“It doesn’t take talent to play hard.”
Derek Jeter

Some of the most successful dealerships have an all out assault on trying to buy cars from the public and their customer base.

Buying cars at the auction can help you fill some holes, but the reality is you need to turn those units pretty darn fast. More often than not, you’re paying more for them than you are for those at the front door.

Mark O’Neil, the former CEO of CarMax, told me a few years ago, the number one thing that turned the CarMax operation around was when they started a big push on buying cars from the public.

Are you focused on stepping up when a customer has something to trade? Are you really putting “all the money” on it?

Have you upped the intensity with the concept of buying more used cars from the public?

Have you upped the intensity of buying more used cars from your customer base?

Are you really making the effort? Do you have signs in the customer lounge telling the customers you want to buy their cars?

Do you have a board posted in the lounge advising your customers of the cars you’re looking for?

Have you put a process in place for the sales people on how to handle customers that want an appraisal on their cars? I mean a real process with a real appraisal they can take with them good for 7 days?

1. Step up on the trades.
2. Make sure you have processes in place to handle those customers trying to sell to you.
3. Make sure you are mining your customer base for cars you can sell.
4. Post signs in the customer lounge that tell your customers you want their cars.

None of this is rocket science, but with a little more focus, and a whole lot more effort, you will find some of your most profitable used cars located right under your nose.

Start playing a little harder. And a little smarter. That’s all I’m gonna say. Tommy Gibbs

So, how was your June? How have your first six months been? It’s July. Half the year is gone. Kinda scary isn’t it?

Some of you have had a great first half. Some of you, not so much.

Some of you have been running full speed ahead. Some of you have been dragging through the sand.

Something has been holding you back. There may be some legitimate excuses, but maybe you just had the wrong plan in place. Just because you had the wrong plan does not mean it’s too late to fix it. You’ve still got 6 more months to go.

Those of you who have had a good first 6 months need to be cautious of becoming complacent. Even though things have been going well, you would be very smart to review how you can make things better as you tackle the second half.

Everything we do is about choices. You can choose to let things be as they are or you can choose to dial it up a notch or two.

To do so means to review your plan and the strategies you have in place. And, make the changes that are necessary to get you where you know you need to go. That’s all I’m gonna say, Tommy Gibbs

The most misunderstood topic I discuss in my workshops are SETS & SUBSETS. If you’re anti SETS & SUBSETS you might want to read just a bit further.

I will be the first to agree SETS and SUBSETS are not for everybody. They are especially not for you if you haven’t solved a lot of your other used car issues.

I’m not going to try to sell you on SETS & SUBSETS, but I do want to show you that first, it’s not all that complicated and second, it’s something you’ve done with success in the past in one way or another.

SETS & SUBSETS are all about setting up a price leader to drive traffic to the store.

What’s so bad about that? Don’t you do that right now? I have to believe that in one way or another you do it with your new car business, so why not do it with used?

The lead or number 1 car is the most important car in the SET. You can do SETS in 2, 3, 4, or 5 car SETS. Experience has taught me that going deeper than 5 just confuses the issue and makes it much more difficult to manage.

If you had 5 similar cars and you wanted to advertise them as a group (you did this back in the program car days), wouldn’t it make sense to advertise the least desirable of the 5 as a price leader in hopes of driving traffic to the other 4, or better yet, to your store?

The lead car is simply the least nice of the group. Make it safe, but don’t make it too pretty. This is not about bait and switch. It’s about the customers transferring themselves to another car in the SET or to one out on the perimeter.

The key to SETS is picking the right lead car. It needs to be desirable in the “public’s mind,” and most important is that it should be the latest model you can find for that SET.

Two of the biggest mistakes that dealers make are trying to make a profit on the lead car and picking too nice of a car to be the lead.

The lead car is a “loss leader.” More often than not the car that dealers pick to be a lead is really a number 2 car. A 2 car is a profit maker and one that you’ve fully reconditioned, so you would want to make sure you haven’t made it the lead.

If you want SETS to work, you have to advertise your lead car at what you have in it or less. If you try to make a profit on the lead car the traffic probably isn’t going to show up. The sole purpose of the lead car is to drive traffic to the dealership.

