With more than two decades of experience in automotive retail, Adrian Alireza knows how to manage a floor plan. But after opening his first dealership, Island Imports, he knew the success of the venture hinged on more than his instincts. To help him stock his store with in-demand vehicles, he turned to market-based resources such as the monthly CarsStars report included with his Cars.com advertising package.
“I consult it, absolutely. I think it’s a wonderful tool,” Alireza said. “It gives you a feel for what people want.”
Located in the “Navy/retirement town” of Kingsland, Ga., Island Imports offers a selection of 15 to 20 vehicles. Alireza said approximately 70 percent of those vehicles reflect rankings on the latest CarsStars report, which compares the current supply of specific makes and models on Cars.com for his market with local demand among Cars.com shoppers. The more stars – up to five – the more likely a car will turn quickly, especially if it’s in good condition, properly equipped and competitively priced.
“Because I’m a small dealer, I’ve absolutely got to get out of these cars in 45 days, tops 60,” Alireza said.
Stock What’s Hot, Avoid What’s Not
You can use tools such as the CarsStars report to eliminate the guesswork from which vehicles to buy at auction or to purchase on trade. Rather than relying on emotion and basing your inventory decisions on what you like and hope will sell, you now have solid market intelligence. Understanding the inventory supply-demand relationship for your community gives you an edge on your competitors by helping you to:
Eliminate lot rot. Nothing undermines your gross like aged inventory. By stocking only sought-after cars, you minimize the time and profit you lose to wholesaling vehicles that ultimately collect more dust than inquiries.
Know when to cut your losses. When a car doesn’t sell, despite your best merchandising efforts, checking its status on the CarsStars report can tell you if it’s auction time. The faster you move the car, the less money you’ll lose and the sooner you can put a more popular model in its place.
Mine hidden gems. Perhaps you haven’t aggressively marketed some cars at your store because you didn’t know what you had. Moving these unrecognized vehicles to the front of your lot and showcasing them in your online specials will create the attention and sales they deserve.
Fetch a better price. Having cars that shoppers want but your competitors can’t get positions you to sell them at a premium while turning it quickly and generating top gross.
Manage your acquisition costs. While some cars are worth the extra money you’ll have to spend to obtain them for your inventory, others aren’t. Equipped with the CarsStars report, you know the difference and can shop accordingly.
Because internet advertising is so much more trackable than traditional media, it creates information you can leverage to more efficiently – and profitably – manage your store. In working with third-party service providers, look for companies that can share this data with you in a format that is both easy to access and easy to incorporate into your business operations. Knowing how many times a particular car is listed on automotive shopping sites and the number of car buyers searching for it, for example, is a key factor in the equation that helps you have the right cars at the right time at the right price.
For More Information
The monthly CarsStars report is just one of several free, useful market-based tools available to Cars.com dealers through OnlineAdReports, which can be accessed through MyDealerCenter. To learn more about OnlineAdReports, please contact your sales representative or call 800.298.1460.