It’s Thanksgiving and time to give thanks. If you’re like me for sure you have a lot to be thankful for. Among many things I’m thankful for are your friendship and support.

Thanksgiving also starts the close out of the year. It centers around Black Friday and rolls through the last week of the year. Like it or not, 2017 is already here. I’ve listed some very basic ideas you need to take into consideration that will help you finish strong and get ready for your best year ever.

A. Re-commit yourself- and your thinking towards being the very best you can be. Take stock of all those great ideas running around in your head. Write them down and make a commitment to get them done by certain dates. Post it on the wall in several places that you will see frequently. If you have a private restroom, put it on the mirror.

B. Re-evaluate-the appearance of your inventory. Let’s do a little checklist:
1. Look at your inventory online. Are they all there? 40 + pictures & prices posted?
2. Take a lot walk. Are the vehicles in straight lines?
3. When was the last time the entire lot was rotated?
4. Are you using angles to display your inventory?
5. Do you have hang tags? If so, do they all have hang tags?
6. Are they nasty, dirty on the outside?

C. Refocus-To be successful in the used car business (or any business) you have to be focused and be totally committed. Your entire management team has to understand your commitment to the business. Make sure a weekly lot walk is part of your routine. Every car in your inventory must be touched. If it’s in service, touch it. If it’s in prep, touch it. If it’s in the budget center, touch it. Everybody touches it.

D. Re-Recon-Take every unit over 30 days old back through a recon process. (You’ve already missed your best window of opportunity to make gross; that would be the first 20 days.)

E. Re-Invest-in yourself and your management team. Do something to gain some knowledge. Hire me, visit CarMax, or visit a dealer friend in another state that does a good job in used. Attend a workshop. Join a Twenty Group. Join a Used Car Twenty Group. (Hire me!) Do something besides sitting there and waiting for something to happen.

F. Re-think- your management team. Do you have the right person running your used car operation? Yes, that person may have been with you for years. Loyalty sometimes equals mediocrity. Maybe they have some great skills, but the fact is that you may not be making the best use of their talents. Used car managers today have to be “Asset Managers.”

The dealers with the most successful used car operations are those who have taken ownership of the used car department. The more involved you get, the more success your dealership will have.

I’m thankful for lots of things this holiday season and I’m especially thankful that you’ve taken the time to read my little Zingers. That’s all I’m gonna say, Tommy Gibbs

Ok, I don’t hate them, but I’m becoming less and less of a fan of them for sure. As a new car dealer for over 20 years I found packs to be a useful and profitable tool to increase profits and flexibility.

As for being against packs, if they are still working, stay with them. I just question if they are working as well as some dealers think they are.

I believe that in the big picture they have outlived their usefulness. If you review the history of packs, they came about in part because managers worked from cost up. Dealers figured out that if the manager’s target for front gross was $1000, that they would hit that number if they had packs or not.

It’s very much in the family of why we charge full retail in the service department to the used car department. Over the course of time charging full retail and packs didn’t hurt front gross and it actually made the dealership more money. Over time packs have become their own profit center.

These theories and concepts have worked well for a long period of time. The Internet has dramatically changed the game. More and more dealers are pricing to market vs pricing based on what they have in the car.

They are not working from cost up like they did in the good old days. And, the sales person has very little control over grosses, as the price has been set before the customer even shows up. The reality is it makes very little sense to pay sales people on gross profit in today’s market.

As my good friend Dale Pollak likes to point out, packs are nothing but a tax on your vehicle. You are taxing yourself and making it that much more difficult to be competitive.

As more and more CarMaxs, Varooms, Echo Parks, Texas Directs, Carvanas, Auto Nation USA get into the game, the less relevant packs (taxes) will become. When you’re being charged full retail in service and you also have packs, you are adding additional cost to your inventory that others don’t have.

Every time you go to appraise a unit or go to the auction, those additional charges are running around in your head and are making it that much harder to acquire inventory. I do believe that with better strategies dealers can improve their average gross profit…but, not by much…thus the only way to win the game today is to sell more used cars. To sell more used cars you have to be able to get more used cars. To get more used cars you have to have an acquisition advantage.

If you’re still using packs keep using them if they are working. But, you should keep asking yourself if they are really working as well as you think and if they are putting you at a disadvantage in the marketplace.

I don’t hate packs, but I do hate it when we lie to ourselves. That’s all I’m gonna say. Tommy Gibbs

By now you’ve closed out October, twisted over the numbers and gone back to work. Not so fast.

October is the perfect month. “Perfect for what?” you say. Perfect for figuring out where you’ve been and where you want to go.

I can’t say that math was one of my best subjects, but I can divide by 10 real easy. At a glance I know what the averages are for any line item expenses, sales volume and gross profit.

What also makes October a perfect time is it sets the stage for the next year. Now is the time to start planning for 2017. Waiting until the last week in December to get your plan together is a really bad strategy.

This is the perfect time to dig in and firm up your fundamentals in all departments. This is the time to get back to basics. This is not the time to cut back on your training.

This is when you need to amp up your thinking, stretch your organization and stretch your imagination. If you don’t have a solid foundation of basic processes you will never maximize
your success.

