How to Make Intelligent Used Vehicle Acquisition Decisions
6 dimensions of each acquisition opportunity
When it comes to acquiring used vehicle inventory you need to consider the 6 dimensions of each acquisition opportunity. And the key to making the right decision is careful consideration of all six factors.
The Six Acquisition Dimensions
Demand – Usually reflective of the region of the country and what types of buyers you have experienced in the past. Is there a heavy demand for pick-up trucks, etc.
Interest – Measured by quantifiable involvement with your website. Pay attention to your SRPs (Search Result Pages) and your VDPs (Vehicle Detail Pages). Time spent equals a higher level of interest.
Volume - Pay attention to the models that represent a significant volume of activity and sales. You never want to be out of stock on a volume model.
Days Supply – If the vehicle moves off your lot quickly, you need to have more like it. Measure how quickly it is sold and make sure you have enough to satisfy demand. If you don’t have it, someone else will make the sale.
Profitability – Always be focused on how you can profit from inventorying and selling this or that particular model. Just because it sells, does not make it automatically profitable. Consider the concepts we discussed, like Aggregate Cost to Sell, Holding costs, etc.
Availability – Clearly you must be able to acquire the needed models to satisfy the identified demand in your market. So be prepared to evaluate where these vehicles can be found and acquired. If the demand is regionally high, factors of time and cost will come into play.
All Six Dimensions can be summed up with this clear statement – “You want to acquire and stock the vehicles that people are clicking on.”
It also helps greatly to understand and define your market strategy. Is it Local, Regional or Global? And how does that impact the mix of Used Vehicles you wish to stock? These questions and more are addressed in the DealersEdge Desk Reference & Operating Guide for General Managers. Find more information below…
This new DealersEdge Resource will provide the most useful and comprehensive collection of dealership management wisdom available… It’s in an organized style that allows for Quick Reference for dealing with specific daily challenges… or as the GM’s Guidebook, it can be read and studied from start to finish.