It’s never been a tougher time to be a Motor Dealer. With inflation hitting a 30 year high, Motor Dealers need to implement the right strategies to combat the impacts or you could risk going out of business.
Here are 5 Strategies Motor Dealers Can use to combat rising inflation.
1. Streamline and Automate Daily Tasks
To combat rising inflation, your dealership needs to find faster and cheaper ways of doing business.
The first way that your dealership can combat rising inflation is by streamlining and automating daily dealership tasks. By implementing an industry specific dealer management system (DMS) like EasyCars, dealers can automate many of the daily dealership tasks like Stock Management, Advertising, Government Compliance, Accounting and Reporting. The benefit of automating tasks through a DMS is you will reduce your expenditure and gain more time to focus on growth.
Related Article: Tasks Motor Dealers MUST Automate in 2022.
2. Reduce Advertising Costs
The only way that your dealership is going to combat rising inflation is to reduce costs. One of the biggest expenses for all Motor Dealerships in 2022 is advertising. With advertising prices surging, dealers need to strategically plan what advertisers you are going to send your vehicle advertisements to and the amount you are looking to spend.
One of the biggest mistakes that many Motor Dealers make in 2022 is sending their vehicle advertisements to a variety of different advertisers without reporting on ROI. The problem with doing this is you could be losing a lot more than you realise. To reduce your total advertising spend it is important that your dealership only sends vehicle advertisements to advertisers that produce high quality leads that convert. There is no point paying hundreds if not thousands for leads that don’t convert!
Related Article: 5 Common Vehicle Advertising Mistakes Motor Dealers Make in 2022.
3. Review Your Pricing Strategy
The only way that you are going to be successful selling cars in 2022 is by having a competitive vehicle pricing strategy.
With interest rates rising just as fast as inflation, buying a car has never been tougher for many Australians. Your dealership needs to adapt your pricing strategy to a point that makes it possible for customers to buy. The last thing your dealership wants is to have vehicles sitting in stock for long periods of time. The longer your vehicle sit in stock, the more expenses you will occur.
4. Seek Alternative Vehicle Sourcing Avenues
The biggest challenge for all Motor Dealers in 2022 is sourcing high quality vehicle stock at the right price! Another massive mistake that many motor dealers are making is getting into bidding wars for vehicles. By doing this, you are limiting your potential profit margin later.
The only way that you are going to source new car stock at the most affordable price is by seeking alternative sourcing opportunities. The less people that you have to complete with, the cheaper you may source a vehicle for.
One of the best ways to gain new cars to sell is by reaching out to your past customers. As you have already built a relationship with them, they may be willing to sell a car back to you or point you in the direction of a friend or family member who may be selling. The best thing about reaching out to your past customers is you don’t have to complete with other dealerships where you risk overpaying.
Related Article: How Australian Motor Dealers Can Get More Vehicle Stock in 2022.
5. Business Reporting
Reporting will ultimately make or break your dealership. To stay on top of rising inflation, your dealership needs to be able to quickly access key dealership information and adapt based on the data.
The benefit of having a strong reporting system in place is your dealership can make quick, strategic business decisions that push your dealership further into the future. If you identify an issue, you can action it well before it becomes costly.
Rising inflation is hurting us all in very different ways. However, there are ways to combat rising inflation still achieve high profitability. The 5 strategies mentioned above are a few ways your dealership can combat rising inflation in 2022 and beyond.
We hope you enjoyed reading this article. To read more articles like this, please visit the EasyCars latest news page here.
EasyCars by Jeal is an Australian, web-based, dealer management system that automates the buying and selling of motor vehicles. Using the latest technologies, EasyCars removes frustrations experienced at the dealership and opens your doors for greater growth.
EasyCars features include Simple Stock Management, Automated Advertising, Integrated Accounting, Government Compliance, Business Reporting, Facebook Automotive Inventory Ads, Reviews Management, Dealership Websites and more.
To learn more about EasyCars Dealer Management System or to arrange a no-obligation free demo, contact us today on 1300 473 744.