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MARCH – CBT NEWS

Inventory Frontline Available or Sale-Ready — Does it Matter Today?

By Dennis McGinn

It’s a great time to be selling used cars. Dealers tell us the vehicles on their lots appreciate a point or two a day — and, when sold, they’re generating record grosses!

Breathe in this high while it lasts, though; the shadows are already getting longer:

  • Inventory supply is constricting by the minute.
  • Demand is free-wheeling faster and faster.
  • The cost of cars is skyrocketing.
  • The opportunity window is rapidly narrowing.

So, in a robust used car market like this, does it matter whether you fully recondition cars before moving them to the front line? Doesn’t it make sense to simply bypass a thorough reconditioning when you can sell every vehicle you get at a premium?

Given the market forces building against you, no dealer can afford to sell half-baked cars that usually end up costing you money to make right — or eventually force you to unwind the deal.

In a market like this one, there are no second chances.

Buyers, especially uber-detail-minded female consumers, start negotiating your asking price the second they catch a foul odor, an unattended panel ding or bumper rash in the car you’re presenting. Heaven forbid they hear brake noises or a steering pull on their test drive.

“If they didn’t take care of this,” buyers will wonder, “what else about this car are they hiding?”

Given these facts, do you see why it matters how you get your cars to the sales line?

“Frontline available” is an acceptable practice at many dealerships. It bypasses a thorough pre-presentation of mechanical, cosmetic and detail reconditioning. Instead, cars from auction and trade get a quick wash, get some quick snapshots posted online, and get moved to the sales lot — thus, “frontline available.”

Our philosophy is sale-ready reconditioning, a culture shared by some of the nation’s top retailers. Sale-ready reconditioning is the belief that, when vehicles are fully sensory- and delivery-ready when hitting the lot and Internet, they are more advantageous to your bottom line, whatever the market.

I bring this up for three reasons:

  1. Some usually well-disciplined dealers are dropping their guard during this unusual time. My concern is that good times tend to erode best practices, which are necessary when excellent efficiency is again required.
  2. A “frontline-available” philosophy keeps the GM happy because it creates a false sense of efficiency. Cars get to the lot faster, but shortcuts come with a hefty back-end cost — such as lost opportunities and often-surprising costs to bring those cars back into recon to them both pretty and safe.
  3. “Frontline-available” practices disrupt the service and reconditioning workflow, accountability and communication. The dealership’s reconditioning practice is then always a step or two — or more — off its rhythm. Having to push cars from the lot or pending sale into recon to do the right things cost opportunities no dealer can afford to drop.

I hear from dealers who share how this “transport-direct-to-frontline” practice seems to be baked into the culture like family genetics, and how new hires from other stores bring this “sacred-cow” practice with them.

These dealerships can assert a fast time to sale — that much is true. That’s not the whole story, however, as the points presented here elaborate.

An accountable, disciplined and interactive reconditioning team positions a dealership to better keep up with heavy consumer demand. You can’t do that when come-backs or sale-available cars disrupt a workflow rhythm. Those concerns slow down both workflow and efficiency.

Free-wheeling times in the car business are wonderful — enjoy the opportunity! But beware; “normal” times most always follow. Keep up best practices and disciplines now, so they’re prepared, sharp and ready to go when times become lean again. Practicing a “frontline-available” reconditioning philosophy may seem right for the times but ultimately will prove costly. Want the full story? Contact me.

About Rapid Recon

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. www.rapidrecon.com CALL US: +650-999-0497