This is the time to take control of the “evaporation factor” that’s been occurring all year long. This is the time to stop the “process bleeding.”

Your long term plan should include joining a Twenty Group and attending the NADA convention.

We all get lazy, and get caught up in our daily routines. Attending these meetings gets you revitalized. It gets you outside of your daily box and opens your eyes up to what the possibilities might be. Seems like a no brainer.

This is the time to make those plans. Teamwork is critical if you’re going to maximize your bottom line. To keep your team on the same page you have to constantly communicate to them what the expectations are and what processes they are expected to follow.

There is no “shake ‘n bake” solution. You don’t fix it and walk away. You fix it and re-fix it.

What to do?

1. Ask yourself if you can improve your processes? If you focus on revamping your processes, what effect do you think it will have on your business? It is an absolute fact that regardless of how well disciplined you are, over time your processes are going to evaporate. The best piece of advice I can give you is to lock yourself and your management team in a room and review every detail of your selling processes. Be brutally honest with yourself. Then take the necessary action to get yourself back on track.

2. Can you improve your team? Got the wrong players? Now is the time to make the changes. If you already have the right team in place then it’s time to let them know what your expectations are and show them the plan and the path to achieve those expectations.

3. Don’t think of your planning as “you now having a plan.” Think of it as a “mission.” Plans can fall apart. When you’re on a mission you stay after it until you succeed and then you stay after it some more.

I’m on a mission to get you to re-think what you’re doing. I’m on a mission to get you ready. That’s all I’m gonna say, Tommy Gibbs

One of my favorite subjects is talking to management teams about not missing trades. I know this is hard for you to believe but without exception I’m always told, “We never miss trades.” Makes you go hmmm, doesn’t it?

Here’s another way to think about it. Have you ever made a deal because you put more money in a car than your competitor? I’m thinking the answer is yes. Therefore, your competitor missed a trade. I’m also thinking your competitor would say they never missed a trade.

I do believe most of my readers are smart enough to realize that yes, we all miss trades once in a while. Someone’s making those deals. And yes, they may have very well buried themselves in those units we “missed,” but they got to make a deal and we didn’t.

A common term in today’s business is “look to book.” If you’re not familiar with the term, it simply means; how many units did we appraise and how many did we get. If you appraised 100 units this month and you traded for 25, then your look to book is 25%.

I’m often asked, “What should my look to book be?” Most people would say your look to should be 50 to 60%.

Tommy says you should know every day what your look to book happens to be and think in terms of pressing the number up. The more you can press your look to book up, the less of a need you will have to go out and purchase units.

If you’re going to bury yourself in a unit, you are far better off to bury yourself in a trade.

If you raise your “look to book,” you’ll miss a lot fewer trades. Trading for more cars means you’re selling more cars. That’s all I’m gonna say. Tommy Gibbs

This is a scary time of the year. Ghosts, goblins and creepy things are everywhere.

Lots of things scare me. Here are a few:

It scares me when a dealer hires a buyer. It’s always done with good intentions, but more often than not it doesn’t have a happy ending. The buyer I’m talking about is the one the dealer is putting on the road to go off to wonderland to buy cars. Months down the road the dealer is stuck with a lot of aged units and wonders what happened?

It scares me when a dealer makes a wholesale profit. There are rare sets of circumstances when it can be done. Maybe the dealer cut his/her teeth in the wholesale business or maybe they run an in-house auction for the junker units. But other than that, there aren’t many legitimate reasons for making a wholesale profit.

It scares me when a dealer tells me, “We never miss a trade.” I understand the intent. It’s the right thinking no doubt, but never think for a minute that you don’t miss trades. Everybody misses trades. I’m thinking if you’re making that wholesale profit you might be missing more trades than you think.

It scares me when a dealer hires a new used car manager and turns ’em loose. They come on board with great stories of how much they have accomplished at their previous stores. (Notice, stores is plural.) So, the dealer says, “Go get ’em.” What should happen is the dealer or GM becomes Siamese twins with the new used car manager for the next 90 days. Every minute that the dealer can spare should be spent with this used car manager listening, teaching, learning, coaching and sorting out fact from fiction.

It scares me when a dealer doesn’t know what their oldest used car in stock is. Better yet, the used car manager doesn’t know. To add insult to injury, no one knows where it’s parked. These are your sickest children. How can you not know?

It scares me when a dealer tells me they get units through service and recon in 3 days. There are some that do. Most don’t and most don’t really know. The best and worst answer is the same. “I don’t know.”

It scares me when a dealer has a belief that it’s ok to keep used vehicles for 75 or 90 days. I might understand it if we were living in the 1970s. Back then maybe we just didn’t know any better. How can you not know better in today’s information society? How can you not understand the fact that you don’t make money when vehicles sit that long? How can you not know you’re working with a depreciating asset?

It scares me when a dealer isn’t tracking GAP, ROI and 30/30. You can’t fix what you don’t know.

I’m not easy to spook, but a lot of things scare me and they should scare you too. That’s all I’m gonna say. Tommy Gibbs