Improving Gross Profit Part 3

1. Think in terms of improving gross in small increments. Try paying the managers a bonus for achieving nominal increases each month. Start by improving gross by $50 a unit. Do that over the next year and you will see a slow and effective way to increase your gross. You can only eat the elephant one bite at a time.

2. How could I talk about your grosses without mentioning “Life Cycle Management?” Life Cycle Management is designed to help you create a sense of urgency on those cars that are most likely to kill your grosses. The faster they go away the better your gross will become. My UpYourGross software tool puts you on the path to better grosses and more efficiency.

3. Track GAP and ROI. When you do, grosses go up. How much are you giving up once the customer shows up at your store with a price from the Internet? If you don’t know then you can’t fix it. (GAP-Give-Away-Profit)

4. Improve your look to book. You make the most money on units you trade. You will trade for more if you get serious about improving look to book. Review every appraisal from the previous day in your “save-a-deal” meeting every morning. Someone in management should be responsible for calling every customer that had a trade and up the ante.

5. Shoot the moon on the right stuff. Since the beginning of the car business, higher grosses are driven by some home run cars. You have to understand which ones are home runs, singles, doubles, and triples.

6. Try some old-school. If you’re not a true one-price dealer serve up an under-allowance on every trade. It should be part of your discipline each time you appraise a unit.

7. If you’re still struggling with gross maybe it’s time to let me train your entire management team? My message is powerful and long-lasting.

Fix what you can fix. That’s all I’m gonna say, Tommy Gibbs

Are You Worried Yet?

There are a lot of dealers concerned today about the lack of new car sales in January and February. Some dealers are blowing it off that the weather killed them. Maybe it did. Maybe it didn’t.

If you understand that this business runs in cycles and if you understand that a new vehicle is pushing $35,000 with payments of $550 or more then logically it’s not just a weather problem.

Many of us remember back in 2008 and 2009 that the world was coming to an end. Actually, for some new car dealers, their world of selling new cars did end.

I’ve often compared those tough years to the Great Depression.

My parents and grandparents went through the Great Depression. How they thought about money, debt and resources were very different than those of us who have come along over the last 50 years or so.

Just like during the Great Depression, I was convinced back in 2008 and 2009 that we had learned some valuable lessons that we would never forget. I’m starting to realize just how wrong my thinking was.

Our reliance on new car sales and what they bring to the table has never been greater. New car sales are a good thing, but when we rely too heavily on them for our bottom line, it can put us in a trick bag when things go south.

There were hundreds of dealers who lost their franchises in 2008-2009. Many of those dealers attempted to turn those nice buildings into used car operations.

A good number of them failed. The reason they failed was
because of their reliance on new car sales they had never taken the time to study and learn the used car business.

If you are the Dealer, General Manager or General Sales Manager, you’d be wise to amp up your thinking on used cars. If you have high dollar aged units you should be really concerned.

Sure, enjoy your new car business as much as you can for as long as you can, but never forget, the stronger you are in used cars the more new cars you will sell and the less likely you are to have your own Great Depression.

If you’re smart you should be asking yourself, “what if this isn’t a little weather blip on the map, but a tough couple years ahead of us?”

You may not always be able to sell new cars, but you can always sell used cars. That’s all I’m gonna say, Tommy Gibbs

Improving Gross Profit Part 3

1. Think in terms of improving gross in small increments. Try paying the managers a bonus for achieving nominal increases each month. Start by improving gross by $50 a unit. Do that over the next year and you will see a slow and effective way to increase your gross. You can only eat the elephant one bite at a time.

2. How could I talk about your grosses without mentioning “Life Cycle Management?” Life Cycle Management is designed to help you create a sense of urgency on those cars that are most likely to kill your grosses. The faster they go away the better your gross will become. My UpYourGross software tool puts you on the path to better grosses and more efficiency.

3. Track GAP and ROI. When you do, grosses go up. How much are you giving up once the customer shows up at your store with a price from the Internet? If you don’t know then you can’t fix it. (GAP-Give-Away-Profit)

4. Improve your look to book. You make the most money on units you trade. You will trade for more if you get serious about improving look to book. Review every appraisal from the previous day in your “save-a-deal” meeting every morning. Someone in management should be responsible for calling every customer that had a trade and up the ante.

5. Shoot the moon on the right stuff. Since the beginning of the car business, higher grosses are driven by some home run cars. You have to understand which ones are home runs, singles, doubles, and triples.

6. Try some old-school. If you’re not a true one-price dealer serve up an under-allowance on every trade. It should be part of your discipline each time you appraise a unit.

7. If you’re still struggling with gross maybe it’s time to let me train your entire management team? My message is powerful and long-lasting.

Fix what you can fix. That’s all I’m gonna say, Tommy Gibbs