(This article is the third of a three-part series)
In part one of this blog series, we addressed how margins are being compressed, and how Dealerslink independent members are bucking that trend by sourcing smarter. In part two, we described how Dealerslink independent dealers merchandise quicker by stocking retail-ready units and speeding up listings times.
It’s worth repeating that independent dealers sell an average of just one car a day, and make less and less on each one. There’s just less room for error than ever before. However, a majority of Dealerslink’s independent members reported that their business has improved in the past two quarters over the same period in 2017.
Consumers today can research used-car prices with the click of a mouse. The market is price-transparent, and savvy consumers know exactly how much they should pay for a vehicle. Any dealer – whether franchise or independent – must know and accept this fact.
Dealerslink’s independent dealers know that smart pricing is critical to their success. Price it too low and they’ll lose money. Price it too high and they’ll lose customers. They know they have to abandon old practices and embrace a philosophy of pricing inventory on the money in order to drive buyer interest and get more showroom traffic. Here are two ways they are doing that.
 |
| Competition View scans over 22,000 dealerships daily for the most accurate retail-pricing data on any unit in a region. |
1. Adopting market-based pricing
Many dealers still mark up every used vehicle $3,000 to $5,000 regardless of make, model and desirability in the local market. Top-performing Dealerslink franchise dealerships have abandoned this practice, and independent dealers are following suit. Now, they analyze and price each individual vehicle differently, with no standard markup.
Our independent dealers use Competition View to see and evaluate pricing for similar vehicles in their local market when they set an initial asking price. This tool allows users to see live pricing on any competing vehicle, as well as where in the local market their vehicle is priced. Competition View scans over 22,000 dealerships daily for the most accurate retail-pricing data on any unit in a region. It shows dealer website pricing as well as pricing on third-party listings.
Once they price their units competitively, that’s not the end of the story. There’s no more “set it and forge it.” Our top independent members know to use our website and live market analytics to frequently adjust asking prices so they align with buyer expectations. Which brings us to the next step.
2. Adjusting pricing based on buyer interest
Dealerslink independent dealers pay careful attention to website and market analytics in order to adjust prices accordingly to entice buyers and generate maximum profit. Part of this is done by monitoring three key metrics:
SRP/VDP activity – Respectively, this stands for Search Results Page and Vehicle Details Page. Monitoring these web page views indicates if visitors are actually clicking on your vehicles or not, and whether interest is rising or falling.
Market supply – This pricing analytic shows if a specific make and model you are offering is or isn’t already in your market. If it is, the vehicle is susceptible to more competitive pricing.
VDP engagement – When a web visitor acts on a Vehicle Details Page to view photos, fill out a form, ask for directions, use an app, etc., there’s a higher chance the vehicle will sell soon.
Throughout this series, we’ve explored ways our independent members are proverbially eating their competitors’ lunches by sourcing, merchandising and pricing vehicles smarter and better.
Put simply, top Dealerslink independent dealers outperform their peers by using our inventory tools to offer the right car at the right price in the most efficient way possible. They, and you, can optimize each stage of the used-car lifecycle from sourcing to sale in order to boost the dealership’s bottom line.
So, learn from these top independent dealers and implement strategies and tactics to improve the performance of your dealership today. If you have any questions about our dealer-to-dealer Marketplace or any of the tools mentioned in this series, call us at 844-340-2522 or email info@Dealerslink.com.
