Comments on: vAuto Helping Dealers Weave Straw Into Gold http://www.dalepollak.com/2008/04/12/vauto-helping-dealers-weave-straw-into-gold/ Used Car Market - A Guide for Success Fri, 30 Jul 2010 13:30:32 -0500 http://wordpress.org/?v=2.8.6 hourly 1 By: ruggles http://www.dalepollak.com/2008/04/12/vauto-helping-dealers-weave-straw-into-gold/comment-page-1/#comment-19 ruggles Thu, 01 May 2008 21:44:39 +0000 http://www.dalepollak.com/?p=41#comment-19 In my experience the biggest mistake a dealer makes in the pre-owned business has to do with inventory turn. It makes no different if your turn is within specs IF all you are doing is turning 80% of your inventory while 20% sits waiting for Mr. and Mrs. Oblivious to bail you out. You still have dead inventory that is't working for you while you stubbornly try to make the numbers on the financial statement come true. I find many dealers out there are insanely stubborn about inventory turn. They refuse to take the hit on paper they have already taken in the real world. I point out that the "hit" has already been taken and all that's happening now is everyone is in denial about the financial statement. I think some of this is based on the fact that dealers tend to hold themselves hostage with their own pay plans. They feel if they write down inventory they have already paid commission on they will have to pay commission all over again. Plus, they don't want to show a loss to their bankers. In my experience the biggest mistake a dealer makes in the pre-owned business has to do with inventory turn. It makes no different if your turn is within specs IF all you are doing is turning 80% of your inventory while 20% sits waiting for Mr. and Mrs. Oblivious to bail you out. You still have dead inventory that is’t working for you while you stubbornly try to make the numbers on the financial statement come true.

I find many dealers out there are insanely stubborn about inventory turn. They refuse to take the hit on paper they have already taken in the real world. I point out that the “hit” has already been taken and all that’s happening
now is everyone is in denial about the financial statement. I think some of this is based on the
fact that dealers tend to hold themselves hostage with their own pay plans. They feel if they
write down inventory they have already paid commission on they will have to pay commission
all over again. Plus, they don’t want to show a loss to their bankers.

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