Jennifer Murphy Bloodworth
W
hile there are about as many different views on inventory management as there are used car managers, all dealerships face the same chal-
lenges when acquiring inventory. The supply of vehicles to buy at auction is low, and wholesale prices are up. Auction fees are inevitable. Dealers also have to get vehicles to the lot in a timely yet affordable manner, and let's not forget about evaluating trade-ins and managing reconditioning.
Four dealers from various parts of the country – from Sioux Falls, S.D., to the Washington, D.C., area – shared insight on today's market and some of their strategies for overcoming these inevitable challenges with used vehicle acquisition.
Lions in the Capital Easterns Automotive Group is comprised of six locations in and around Washington, D.C. The stores sell a combined 500 units per month and stock about 1,000 vehicles. Robert Bassam, CEO of the group, responds to the woes of buying inventory by going on the attack.
"We're lions … we want to be on top of that food chain and get ours, and we're using the online expe- rience to do that," he explained. About 85 percent of the group's inventory is acquired via online auctions, and the bulk of his online buying (about 70 percent) is from ADESA.
Buying that many cars online takes more than a few clicks a day. Bassam and two other buyers handle the online buying; they purchase from 17 different auctions east of the Mississippi River. Limiting purchasing to the eastern half of the country keeps their transport time down to about seven days to get
to the lot, and the average per-vehicle transport cost is about $250.
"Online buying is a lot more sophisticated. We back into our data," he explained. To prepare for online auctions,
they create wish lists based on their stores' historical data and review condition reports. "Then, we seek those cars within the shipping distance that we're willing to go to," he said. "[Buying online] really expands our buying ability. It ex- pands our field, the number of cars we look at. We're able to find a targeted inventory that we want, versus whatever is on
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