Work Together

As part of his role at DealerSocket, Militscher helped Reedman-Toll set up internal trade desks and regular internal auctions with ground rules about condition and pricing. The tools within Inventory+ allow every manager to see the “buy” list at other stores.

But access to information is only one part of the process, albeit a big one. Militscher is quick to point out how critical it is to a group’s success that individual stores are not forced to accept cars they perceive as unwanted by another within the group.

“Forcing stores to trade inventory doesn’t really work,” says DealerSocket’s Militscher. “When that happens, used-car managers can sometimes slow-walk vehicles and then say, You’re the one who gave me that car. I didn’t want it.”

Instead, each manager within the group needs to use the data to convince the other that a car has a clear opportunity to perform better at his or her store than its current location. The ability to show how working as a cohesive unit provides win-win scenarios across the group is key to getting universal buy-in.

Centralized Appraisals

Gone are the days when dealers have to take a loss (or series of losses over the course of a month) to learn their initial used vehicle appraisal was flawed.

Dedicated appraisers within a central appraisal group can monitor deals across an entire group in real time and provide insight to complex situations as they develop. They can then hyper-target vehicle pricing with the entire group in mind and eliminate mistakes at the individual dealership level.

Reedman-Toll employs three dedicated appraisers with the ability to dig into the data Inventory+ generates on similar vehicles from hundreds of miles around, while simultaneously looking back to prior months for the most precise result.

“There are probably 25 to 30 different Ram pickups,” says Schoopachevich. “One might be worth $25,000, but another, where everything looks almost the same is worth $35,000.” If an appraiser doesn’t know the details or local trends, that leaves a dangerous amount of room for error.

Know YOUR Strengths

Of course, reliable data informs swaps between stores, but also prevents used-car operations from assuming that broader market trends apply in certain situations.

Schoopachevich has found success at Reedman-Toll by trusting data in a way that keeps him from riding a trend after it ceases being profitable. Data alerts, for instance, persuaded him to stock Cadillac ATS sedans in 2018, which turned out to be some of the group’s fastest turning and most profitable cars — selling, on average, in 13 days.

“This year, they disappeared,” Schoopachevich says, explaining that the ATS is no longer in the pricing sweet spot and won’t do as well.

Don’t Race to the Bottom

In today’s car-buying world, Schoopachevich believes data tools are ultimately an extension of the internet, explaining that consumers are wise to prices of competing dealerships across a given region.

“They look at Kelly Blue Book and Edmunds, too,” he says, adding that data sourced from Inventory+ can tell dealers exactly where to price in a way that will hook those internet customers. Then, instead of haggling, Schoopachevich tells customers, “It's an Internet-based dealership. Our prices are very competitive. Is that the car you want to buy today?”

Additionally, DealerSocket’s Militscher is quick to point out Inventory+ prices do not represent the bottom of the market. They produce a snapshot of market conditions paired with a store’s history.

“The bottom of the market for a vehicle might be $12,000,” he says. “But if you’re selling them in 12 days at $13,900, you don’t need to be the cheapest.”