One of the hottest issues facing any dealership today is slow used car inventory turn. Nobody wants to face “lot rot,” because in this market, if your inventory doesn’t turn you get burned.
Today, the majority of your inventory turns within a month or two. But what about the remaining inventory that’s not moving? Here are some smart ideas to turn the tables on slow inventory turn, and avoid stocking hard to sell vehicles in the first place.
The better you tell it, the faster you sell it.
Every vehicle has a story to tell. But the challenge is to tell that story in a compelling way that will make a strong connection with your shoppers. The key is to re-merchandise the vehicle using some of the same techniques online that you use on your lot, and you can do it by following four proven pointers.
1. Get aggressive with the price.
Sometimes, the bottom line is the best motivator. Philosophies on price differ greatly among dealers, except when it comes to moving lot rot. In fact, 89% of dealers say that changing prices helps generate leads on vehicles that have been online for an extended period.1
2. Move it to your hot spot.
If a vehicle isn’t selling on your lot, what do you do? You move it up front and use all the bells and whistles you can to make it stand out. Use that same approach online. Put that vehicle front and center on your web site, and call special attention to it just like you would on the lot.
3. Use your photo opportunities.
It’s no secret that online photos help sell vehicles. According to a recent dealer survey, 83% of dealers believe that multiple photos drive higher quality leads.2 So if the vehicle isn’t moving, examine those photos again. How well do they show off the car? Do you offer multiple angles including the interior and the exterior? Use fresh backgrounds to make the vehicle look different. For those in northern states, don’t allow your inventory to be dated by a photo that shows snow in the warmer months or flowers in the colder months. Don’t let the shopper see the same old photos of aged inventory.
Your web site is your virtual showroom, so let your customers walk around, kick the tires, and climb behind the wheel. It also pays to know that in the customer’s mind, multiple photos prove that you aren’t “hiding something.” In short, posting fresh photos can help turn lot rot into something hot.
4. Always do the detail work, remember the devil is in the details.
Would you spend thousands of dollars on a product that provided only two lines of abbreviated description? Unfortunately, that’s all many online car shoppers get. Remember, your shoppers went online for information, so give it to them. Get specific about that particular vehicle, tell its story.
Include as much specific information about the vehicle in the information in your Seller’s Notes, including physical condition reports. It’s critical to use every detail to draw these shoppers to your dealership, because if they don’t get enough information from you, they can simply move on to another dealer.
Avoid lot rot altogether.
Avoid lot rot altogether. Use the free reports provided by your online partners such as Cars.com’s Inventory Demand Index when you’re at auction to see what’s selling before you buy. The Inventory Demand Index reports show you the cars most frequently searched vehicles in your market each month. Remember, you have the power to plan ahead, so use your edge and keep your inventory turning.
Fred Haney is a cars.com National Training Manager
1, 2 Magid Associates, Inc., “Dealer Understanding and Evaluation of Online Merchandising,” December 2004.