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5 Mistakes Dealers Make At Wholesale
Dealers are witnessing a major change in inventory acquisition as most auto auctions have migrated over to solely digital platforms. Additionally, there are a huge number of businesses offering dealers online digital services these days.
While all these platforms wouldn’t be possible if there wasn’t a demand to support them, it’s also true that the increase in online competition makes it more difficult for dealers inventory to stand out. With so many different options available, how do dealers decide which marketing platform will produce the best returns when offering aged or unwanted trades for wholesale?
While the utilization of new technology can increase the selling radius of certain units, it won’t always increase its exposure. For that reason, savvy dealers employ multiple avenues for wholesale including local auctions (both online and in-lane), as well as utilizing some of the numerous phone apps that have become popular as of recent. Yet, in spite of all these wholesale tools available, I still see dealer principles shoot themselves in the feet over and over again by limiting their wholesale resources.
Based on my over 30 years in the automotive wholesale industry, here are five things I see most dealers get wrong when choosing which platforms to employ for liquidating their wholesale inventory.
Selling Off the Back Patio to a Wholesaler Wholesale is an integral part of every new car store’s business plan and if it’s not, you’d better make it one.
Sure, removing an unwanted unit off your lot fast, getting paid before you can produce a title, and not dealing with arbitration and sounds like a home run in the auto business, doesn’t it? Unfortunately, the last time I checked, the car business is still a cost-plus business.
With all the streamlined selling processes that are available today making it faster for dealers to liquidate unwanted inventory, why would we want to limit our wholesale margins? Properly utilized, some digital apps allow sales staff to value and in some cases, already wholesale customers trades to a larger wholesale market before the ink is dry on the new deal.
Choosing Apps That Sell Features, Not Benefits This is a “Sales 101” type of mistake, but it’s one I regularly see dealers making.
Over 75% of dealer inventory acquisitions in 2020 were performed online via mobile phone apps or from a PC at the buyer’s dealership. That number has grown to over 80% and will continue to climb since the closing of most physical auction locations due to the Covid-19 Pandemic.
While some online venues may seem to provide a convenient alternative to physical auctions, sellers need to be aware of the difference in the selling policies of these newer apps. Many buyers lack confidence in many of the new apps due to selling disclosures, condition reports, and arbitration policies.
Unlike physical actions that end when the hammer comes down, several of the new apps will extend the auction after the conclusion for additional time to allow the 2nd place bidder an opportunity to continue to bid. Additionally, some of the online apps take as many as 3 days before the high bidder knows if he will actually get the vehicle as the selling dealer may need to wait for a customer’s financing approval to solidify the deal in order for the actual trade to be available for the buyer.
AMP offers multiple selling platforms, which include prime placement at physical auctions, simultaneous online selling platforms including Smart auction, as well as “Event Sales“. Our FREE “White Glove Concierge Service” manages your vehicles from start to finish, allowing your management team at the dealership to focus on their core competency of retailing more vehicles.
Leading dealers are placing emphasis on technological adaptation to help combat margin compression. Let AMP Remarketing keep you ahead of the curve and help you AMP UP your wholesale margins!
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