In a recent blog post, Dale Pollak spoke about rapidly changing inventory sources. He offered three essential practices to make them work.
📈 Measure Channel Performance: It's not about guessing. It is vital to know exactly where, what type, and how profitable the vehicles you acquire from each channel are. Tracking individual channel performance helps to map out a strategic stocking plan that aligns with your goals.
Guessin’ leads to stressin’; so get out your measuring cup and count these cars!
🔍 Appraiser Performance Analysis: Different appraisers may have varying methods for assessing a vehicle's value, causing disparities in inventory cost. Understanding these differences allows for better-informed decisions, coaching, and sometimes reassigning responsibilities.
Everybody’s different, and that’s beautiful, but the value of a car should not be left in the eye of the beholder.
🚗 Universal Appraisal Process: Create a standardized process for assessing a vehicle's condition and value across all channels. This uniformity reduces variance and helps grab cars that align with the business strategy.
If you can’t explain what you want your appraisers to do, how do you expect them to do it?
Recent stats highlight this shift — In 2022, 66% of used cars were sourced from trade-ins, up from 63% in 2019, and street purchases nearly tripled from 4.8% to 13.5%. Even giants like CarMax now acquire 94% of vehicles directly from customers.
These practices can give dealers an edge in a market that requires proficiency across multiple sourcing channels. Measuring and managing are the keys to thriving in today's complex sourcing environment.