and make it go away.

That’s all I’m gonna say, Tommy Gibbs

Business has been pretty good hasn’t it? If you have access to the financial statement take a peek at your net profit to sales percentage. Are you in the 4 to 6% range? If you’re only in the 2% range, you could be in trouble when business starts to go south.

Historically in this business dealers make the most money when they are coming off of tough times. That’s easy to understand. When things get tough dealers tighten up on expenses and get back to basics.

Thus when the worm starts to turn, dealers rock the bottom line for a short period of time. But as we all know, the better business gets the sloppier we get.

It’s been very good for a number of years now. So, where are you? Are you letting things get out of hand? Are you making money in spite of yourself?
Is it the market or is it you that’s making it happen?

Ask these questions of yourself:

1. Have you dissected every expense on the expense page?
2. Do you have too many people in the wrong places and not enough in the right places?
3. Is your selling system the selling system you think
you have?
4. Are you evaluating every trade that you don’t make?
5. Are you holding a daily “save-a-deal meeting?”
6. Are you doing a trade walk?
7. Are you utilizing my “life cycle management process?”
8. Are you evaluating all the wholesale pieces to see if they have life in them?
9. Do you have a photo booth and is your website the best it can be?
10. Have you shopped your own dealership? Have you shopped CarMax?
11. Do you hold your staff accountable?
12. Can you shorten your selling process?
13. Are you using vAuto to buy and price your units correctly?
14. Do you have the right staff that’s getting daily coaching & training?
15. Are you still doing business the same way you did 10 years ago?
16. What’s the turnaround time for a used car from the time you own it until the time it’s ready for the line?
17. Are you leading the way or are you talking the way?
18. Are you mining your customer base for nice used cars?
19. Are you relying on packs to save your gross profit?
20. Are your pay plans old, outdated and not in tune with today’s market?
21. Is your volume and gross going up or down?
22. How many turns a year are you getting with your used inventory?
23. Are you tracking ROI/GAP?
24. Are you forecasting or “hopecasting?”
25. When was the last time you let Tommy Gibbs help coach you?

These are great questions you should be asking yourself. That’s all I’m gonna say, Tommy Gibbs

Did you know that for the year 2015 you need to focus on year models 2012, 2011 and 2013s in that order?

I’ve studied this and researched it for years. Unless there is something strange and unusual about your market here’s the way it has been going back to 2002.

If you get a chance to appraise a car that happens to be any of these year models you need to think long and hard before you try to steal it. These units are going to turn more or less regardless of the make or model.

Of course you’re still going to use your vAuto appraisal tool, but these units generally fit a price point that more buyers can afford.

I would suggest you further research this by using the Experian tool called Auto Count USA. It will give you the top selling models for your market.

Use this SHEET to list them and keep a focus on the year models listed at the top of the page.

I’m often telling you things you already know, because I know how easy it is to lose focus.

Stay focused on these units and you will make more deals and sell more units. That’s all I’m gonna focus on for today, Tommy Gibbs