Recently I have had the pleasure of spending time inside of dealerships talking with salespeople and management. I always enjoy these talks because it allows me to understand what dealerships current needs are and also give me the insight to see what lies ahead.
There are two types of people in this world, those who are REACTIVE and those who PROACTIVE.
REACTIVE – The act in response to a situation, rather than creating or controlling it.
PROACTIVE – The act of creating or controlling a situation by causing something to happen rather than responding to it after it has happened.
Which one of these are you and which do you want to be? (Be Honest!)
In my experience the dealerships, the managers, and the salespeople who are PROACTIVE are the ones who get the best RESULTS! If you want to become one of the successful, keep reading to find out what problems lie ahead and what you can do to be proactive about them.
The 2 Most Dangerous Curves Ahead (for now)
As I see it as an automotive sales industry, we have two major curves coming up. Now, just because these are curves and they may be dangerous, they do not have to be. If we come up with proactive solutions to these upcoming issues, we can actually turn them into opportunity.
Every manufacture is being hit with the inability to build more cars because of the micro-chip shortage around the world. Sometimes we don’t think about how many things actually run-on micro-chips. We are noticing now, that’s for sure.
What does the lack of production mean? Simply put, in the near future, you are going to run out of new cars to sell. This is both a blessing and a curse. In the short term, as supply continues to dwindle the dealerships that are proactive about this will use the fact of limiting inventory to build value in making a sale happen now as well as use the lack of inventory to hold gross profit and make higher commissions. The salesperson who is proactive will be the one who is prepared to build the urgency to sell the vehicle now, while they still can, as well as be the person who uses supply and demand to build the value and justify the higher prices.
Earlier I said the lack of production is both a blessing and a curse. The built-in urgency the shortage creates as well as the supply and demand creating the higher prices, sounds pretty good, right? This is the blessing part.
Now, it is time to look at the curse part. You are going to run out of inventory to sell and not having cars to sell makes it pretty hard to earn a living. Whenever there is a shortage of new vehicle inventory this causes the used car market to go crazy because you have way too many people trying to buy used cars, and not enough used cars available to buy, causing the prices to go crazy.
During one of the recent visits the general manger of the dealership and I were talking about the used car market. He explained to me how recently he went (online) to his manufactures closed auction (meaning on people who have that manufactures franchise can purchase from this auction). This auction is one of the largest auctions in the country for his manufacture, typically auctioning about 300 cars a week. This particular week, the auction only had 80 vehicles for sale. Additionally, their manufacture has about 800 franchises around the country, however over 1000 people representing dealerships from this manufacture logged in to bid on these 80 cars. Needless to say, every car not only sold but they sold for way more money than they were worth.
This is only going to continue to get worse and worse as dealer run out of new cars to sell. So, the dealer who becomes more proactive about acquiring used cars will be the one who has inventory to sell for a profit.
Purchasing used cars is not only the responsibility of the dealer or the used car manager, but also the responsibility of the PROACTIVE Salesperson. Do not let the market dictate your sales success. You must take responsibility and control your own outcome, and this begins with becoming the Buyer and not the Seller. In fact, this is such an important and critical function that the PROACTIVE Salesperson MUST take on that we have an article (Become the Buyer, Instead of the Seller) talking about why this is so important to you, as well as an upcoming Live Virtual Training (Vehicle Acquisition) to show you how to do this. We would never leave you hanging.
In this every crazy world, times will continue to change, and you do not want to be left in the dark and be one of those dealerships, managers or salespeople who are trying to be reactive and catch up with the successful people. Take control, be PROACTIVE, and be the one everyone else is chasing, all the way to the bank!