I know it’s a very strange title and I know some of you may be thinking you would like to help me with it. Have you ever actually known something and a light bulb goes off and then you really know it? It’s one of those revelations that makes you wanna reach up and slap yourself.
I, like many of you, continue to put part of the blame on the lack of average gross profit on the Internet and the stress it creates on pricing. There is no doubt it’s a factor in bringing your average gross profit down, but it’s not the most important one.
But before I share my “slap myself in the face” revelation with you, I have some questions for you:
1. How many of you struggle to make gross on those units over 45 to 60 days old?
2. Is it fair to say the grosses on 45 to 60 day old units pull your average down?
3. What if you could eliminate 45 to 60 day old units?
4. What would the impact be?
5. Have you taken the time to analyze the average grosses on 20 day old cars vs. grosses on 45 to 60+ day old cars?
Why hasn’t your light bulb gone off? Why haven’t you smacked yourself?
Don’t we all know that the lack of speed kills your used car business? Don’t we all know that if you have speed you win? What’s it gonna take for you to realize it’s not just the price on the Internet that’s killing your grosses, but the slowness of your processes and marketing.
I write and speak to groups about “Life Cycle Management” with the passion of a Baptist preacher at a church rival on a hot day in July.
If someone said to me, “Tommy name the top three things dealers must understand to improve their used car business” it would be:
1. Get more involved
2. Press your cost down
2. Life Cycle Management
Since I’ve often written and spoken about all three, I’m not going to take up any more of your time writing about them and especially “Life Cycle Management” in this article.
I think you know what it’s all about and since you do, and since you keep struggling with average gross profit, this might be a good time for you to reach up and slap yourself upside the head. That’s all I’m gonna say. Tommy Gibbs