In this day an age every dealership in North America wants to sell more used cars, but if it takes you more than 60 days to sell a car, what is the point of investing all that money?Today, dealerships have a lot more tools than 10 years ago. I remember the days of shopping for used cars from AutoTrader magazine. Dealerships paid more money and were listed earlier in the magazine, which had higher exposure, thus they a had higher chance of selling.
Anytime you go to a convenience store, this magazine was stored right next to the cash register machine. Then the actual shoppers literally go out there and visit tons of dealerships to see which vehicle contains the best value. Those days are long gone since the internet has become so popular and everyone has now started to shop on websites like cars.com and autotrader.com. Actually, nothing really has changed the idea of being listed earlier in the magazine. Evidently, now being the first page of the SRP, which stands for search results page. When we shop for a car today we basically go to one these online marketplaces and sort out the vehicle we want. Let’s say we are searching for a 2012 Toyota Corolla, there will be hundreds of them listed within the certain radius.
The million dollar question is not only how to be on the first page of the search it is actually how can I get more people to click on my vehicle that I am listing. At the end of the day, you can spend thousands of dollars a month to be on the first page, but if people are not clicking your car, what is the point? We get into this second term called “VDP,” which stands for vehicle description page. This 3-word acronym is the key to sell more used cars faster. VDP happens when a shopper clicks on your particular vehicle listed in the marketplace. Dealers that turn their inventory 12+ times a year have an average of 4% and more VDPs. You can calculate this by dividing VDP by SRP. Basically, “how many people clicked on my car” divided by “how many people searched for this car” will give you this percentage.
Also, if you want to calculate your inventory turns per year you simply divide 360 by average days on the lot. So if you have 30 days average on the lot you turn your used car inventory 12 times a year, which means a healthy inventory. How are we going to reach this 4% and 12 turns per year? It is actually all connected to each other. First of all, unless you are an analytical freak and superhuman you need a program called Vauto, which is created by Dale Pollak. You will need to watch your online metrics, merchandise your cars online, get your cars lot ready in less than 72hrs and invest in priority listings in your marketplace that you advertise.
It sounds easy however, you need to be religious about this because the minute you fall of your process you will fall into problems. Using Vauto efficiently will help you make educated decisions, but don’t forget Vauto will not make the decisions for you, it is just a tool to help you make an educated decision. It will tell you the live market price so you can adjust your price accordingly to be on the first page of the marketplace. Making your used vehicles lot ready in less than 72 hrs allows you to be current with the live market price.
Your online merchandising will help you get those VDP’s you need to generate e-leads and then you will watch your online metrics. Based on that this will allow you to make adjustments. For instance, if you have a vehicle advertised for $10,000 for 45 days and you haven’t sold the car, the first thing you need to check is the SRP and VDP. If you SRPs are low, that means buyers are not searching for that particular car. You need to get rid of it at all costs. If your SRPs are high, but VDP’s are low, it means the price doesn’t reflect the current market or you haven’t merchandised this vehicle properly. Wrong photos, a non-relevant description, and missing titles can be the issue. Spending money on advertising is great, but making uneducated decisions as well as not inspecting your ads will not help you achieve anything. There are some dealers out there doing big volume numbers, but they turn their inventory 6 times a year. Imagine, if those dealers start turning their inventory 12 times a year? How would that affect their bottom line profit? How would it effect the absorption? If this information overwhelms you contact us today and will assist you to sell more cars faster.