Inventory management systems should be about helping you maximize profit and minimize risk, car by car and store by store. That’s it. But the problem is that a goal like that can seem confusing. There are so many trendy, overly complex methods being promoted and sold, so many “better and new ways,” that it’s hard to know what’s right.

For managers looking to change inventory management software , it turns a relatively straightforward choice into a scary proposition. What’s more, today’s systems have grown to the point where they do almost everything, from pricing to transportation. Heck, there might even be a service out there that does your laundry. Choose the wrong software and you may lose tens of thousands of dollars and the shirt right off your back!

The truth of the matter is that it’s not that complicated. Amidst all the talk, the basics remain: 

• Understand how a vehicle might perform at your dealership.
• Optimize your price to the market.
• Perfect your merchandising presence.

As a result, you will create a profitable and happy relationship with your customers. Use a system that gives you a simple and effective approach, without having to spend hours studying data, charts and tables. Fine-tune your pricing based on customer demand and use a mobile system that’s fast, efficient, intuitive and easy to operate.  The rest is window dressing intended to confuse managers into thinking that there’s a magic potion they can use to make everything wonderful, in a “set it and forget it” sort of way.

No Such Thing as Unicorns or Magic Inventory Potions

Magic potions are expensive. And here’s the rub: there’s no such thing. But there is data, information and technology used to arm a sales team so that they approach each car sale the right way. The “magic” is in the people armed with innovative technology that accomplishes three things:   

• Tracks and identifies high performing (turn and gross) units at a glance. 
• Compares dealership performance to market performance.
• Allows management to pinpoint comparative vehicles in their market quickly and efficiently.

There are many different pricing strategies for sale by vendors in the automotive space. The correct approach for your store depends on a myriad of factors, including brand, sales process, location, turn rate, competition and more. Be sure to choose the right program for your dealership’s needs, and not the trendy pick that claims to deliver quick results.

Remember, it’s about developing a winning strategy where your process works hand-in-hand with the technology.  Applying the right tools with solid pricing and sales fundamentals will increase your profits and grow your business over the long-term.

Keith Platt is Senior Manager of Dealertrack Inventory Solutions, which includes Inventory+, an advanced inventory management tool that delivers 360 degree data insight and analytics, as well as mobile capabilities, to dealers.