Due to the current pandemic, customers are increasingly doing more shopping online. The current transformation to a digital retailing manner of car buying saw dealers scrambling to adapt to their current state’s requirements. Some dealers were shut down completely, others were able to sell online and some didn’t close at all. Regardless, dealers were still at the mercy of COVID-19 and most had to change processes to a more digital nature in order to continue to sell vehicles. A smooth customer experience in the buying process assisted dealers in both attracting customers and earning their business.

What most people don’t talk about, however, are the back-end of those transactions and operations. Information sources such as vehicle values went digital a while ago as did many auctions. Dealers have to acquire inventory to maintain or keep up with sales demands. And dealers are more desperate than ever to do so, according to an article in Automotive News. Vehicle turn rates are incredible with one dealer in the article saying that he sells them as fast as he can get them. The problem is that some major players have joined in making that inventory harder to acquire and vehicle prices increasing at wholesale and auctions exponentially because there are more bidders than there have ever been in the past driving up prices.

Let’s take a look at reality. Most Used Car Managers – both pre and post-COVID19 – could easily be in their office with four computer monitors monitoring different auctions in order to gain much needed front-line inventory. Even pre-COVID, Used Car Managers were battling other dealers but it wasn’t “as” competitive as it is now. Add to that, every time a Used Car Manager is the winning bidder, the dealership is paying exorbitant rates for the auction service as well as transportation costs to get the vehicle to their dealership. This, of course, drives up the cost of the vehicle and that’s not including PDI, recon and detail. Now, however, major players are entering the wholesale market, winning bids are increasing due to demand and dealers are ending up paying more for vehicles thus decreasing their gross (front and back end) profits. And, depending on where the vehicle is, could have to wait a good period of time to have it on their lot when they need it quickly.

People can only pay attention in a deep analytical way to only a couple of things at a time. A Used Car Manager who is in contention for a prime unit and in the running to acquire it could easily miss out on another one simply because they are focused on the first one. Of course, having your Used Car Manager in his office staring at four screens in order to acquire inventory could easily take away a sale. A customer who is trying to buy a vehicle – whether that be in person or online – could easily get a lowball offer for their trade-in that makes the whole deal self-destruct whereas if the Used Car Manager had been available while the deal was being desked, he may have been able to identify and place a higher value on the customer’s trade-in based on his experience.

Productivity is based on the fact that a single person can help the dealership at maximum efficiency. Just as all of the other digital retailing tools have made the purchase process more efficient for customers and the dealership, having tools at the dealership that make inventory acquisition easier, faster, less expensive and less competitive only makes the dealership not only more efficient but also more profitable. And that is the whole point.