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Aged Inventory Action Plan

Jun 07, 2016


One of the most critical factors directly related to the profitability of your dealership is the speed in which you move inventory, retail or wholesale. You must have a process, or an exit strategy. It doesnt matter how you acquired the unit, trade-in, auctions, direct from consumer, or DealersLink Marketplace. You just need to know what you are going to do with that unit after it reaches a certain day.

Assume you have an average turn of 60-days. That means you could turn over six vehicles a year from that space. If you net $2,000 per deal, then the annual opportunity cost for each space is 6 X $2,000 or $12,000. Divide that by 365, and you get $32.88 per day. So every day that a car sits over the 60-day average, youre losing $32.88 per day on a unit.

Now, how many units do you have over 60-days in your current inventory? If that space is not filled, what are you losing each day?

Don't be forced to take a loss at auction from a vehicle that ages on you. Instead sell it directly to other dealers without paying transport or auction fees. DealersLink has 7,200 dealer members possibly looking for that vehicle right now on the DealersLink Marketplace.

In the past four months we have recorded $0 in wholesale losses. Before we had DealersLink, we would average $22,000 in wholesale losses per month! - Andy Rhoads George Gee Buick GMC