Independent auto dealers face a significant hurdle compared to their franchise counterparts. As Tom notes, franchise dealers benefit from a steady stream of high-quality trade-ins due to their brand affiliations. Independent dealers, however, rarely receive the same volume and quality of trade-ins, making it challenging to maintain a competitive inventory.
Tom highlighted an independent dealer in Washington who tackled this challenge head-on. Instead of relying on auctions, this dealer sources 60-70 cars directly from private sellers every month. This strategy ensures a steady flow of high-quality vehicles, allowing them to turn around high-margin sales faster and more profitably.
According to Tom, sourcing from private sellers is not just a necessity but a game-changer for independent dealers. This approach allows them to stock their lots with top-tier vehicles, ultimately leveling the playing field with franchise dealers. With an average vehicle cost of $30,000, the dealer in Washington has broadened their audience and driven down the average cost of inventory.
Tom's insights emphasize the success of this strategy. By buying directly from private sellers, the Washington dealer consistently drives down inventory costs and attracts a wider range of buyers. This method has proven to be highly profitable, significantly boosting their bottom line.
The Washington dealer's success story serves as a blueprint for other independent dealers. By implementing similar strategies, such as sourcing directly from private sellers, dealers can enhance their inventory quality and profitability. This approach helps them stay competitive in an industry dominated by franchise dealers.
Ready to optimize your dealership's buying and selling strategies? Contact VEHICLE ACQUISITION NETWORK for expert guidance and achieve better outcomes.