How to Maximize Your Profits: Advice from an Acquisition Specialist
How much profit a dealership can or does make on a vehicle depends mostly on the methods used for acquisition, whether it be through auction, trade, or private individual. This is according to Brandon Horth, Vehicle Acquisition Manager for the Wheaton Chevrolet and Honda dealerships in Alberta, CA, and VAN customer. Horth is also a former general sales manager for a Nissan dealership in Canada.
Acquiring/Selling 101
In a recent VAN University webinar, Brandon shares his process and experience with VAN Performance Manager Emily Gehrke. Since Horth began with VAN a little over a year ago, he has consistently made 30-35 successful acquisitions a month from private individuals. And at a profit margin of $2,600-$3,000 per month front and back gross per vehicle, Horth speaks with knowledge.
“That’s not including the fixed gross we get when we’re reconditioning these vehicles," he adds.
In the webinar, Horth explains that anything bought from auction, "...number one, it’s going to be the highest aged inventory and two, you’re going to make the lowest amount of money on it."
Asked why, Brandon says, "because it’s what I call a shelf unit--anybody can buy it and you’re paying a lot more for it.”
The key is follow-up
"Religious follow-up is necessary," proclaims Horth. He uses the VAN platform to find individual sellers. “As soon as the the automated message goes out, the first message from the customer 90 percent of the time is ‘what’s your offer?’”
To be efficient, Horth uses an automated template that includes the message, ‘Let me put together an offer.’ He asks about specific body damage: dings, windshields, tires, interior rips, burns and tears, to ensure his offer “won’t drastically change.”
“Once I generate a number, I give a range - a low and a high,” Horth says. He then sets an appointment for the customer to come into the dealership, and clarifies that they are not looking “to trade you out.”
Horth added that it’s more efficient to line up appointments at the dealership. He also explains to the customer that the process should only take 20 minutes.
Transparency pays off
Once the appointment is set, Horth then informs all the managers of specifics: when the appointment is to arrive, the bid, etc.
“They’re prepared and ready to buy," he says. "I prepare them like we’re buying this vehicle today.”
Horth follows up afterwards, whether the customer sells or not, with a specific automatic message. And if the seller doesn’t sell, Horth works hard to re-engage with facts and figures, as he explains in the video.
About VAN University
The videos in this post are excerpts from one of our VAN University webinars, which are conducted each month in the Learning Center, a no-cost no-obligation learning program for dealers and dealership personnel seeking excellence in being more profitable with their Buy Centers and used car businesses.
> Sign up today in the VAN Learning Center for more great information about sourcing vehicles from individuals and to be included in future webinars.