Several times a week someone will ask me, “What should the percentage of wholesale units be relative to the number of used cars retailed?”
While there may be some statistical data with 20 groups telling what dealers are averaging as a percentage, that doesn’t mean that there’s an acceptable number to be shooting for.
My answer to the question is, “There is no number.” Having said that, if you’re the Dealer or General Manager it’s a number you should always keep your eye on.
I’m a bit old school, but as a dealer I looked at every retail deal and every wholesale deal once it had billed and booked. My initials went on every deal.
I would often pick the phone up and say to the used car manager, “Tell me about this unit you lost $500 on” or “Tell me about this unit you wholesaled and made $300 on.”
I wanted to plant the seed in the used car manager’s mind that I was always looking at these units that were being wholesaled. What I was trying to do was create a little element of doubt as to whether we could have retailed this unit.
I know that there may be some dealers who may not agree with this statement, but I truly believe you should retail everything that has a breath of life left in it. Why should you let someone else gain a customer and make the money?
Sure, you will have some issues. But the pluses far outweigh the minuses to wholesaling a lot of units. We are in the retail automobile business and we should retail everything we can.
Don’t worry about the percentage. Worry about retailing more units. That’s all I’m gonna say, Tommy Gibbs