AutoSuccess Magazine – April, 2022

From NADA: Deliver Transparency, Prep for Margin Compression

By Dennis McGinn

A personal delight for me at this year’s NADA was a discussion with digital retail pioneer Chip Perry. He dropped by the Rapid Recon booth to record an episode of our video chat series YOUR PLACE, broadcast by the Babcox-AutoSuccess network.


Chip founded Autotrader in 1997 and led the vehicle listing and merchandising publication for 16 years. Under his leadership, his team morphed the print inventory listing service into an influential digital marketing resource broadening dealers’ reach and inventory listings. Now as CEO of A2Z Sync, Chip is enabling one individual in a store to handle end-to-end transactions to help dealers deliver a better experience for their customers.


We agreed that dealers must continue to embrace transaction transparency to build trust and add value to used car inventory and sales practices. We also found common ground in dealers’ need to refocus processes and practices that may have lost their edge during the free-wheeling pandemic days. Why? To stiffen your offense to margin compression we and others believe is looming on the horizon.


“Looking ahead to 2023, the best way to combat margin compression,” Chip said, “is to have an efficient sales operation and deliver a customer experience that allows you to produce more gross profit when times get tough.”


The dealers that do will be money ahead and not scrambling on the deck reacting to the market. They’re proactively planning and building their muscle to have great consumer experiences with the more efficient sales and F&I processes when times get tough.


Combatting margin compression though begins in reconditioning, by improve vehicle salability, by providing showroom and online sales with vehicle reconditioning details that help built trust and value in your vehicles, by limiting holding cost margin erosion, and getting cars sale-ready fast so fresh vehicles hit your used inventory faster.


Lack of inventory over the last couple of years and strong used car demand should leave dealers concerned about the new dynamics when margin compression returns. Auto retail consultant Ed French of AutoProfit told me dealers may even now be first signs of renewed margin compression. A question dealers might ask now is have we forgotten how to sell value? If the “value” is price alone, the game is lost. Building value for the entire transaction is the name of the game.


This is the junction called Value and Sale.


“Customers appreciate access to better information on the cars a dealership sells, and the dealer who has a higher quality merchandising capability with the information tools that Rapid Recon touches, the  customer experience delivers more value as well,” Chip said.


“What you’ve done,” Chip told me, “is to obsess around an important detail that really matters in the transaction, the minute details of the experience. Transparency leads to trust.


“And for dealers who can build value with a front-line salesperson who conveniently manages the whole transaction, more cars and more protection products will sell because you build a better relationship with the customer,” Chip said.

Watch this episode of Your Place at

Reconditioning workflow automation from Rapid Recon is the industry standard in time-to-line inventory turn and speed-to-sale vehicle revenue enhancement for automotive retailers. Benchmarking data based on 13 million vehicles processed uniquely positions Rapid Recon to advise dealers on how to improve their store’s profitability. Used by more than 2,000 dealerships, Rapid Recon ensures the accountability of processes, property, and people. Hence, dealers know answers quickly, find assets anywhere, and sell vehicles promptly to grow dealership profitability. CALL US: +650-999-0497