As more and more franchise dealerships step into the used-car sector, independent used-car dealers are finding themselves with greater competition than ever before. Not only are they competing with the dozens of other independent dealerships within a five mile radius, but also the colossal franchise dealerships with a greater inventory selection and a seemingless endless stream of cash flow. With 40 million used cars sold in 2015, both franchise and independent dealers are fighting for a piece of the pre-owned industry’s profit. By examining DealerSocket’s Independent Dealership Action Report, we can determine the greatest challenges independent, used-car dealers encountered last year and more importantly, how to solve those challenges.
When asked what was the most important problem plaguing their dealerships in the year 2015, independent dealers responded that their top two greatest challenges included:
1. Inventory Acquisition (31%)
2. Capital to Finance Inventory (21%)
Coincidentally, return on investment and revenue growth ranked as the number one goal of independent dealers polled in the report. With inventory and capital proving to be the biggest challenges along with ROI and revenue growth serving as the top priority, it is evident that, “There is a direct correlation between independent dealers’ top challenge — inventory acquisition — and their No. 1 initiative — ROI/revenue growth,” the report notes. “In a circular fashion, acquiring more inventory will increase revenue and cash capital to finance more cars.”
The DealerSocket report concludes with suggestions for increasing both inventory and capital as well as advice for growing dealership revenue.
INCREASING INVENTORY & CAPITAL
- Expanding inventory search online and attracting individual sellers
- Understanding car buyers and purchasing inventory based on their needs
- Utilizing tools like a lender portal to offer more financing options to your customers
GROWING DEALERSHIP REVENUE
- Leveraging technology, like CRM, that is cost-effective and yields high returns
- Improving selling skills, like phone handling, to raise closing rates by source
- Decreasing spend of traditional advertising
- Creating a digital shopping experience that drives consumer engagement
Looking for a technological tool to reduce your dealership's pain points and increase your dealership's competitiveness? MyDealerOnline offers a unique solution for independent, used-car dealers. With our technology, you can place auction inventory on your website or create your own custom website pre-loaded with auction inventory. Better yet, our services come with a low monthly subscription so you do not even have to finance this inventory to display on your website. Add auction inventory to your online listings, increase your digital presence and provide a greater selection of vehicles with MyDealerOnline's technology.