How Many Should You Stock?

Like many things in life, either we over-think them or we don’t think about them at all.

I have a little drill for you. Take a look at your retail used cars sales over a 24-month period. Graph out the sales for each corresponding month.

You should be able to spot trends in your sales that are directly tied to each month of the calendar year.

Even though we want to be optimistic and are always thinking of increasing our sales, we also need to be realistic. Maybe realistic is a 10 to 20% increase for each month. I like the term “optimistic-realist.”

The problem I often see is that dealers’ inventory stocking levels are the same for the slow months as they are for the busiest months. If you know January is your slowest sales month, then why would you have the same stocking levels as you do in July?

I have a hard time buying into the concept that you are stocking up on inventory in January to sell in May. If you’re totally sold on that idea then do yourself a favor and run the ROI on those units when you finally sell them and let me know how it turns out for you.

It’s ok to be optimistic, but don’t be “stupidmistic” (yes, I make words up) when it comes to how many you’re going stock. That’s all I’m gonna say, Tommy Gibbs