The importance of focus

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Kevin MacDonald

Wholesale Columnist

I have spent my share of time working on both sides of the automotive aisle – retail and wholesale.

Kevin MacDonald
Kevin MacDonald

The retail focus is the core of any dealership. Retail feeds service and parts and requires a different level of customer service than wholesale. That said, new car franchises generally depend on a profitable used-car department to help boost bottom lines and offset the razor-thin margins we see in new-car retail.

Working in both departments has their respective rewards. They also require different mindsets if you are going to execute either one successfully.

Your focus changes drastically between retail and wholesale and it can be difficult to straddle both worlds. You either work with the public every day or spend virtually all your time working business to business.

Despite the importance placed on both departments, I have seen some stores shift to a model of employing floor managers instead of specific new and used-car sales general managers.

This trend worries me, as I firmly believe every store needs a dedicated used-car manager who is financially accountable for his department’s success.

I recently had a discussion with the general manager of a Toyota franchise about the difficulties in finding properly priced inventories. It’s nothing new. Everyone wants the perfect cars for their lot so they can make a decent profit, feed their service department, etc.

Remember, there is no used-car factory so sourcing proper inventory is a full-time job. Expecting an average used-car manager to be a connected buyer with great sources is naive considering the confines of their 60-hour work week.

I buy virtually all of my cars via text or web portal. For me, the likes of eBlock, TradeRev, TradeHelper and others are staples.

Imagine trying to sell a car sight unseen to a consumer?

While it may show promise as the likes of Genesis and Zoom.ca hit the market, it is still a lot like trying to sell a pair of shoes without having the customer try them on first.

I can often account for excess wear in a simple text conversation because it is with another wholesale expert; consumers tend to be unforgiving when it comes to condition.

When it comes to remarketing, I need to use every channel at my disposal. It can take an hour to load one car on multiple sites. You need a dedicated body doing this day to day.

In order to find the right wholesale profit you need to juggle every platform deemed fit for that type of car.

We can burn our units rather quickly if we overexpose them to the market, while some in retail let them languish on autoTRADER.ca without adjusting price.

Anyone who expects a strong used-car department without having someone passionate about its retail presence is just fooling themselves. And to do it right, it has to be a full-time pursuit.

Kevin MacDonald has over 15 years experience in direct wholesale remarketing throughout North America. He can be reached at smokindeal@rogers.com