Your Acquisition Strategy: Why Having the Right Cars Isn’t Enough | vAuto
You probably have a general sense of what makes a used car “right” for your dealership’s lot. You know the cars that typically sell well (and don’t) at your dealership and possibly in your local market. But do you have a formal acquisition strategy that ensures your dealership is consistently acquiring the right cars in the right segments for your market? And does your strategy inform when you’re long or short in any segment so you don’t over-pay for vehicles you don’t really need? Read on for best practices to sharpen your acquisition strategy.
What Is an Acquisition Strategy?
An acquisition strategy defines targets for your dealership’s days supply across vehicle segments. It tells you the specific types of vehicles you need in your inventory, based on sales activity at your dealership and local market, and when you need them. A solid acquisition strategy is part of the Variable Management approach of managing your inventory to optimize the profit potential of each vehicle. Optimal outcomes start with optimal acquisitions.
Do You Really Need an Acquisition Strategy?
If your dealership seems to be doing just fine using your current method of acquiring used cars, it might be hard to see the value of developing a strategy to guide and optimize the process. But keep in mind that you might be relying on team members across your operations to acquire cars for your dealership through more channels. For example, your service department staff might be sourcing cars from the service lanes even though acquisition isn’t their area of expertise. An acquisition strategy would help them know if a vehicle is right for your dealership — and how to acquire it right based on how much your inventory needs the vehicle.
An acquisition strategy doesn’t just help those who are less experienced with acquisition. It helps improve the process for everyone involved, even inventory management experts with decades of experience. In fact, the lack of a strategy might be hurting your dealership in ways you don’t even realize. Here are three symptoms of acquiring vehicles without a strategy in place:
- Uneven inventory. If you don’t have an acquisition strategy, you’re probably stocking too many vehicles in some segments and too few in others that would sell in your market if you were aware of the opportunity.
- Desperation buying. Whenever your used car manager realizes inventory is light, they tell someone to go buy some cars without specifying the number or types of vehicles to pursue.
- Uninformed appraisal and purchasing decisions. Without an acquisition strategy, you run the risk of overpaying for vehicles too similar to ones you already have in stock — and bypassing other vehicles you don’t realize you need to round out your selection.
If your dealership is experiencing any of these symptoms, it’s time to implement an acquisition strategy. The level of guidance it provides your inventory management team is far superior to the more reactionary acquisition decision-making that occurs in the absence of a strategy.
Meet and Exceed Your Dealership’s Goals
ProfitTime® GPS from vAuto, the industry’s only Variable Management solution, makes it easy to align your acquisitions to a strategy. The software’s global acquisition dashboard lets you see which channels you’re using and how well each one is performing for you. Plus, you can run reports showing how your sales numbers compare to those across your local market for each vehicle segment. This data can help you finesse your strategy, optimize your approach to inventory management and meet — and exceed — your goals.
To learn more about how vAuto and Variable Management can help you optimize your acquisition process, request a demo today.