Trade a car for what it's worth rather than out of fear. Is making a "wholesale profit" a dirty word? When it comes to wholesaling, some dealers are trained to write it off as a loss and forget about it. How can dealers shift their mindset and dip their toe into wholesaling with confidence? Add a trade in process at your dealership with checks and balances to avoid overpaying on trades and create a new profit silo at your dealership.
Can you rationally communicate to the consumer why their vehicle is worth what it is? Once you can, they won't argue... they have two eyeballs as well.
How did dealers think about wholesale profit 40 years ago and what has changed since then?
What if there was a process to help the consumer understand where their trade in value was coming from?
New car dealers don't look at every car as an opportunity to make a profit. If it doesn't fit their retail makeup, they often assume that the vehicle is going to be a loss. That doesn't have to be the case if you have a process in place to protect your profits.
6:15 The most successful companies are not looking to break even wholesale, they recognize that there is a wholesale opportunity on every VIN.
If there is no rationality in your trade-in process, it's hard to manage your trades and avoid welding yourself into a trade. By adding a process, everyone will be able to justify the value of the trade. ie: your customer can understand, the dealer can understand and the sales person can understand. With a process, you set the dealership up to succeed by taking in trades at what they're worth without the fear of losing the deal. With a process that clearly justifies value, nobody can argue that the car isn't blue... when the car is blue.
With a process, you can make wholesale profit. Why wouldn't you consider this opportunity? The opportunity to trade a car for what it's worth rather than out of fear.
10:30 The theory of not making any money wholesale, is crazy! Why would any stakeholder be ok with not trying to make a profit in every silo they can at the dealership?
12:07 "If you ask too little, you get too much." The piranha effect is on. Carvana puts a little blood in the water every weekend, log in on Sunday and see for yourself.
13:40 You'll never see Carmax run a car off the money, that's why they convert 99% of the time. This ensures that the buyers never experience bidder fatigue.
14:20 Will you go to hell if you make a wholesale profit?
16:10 You make profit when you acquire, not when you sell. There is an opportunity to create a wholesale profit on every VIN that you acquire by adding a process at your dealership. The best opportunities are right under your nose... Do you have a service lane acquisition strategy?
18:04 The best opportunities for wholesale profits are in mileage or condition challenged car that is sitting in your service department.
19:50 Reveal the facts and you can have a profitable wholesale department at your dealership based on transparency, not ignorance.
23:00 Are you going to ask too much or too little for a car on the block? If RHAS is capable of turning mega profits year over year, so are you!
25:12 Dealerships that leverage the process without fear of making wholesale profit will come out ahead.
Next week ... How are Canadian vehicles seen in the US market and how can dealers benefit from this opportunity?
The VIN-dow Podcast is brought to you by Accu-Trade. Do you want to improve your vehicle acquisitions with transactional transparency for your customers? What about the trade-in process?
Developed by the largest independent wholesale dealer in history, Robert Hollenshead. It’s the same tool they use every day to do their job. Every lesson learned from over $20 Billion in transactions and 900 cumulative years in wholesale is built into the platform. All made easy to understand and available for anyone to use.
Robert Hollenshead is a serial entrepreneur, the World's Largest Automotive wholesaler (R. Hollenshead Auto Sales) and visionary behind disruptive automotive industry solutions such as:
Accu-Trade: www.accu-trade.com
Galves Market Data: https://www.galves.com/
MADE Logistics: https://made-logistics.com/
Headstart VMS, LLC: https://www.rhollensheadautosales.com/headstartvms/
MADE Financial: https://www.rhollensheadautosales.com/made-financial/
AutoMoto Social: https://www.automotosocial.com/
AutoMoto HR: https://www.automotohr.com/
WreckCheck.com: https://www.wreckcheck.com/
PuroClenz: https://puroclenz.com
Robert has been and continues to be a game-changing thought leader in the way vehicles are bought and sold today.