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How to Lose Money in the Car Business | Zymbyo, Sales & Marketing Blog

Written by Andrew Owen Feldcamp | Feb 28, 2022 8:33:39 PM

I don’t want to disparage a business, but in my neighbourhood, we have two grocery stores. One is the, well… it’s the nice one. You can tell the moment you go in. Everything is perfect. The produce is clean, organized, and piled perfectly. The meat counter is perfect, clean, and well laid out. The other grocery store is a dump. One of those discount chains, I think. The floors are dirty. The produce is all over the place. The meat is wrapped and looks like it was tossed into a bin from fifteen feet away. The thing is, I’m pretty sure that both stores get their produce and meat from the same place, one just presents it a whole lot better. Used car dealerships are just like that.

As you drive down the road passing all those new and used car dealerships, one look can tell you how well they run their businesses. Especially used cars. If you don’t have your new car dealership inventory organized and straight, I can’t help you. But if you have a used car department or store, that is a different animal. You have so many different types of vehicles. Different makes and models. Different years and mileages. Cars. Trucks. Vans and SUVs. Not only that but they’re used. That means they’re likely imperfect. If you don’t manage the lot and inventory display properly, you’re going to look just like that dumpy grocery store, and just like that dumpy grocery store, you will have to charge a lot less for your product or not sell anything at all.

The difference between a parking lot and a used car lot, is that one is organized and the other isn’t.

How you park your inventory is the key element of inventory display. Obvious, maybe, you would think. Do you know the difference between the look of a parking lot at the mall, and a used car lot? The parking lot at the mall has a bunch of random vehicles parked in a row, not in a straight line, and likely has a few gaps where spots are open. If that describes your used car lot, then you’re not doing a very good job. Your used car lot should be as organized and segmented as possible. Every line should be perfectly straight. Every hole filled. No gaps. When possible, vehicle types should be organized together. Cars, trucks, vans, etc. That’s the difference between a parking lot, and a used car lot. One is organized and the other isn’t.

Another thing, just like the dumpy grocery store, one bruised apple makes the whole pile questionable. I don’t know about you, but if I’m looking at a pile of fruit and one or two look like crap, I’m questioning the whole batch. Are you buying that piece of meat right next to the one with the fly on it? Used cars are exactly the same. You can buy an amazing used car, recondition it and put it up for sale for a nice profit, but if you park it next to a crappy vehicle the customer is going to wonder what the heck kind of garbage cars you sell.

Perfection is a difficult objective, but common sense is not.

Perfection is a difficult objective, but common sense is not. Used car lots should be parked in straight lines, organized and with no gaps or holes in the line. Used cars should be clean, always. Obvious dents, scratches, rips, burns and tears should be fixed, or the unit should be dumped at wholesale. Nice clean cars organized well. Doesn’t sound that tough, does it?

If you’re a General Manager or a Dealer Principal take a walk out on the used car lot and ask yourself those simple questions. Is the lot straight and organized? Are the vehicles properly cleaned and reconditioned before display? If not, maybe it’s time for a change in management. If you’re a Used Car Manager, maybe take a walk out on the lot and ask the same questions. Preferably before the GM, or the Dealer watch this video. Oh, and if you’re that dumpy grocery store, sorry, I’m not shopping there unless you’re the last one open and I’m desperate. Good luck and good selling.

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