Aged inventory is a big issue for many auto dealers. Vehicles are depreciating assets, and if they remain on a dealer’s lot too long, they can tie up additional cash flow. Having an exit strategy for each vehicle that enters a dealership is essential. Typical places to dispose of stale inventory include auctions, Autotrader, OVE, SmartAuction, Craigslist, and Ebay, amongst other places. However, what can a dealer do if all of those options have been exhausted and their aged inventory hasn’t sold yet?
Consider taking inventory to the dealership down the road, or to the dealership the next town over. Building relationships with other dealerships in the area can be a valuable asset to any dealer looking to dispose of stale inventory. The old inventory of one dealer can be brand new inventory to another dealer.
So what can a dealer do to help build their local dealership network to dispose of aged inventory?
Get to know the neighbors
Building a network often means taking on the responsibility to be the first to reach out. Take the time to get to know other dealers in the area. They may be competitors, but they are also neighbors and peers in the industry and endure similar struggles.
Learn about their inventory preferences
Beyond just working to build a relationship, learn about the type of inventory they prefer to sell. What type of inventory do they have? What aged inventory might sell better at their dealership? Are there any inventory styles between dealerships that overlap? The aged inventory at one dealership could be a quick sell at another dealership.
Be willing to purchase aged inventory from other dealers
If other dealers in the area are willing to purchase aged inventory, be sure to return the favor. A willingness to purchase inventory from other dealers can encourage others to purchase inventory in return. Participation from all parties can make a local dealer network successful.
While it is not ideal to sell aged inventory to another dealer, leveraging a local network can allow a dealer to dispose of aged inventory, and become an inventory source for other dealers. Don’t forget, it’s an avenue to help manage cash flow, and ultimately overall profitability.