When done correctly one of three things will happen:

1. The customer shows up and buys the lead car.

2. The customers transfer themselves to the 2, 3, 4 or 5 car.

3. The customers buy something out on the perimeter.

The key is that the customers showed up on your lot today and you have a chance to sell them something.

So, there it is. SETS described in its simplest form. It’s not all that complicated or any great trickery with the consumer. You’re just advertising a price leader and giving the customers some other choices when they show up.

That’s all I’m gonna say, Tommy Gibbs

If you’ve heard me speak you know the subtitle of my workshop is, “It’s Not The Big That Will Eat The Small, It’s The Fast That Will Eat The Slow.” I stole that title from a book by Jason Jennings and Laurence Haughton. Bottom line is speed is critical to the success of your business.

Your used car business and your overall business model require you to be able to travel at the speed of Mach 5. You have to think fast and move fast in today’s market.

I often refer to the lack of speed as “drag points.” Drag points are those places along the way that drag you down, hold you back, destroy morale and make you very inefficient.

Some typical “drag points,” are:

1. Car sits too long before someone makes a decision on what to do with it.
2. Car spends too many days in the mechanical shop due to shop or parts issues.
3. Car sits a few more days before it gets into “clean up.”
4. Car takes too long to get out of clean up.
5. Car sits too long before photos are shot.
6. Car’s photos aren’t posted online in a timely manner.
7. Car’s price changes are made too late in the cycle.

Most dealers would tell me they get their used cars through the system and ready to go in 2 to 3 days. The reality for most is it takes about 7 to 10 days.

The fact of the matter is you make the most money on a car in the first 20 days. If it’s hung up in the system for 10 days you just blew 10 of your best selling days.

Yes, I’m simply telling you something you already know. But knowing something and fixing something are two different things.

The Dealer, the Executive Manager, the General Manager or the Owner Operator has the power to fix any and all of those issues.

Sadly, some can’t or won’t make the changes necessary to put the store on the fast track. So, they stay on the slow track to nowhere. Speed wins. That’s all I’m gonna say, Tommy Gibbs

I love winning. I love winning at anything. Sports, checkers, or the game of business. You name it and I love winning.

In last week’s newsletter I said I wanted to be sold on the logic of keeping inventory longer because used cars are hard to find.

That newsletter was written to see if someone could justify holding inventory past 45 to 60 days just because they can’t find replacement inventory.

I was very sincere when I said in the newsletter to “sell me” on the logic behind doing so.

Over 7,000 people get my newsletter each week. I get an extremely high open rate. Sometimes as much as 30%. Trust me, that’s a big number.

Now guess how many people attempted to sell me on the strategy of keeping cars longer? None. Not even one.

If you won’t try to sell me, how are you able to sell yourself and your staff? Sometimes I think someone is selling you on a bad business strategy instead of you doing what you know is the right thing.

Many of you are winning because you know turning your inventory in 45 to 60 days always wins. Yep, I win, you win, we all win when you turn your inventory. I love winning, that’s all I’m gonna say. Tommy Gibbs

I’d like to think I’m a great salesman. Most great salesmen are easily sold. I wanna be sold. I’m begging to be sold. I’m begging you to sell me.

So come on, sell me on why it’s ok for you to keep used car inventory past 45 to 60 days. Recently, I’ve had a few dealers tell me inventory is so hard to find that they are keeping cars longer.

How does that help your inventory problem? Come on, sell me.

Does keeping a car longer ever make you “more money?” Come on, sell me.

Do you make a greater ROI when you sell a car at 90 days vs. 30 days? Come on, sell me.

When you keep a car longer, do you make more money on it than if you sold it sooner? Come on, sell me.

You can’t get the units through reconditioning fast enough so you want to keep them longer? Come on, sell me.

You can’t find inventory so you want to hold them longer? Come on, sell me.

The big volume players such as CarMax and Texas Direct have to buy most of their inventory. You can’t find cars, so that’s a valid excuse for keeping them longer? Come on, sell me.

Do you really think holding cars longer is the answer? Come on, sell me.

I’ve never had a dealer who was committed to a short turn say they regretted the strategy. I’ve had lots of dealers regret keeping cars past 60 days. Come on, sell me.

I like being sold. Come on, sell me. I’m waiting. I’m still waiting to be sold. That’s all I’m gonna say, Tommy Gibbs