Tips from Lot Pop on Used Car Merchandising

October 19, 2018 / Automotive Advertising / 0 Comments /

There are plenty of dealers that blame V-Auto for costing them vehicle gross. But while attending the Lot Pop Dealer Workshop recently, I have some interesting information to share on this subject.

“All that V-Auto did was aggregate the data on the internet – it didn’t cost the dealers money. Most dealers think V-Auto is the reason gross profit per unit has gone down, but it is really not. The internet itself has cost the dealers the money because everyone can now see what the cars are priced at. All V-Auto did was compile all the data.” – Jasen Rice

Improving Gross and Volume

Here are 5 areas to improve gross and volume as it relates to your used car inventory.

  1. Inventory Status – Monitoring your inventory sold rate by age buckets. Sixty-five percent of cars are sold in the first 30 days and less than 10 percent of the cars have ages where you want to exist. The 3 age buckets are: 1st bucket: 0–30 days, 2nd bucket: 31–45 days, 3rd bucket: 46–60 days
  2. Inventory Marketing – Pricing and visibility of the inventory to have it able to move through all 3 buckets
  3. Stocking – Why you are stocking the vehicles you stock and leveraging the proper price points and mix of same franchise units in stock
  4. Inventory ROI – Which cars generate the most leads and greatest return on investment
  5. Turnaround Time – Slow turnaround time kills gross

Vehicle Age vs. Sold Units

Here are 7 metrics that affect sold units by age. Vehicle gross problems are created a lot of times because you are selling your cars late in the cycle. This will almost always kill your gross.

  1. If you don’t have enough inventory to sell
  2. Pricing on fresh inventory has gone up each week
  3. Took too long to get pricing and descriptions on your fresh inventory
  4. Percent of missing photos has increased
  5. Are you bringing in slow-moving cars
  6. Bringing in high-dollar vehicles
  7. Fresh cars are not being displayed online (usually a feed issue)

What I love about being able to share this type of information is that all the advertising in the world cannot sell a high-priced or bad product. A major theme that Strong Automotive Merchandising sees is that dealers who have better inventory management and pricing across used cars see better conversions from their digital marketing.

About the author

John Paul Strong: For someone who spends an average of 135 days outside of the office meeting with clients, John Paul Strong remains the driving force behind his Birmingham-based advertising agency, Strong Automotive Merchandising. Strong began his career as an account executive at Martin Advertising. Learning much, but never satisfied, he convinced his father to partner with him in reopening their own advertising agency in 2004, catering exclusively to the automotive industry. The company started strong but humble. The original roster of 10 employees and eight clients has exploded today, growing to 100 full-time employees and more than 220 automotive dealers. And it hasn’t gone without notice. Along the way, Strong Automotive Merchandising has been recognized as a perennial winner in Birmingham’s Best Places to Work contest and as a Top 20 Agency among Google’s National Ad Partners. Yet, Strong still finds time to share what he’s learned along the way. As an avid writer, he has published two books in the Next Day Traffic series, along with more than 1,000 automotive-focused blog posts. He is also a member of the Texas Auto Writers Association, and his success has been recognized in the Birmingham Business Journal’s 2013 “Top 40 Under 40.” In 2018, Strong was named CEO of the Year by the BBJ. The foundation for Strong’s career began at the University of Montevallo where he earned a bachelor’s degree in communication studies and advanced public speaking. Always staying ahead of the competition, Strong later went on to study in Harvard Business School’s Executive Education Program. Amid all of his endeavors, Strong always makes time for what matters most – his family. He is a proud husband to Amy, and father to Lilly Grace, Anne Charlotte, Hudson, and Ford.


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