1. Inconsistent and Inadequate Training-Well, that’s a shocker. Sure you train; you train when the mood strikes or you do it for 30 days and then it falls apart because you’re too busy selling cars or whatever. If your sales staff isn’t polished enough to be able to justify the price then you are not going to get the desired gross; it’s just that plain and simple. Get busy training and you’ll get more gross. (If you have a bunch of knuckleheads working with you then all the training in the world isn’t going to make a difference.)
2. Lack of Information-Many years ago when I started selling cars we all had an inventory sheet with prices, etc. As antiquated as that may seem, it’s better than most dealers do today. At the very least you should have a lot walk once a week with all managers and all sales people. The more your people know about your inventory the more your gross goes up. Duh.
3. Poor Acquisition strategy-Still shooting from the hip? Still not a believer in technology? That’s cool. Keep on doing it your way and your grosses will be anything but hot. Technology is not the only piece of the equation. Common sense has to be a part of the deal. But, common sense without technology is like a peanut butter and jelly sandwich without the jelly. You can survive on just peanut butter but it’s a lot better when you add the jelly.
4. Not shooting the Moon-Buckets, buckets, and more buckets is not the total answer. Pushing cars into a bucket based on days in stock is like putting a square peg into a round hole. You can’t start every car off at a specific percentage. There are some that you need to start way high. Some very low. Once in a while you gotta “shoot the moon.” Since the beginning of this business high average gross profit has been achieved by hitting a home run once in a while. You can’t hit it if you don’t take a full swing.
5. Failure to Track GAP & ROI-if you’ve been reading my material you know that GAP Stands for “Give-a-Way Profit” and ROI stands for “Return on Investment.” (I originated GAP, some smart guy like Einstein originated ROI) You say you have too much to do to keep up with GAP and ROI. Isn’t it worth an additional $500 plus per car to do so? Don’t be so lazy.
6. Not selling in Today’s Market-Your most profitable car is a 20-day car. If you are retailing a lot of cars at the 30, 45, 60 plus day mark you don’t have a chance. Speed wins; the lack of speed kills. It’s as simple as that.
7. Online delays-Lousy processes in service and recon cause a car not to get online in a timely manner. The more days it sits the more your average gross is going down. You never get to sell a true “20 day” car because it’s been hanging around in the shop for 7 to 10 days.
8. Lack of quantity and quality of photos –stop reading this. Go look at the used cars on your website. Now go to texasdirectauto.com and look at their cars. If yours don’t look as good as theirs then you don’t have a chance. CLICK HERE FOR TEXAS DIRECT.
9. No Early Warning Radar-You’re asleep at the wheel. You have to be able to spot a problem child on day one, not day 44 or day 59. Every one of your aged units has a story to go with it. That story started back on day one. You have to be smart enough to have an “Early Warning Radar” system in your arsenal. Fix your Radar system and your grosses will improve.
10. Not Committed-well, well, imagine that? I know, I know you say you’re committed to the used car business, but are you really? Let’s see how committed you are. How many of 1 thru 9 can you say you are all over like “white on rice?” If you can’t say 100% to all of them then you are not really committed and you’re lying to yourself and your staff. All is not lost. What better time to commit than right now?
Getting committed will take some planning, a lot of effort and hard work. There will be push back from some staff members. You really have two choices. Let your grosses keep going south, or do something about it. Fixing 1 thru 9 will go a long way towards having the best bottom line in the history of your business.
That’s all I’m gonna say, Tommy Gibbs