There is not a week that goes by that our organization does not hear about a dealership wanting to dump their lot services company and take it in house. Like anything else, if it becomes a core part of your business then it needs to be staffed with company resources and not vendors. Internet sales is a core part of every dealership and if it isn’t a core part of your dealership most definitely CALL US!
I hear dealerships all the time beating up lot service companies over the price per car, but in reality you are paying a huge premium for someone else to inventory your cars. The premium comes in the way of quality and opportunity costs.
- Quality = staging cars for photos with a great backdrop, accurate options, telling a story about the car (writing descriptions), lots of photos to describe the car (20+)
- Opportunity = inventory the cars as soon as they are available, increase exposure with complete pictures/options/descriptions as soon as possible, reduce interest by flipping iron faster (bankers like that), update window stickers at any time.
Look, internet sales has grown leaps and bounds in the last 10 years and shows no sign of slowing. We have franchise car dealerships that attribute 30% or more of their sales to the internet and independents at 90%.
Ten years ago there was no such thing at an “Internet Department” and today most dealerships have one (or at least a guy or gal). So why not a lot services guy, gal, or department. The day has come!
If you keep up with the industry news you will have noticed that major lot service companies have either acquired, partnered, or built a Do-It-Yourself (DIY) product recently. The writing is on the wall. Lot services are decreasing and DIY is increasing!
Here is the skinny…
Weather Problem: If the weather is bad and the service vendor can’t come out to inventory and photograph your cars then they are not online to sell. Further more, once they try to catch up, the vendor is not behind at just your store but ALL stores. That can be 10+ stores. How many days out does that put your inventory getting online?
Weather Solution: The moment that the weather clears you have IN-HOUSE staff get the photos complete. Alternatively, most dealerships have a delivery room or area – get some photos done in there.
More Photos Problem: Lot service business is a low margin/high volume business, so to find a way to make another buck they charge for additional photos. Why? They are already standing at the car. On the Internet photos sell cars. You need 20+ photos of every car which is cost prohibitive from a vendor standpoint.
More Photos Answer: When you become a DIY store, the photo count is immaterial. Take as many as you want. How are you going to sell to that consumer 500 miles away with 6 photos? You aren’t, but 20+ photos sure will get them to pick up the phone to call.
Photo Quality Problem: First, when you sign up with a lot service vendor they tell you they take great photos and in fact some may tell you they have a “photo quality analyst” on staff to review all photos. What a bunch of bunk! Remember this is a low margin/high volume business. Speed is important to them and speed never equals quality. Secondly, do they stage your car in front of the dealership or with an appealing backdrop? Probably not and here is why: takes too much time and insurance premiums are high for vendors to drive cars around the lot.
Photo Quality Answer: DIY stores stage every car they photograph, make sure there is no glare, ensure interior photos are not dark, and your staff is already insured to drive cars around the lot so no increase in insurance premiums.
Couple Days a Week Problem: Most lost service vendors can’t come to your dealership more than a couple days a week. That is a problem in today’s Internet age. You see, every day that your car is not online is another day with less exposure. You are paying thousands of dollars a month on automotive shopping sites (AutoTrader, Cars.com, etc), but the cars sit for days before going online. Are you really getting the value for those advertising dollars spent? Not to mention the cars were not online for the weekend (cardinal sin in the business)!
Couple Days a Week Answer: The car comes out of service and is immediately photographed and described. And in a system like AutoRevo, you click “SAVE” and instantly it is on your website.
So Decision Makers listen up. Effectively marketing your inventory dramatically increases the value of your dollars spent in online advertising. Do you think online merchants pay outside vendors to photo their inventory and post online? No! They have a whole internal process that they own for pushing inventory to online sales channels. I know a guy who is a full-time photographer with Fossil (watch maker). His whole job is photographing products for catalogues and their website.
Finally, here is the old equation: we pay about $1,600 per month to have our inventory loaded, photographed, stickered, and sent out. I couldn’t hire someone for that price. Here is the real equation:
Services: $1,600
Interest (10 cars, avg 30k each, 45 days on lot): $2,500
AutoTrader missed sale: $3,000
Cars.com missed sale: $3,000
eBay Motors missed sale: $3,000
Missing sticker(s) for a Sunday shopper: $3,000
Website shopper who didn’t come in because they couldn’t find the car: $3,000
Having your inventory online asap and completely described….Priceless
Request a Demo Today!
For my Dad’s Christmas present all of my family was to chip in and buy him a pair of the old school Ray-Ban Aviator glasses (classic 1980’s model). Who better to shop for this gift than may cosmopolitan brother.
