If you own or manage a car dealership, you know that one of the most vital components of success for your business is inventory.
You need to have the right cars on hand at the right time and not outlay too much cash flow on vehicles that don’t move or need heavy discounting to sell.
There’s a stack of paperwork to handle, too, which can be an issue for many organizations, not to mention the need to create a brand, produce proper vehicle listings, and have strategies in place for your team to follow.
If you want your venture to be around for the long term, you must keep your inventory management flowing smoothly.
Research the Market Thoroughly
For optimal inventory management, you need to know how to buy the vehicles people want and avoid those that will sit on the lot forever.
To do this, continually research the market to learn about your ideal customer type and what these people look for in cars. It also pays to get clear on vehicle popularity for colors, upgrades, trims, etc.
Keep abreast of trends, watch what sells at other dealerships and online, and pay attention to keyword analysis and online reports and forums. Get to know the prices different makes and models typically go for, too.
In today’s market, information is freely available, so consumers do their own research and have a good idea of values. You can’t pull the wool over their eyes with overpricing.
Create Quality Listings
To help cars turn over as quickly as possible, create quality sales listings that generate interest. The market data you compile will help you with this, as you’ll see which details to include in descriptions.
Keep in mind that most people read about vehicles carefully online before they even bother to go browsing in person, so your listing has to cover all the necessary data.
Include clear photographs and even videos of each vehicle to give consumers a good idea of the state of goods, both inside and out.
Show cars from every angle and note issues such as rust or scratches if applicable, so people know the actual state of different options. Transparency is key.
Have someone else proofread every advertisement for you, too, in case of typos or other errors. Plus, update listings any time the price changes or you alter the vehicle or decide to add free upgrades or extras to move the stock more quickly.
Set Some Buying Strategies for Yourself
Another way to help yourself with inventory management is to lessen the chances of buying the wrong vehicles in the first place. Setting buying strategies to follow every time you purchase can help.
For example, you might decide to only stock cars from specific brands or vintages or specialize in value family vehicles or quality secondhand sports cars.
Creating a niche for yourself helps your branding and ensures you know this particular part of the market very well. In turn, you’re better able to buy and then on-sell the best stock.
Also, set guidelines about how much you’ll spend on stock, the level of quality you’ll accept, condition-wise, and the number of vehicles you’ll buy at auction, via trade-ins, or elsewhere every month or quarter. You don’t want to overwhelm your lot and budget with too much inventory at any one time.
Consider mileage, repairs, and maintenance when buying vehicles for your dealership, too. Having a checklist in place will help you avoid getting swept up in the excitement of buying, where you can make purchasing mistakes.
Take Advantage of Tech Tools
You’ll find inventory management more straightforward if you start using additional tech tools. For example, take advantage of convenient invoice data capture services to streamline your paperwork.
Use mobile-friendly accounting software that enables you to check finances and invoices, etc., on the go.
Plus, saving data to the cloud means all your team can look at it and make updates, as needed, from anywhere, anytime.
There are also excellent dealership management systems available. They can show you your inventory levels and locations of each vehicle, the price you paid and current list price, and who has cars out for test drives.
Use these products to sync stock data with your customer relationship management system, company website, and financial programs.
Plus, this kind of tech makes reporting quick when you need to analyze information.
Everything you do to streamline processes and make data more readily accessible to you and your team should help you turnover vehicles more quickly and manage inventory more successfully.
Inventory management can be a headache if you’re not strategic and proactive about it. Follow the tips above, though, and you should find this area of business simpler.