How to stock your lot, a conversation with Nick Miller

April 9, 2010


moberlyYou posted an email conversation that you had with Chris Irwin the other day in regards to him stocking/selling Honda’s in his market.  His question and your response had me up half the night pondering my personal stocking situation and would like your input.  As we have discussed before we are in a fairly rural area and in a domestic heavy market.  The only other franchise dealer in our town is a GM store that unless they won arbitration, is slated for closure in October.  I see this as a BIG opportunity for us.

My question is this…I have stayed away from stocking certain vehicles with higher MDS (say 99+) for obvious reasons and our turn/aging are all the better for it.  But I am having a terribly tough time increasing our inventory above 45 units.  Should I entertain stocking some of the late model “common” 100+ MDS vehicles to grow my inventory (GM or otherwise)?  I know that with more units my SRP/VDPs increase in kind but I am fearful of the aging problem I have worked so hard to reverse.  Or is the answer more time with the buy list scouring auction runs and keep digging for more of the vehicles I know I need and continue to shy away from the run of the mill program car?

On a side note, my father Dean Miller and Gregg Jaecques (New SM) are in Chicago for the stocking seminar with John Griffin.

Thanks for your time! – Nick


It really is hard for me to recommend to any dealer to consciously acquire vehicles that have high market days supply like 90-100 MDS plus.  My sense is that you’re going to end up pricing them very aggressively in order to make them go away.  Rather, I would prefer to have you keep the pressure up on developing and perfecting your acquisition skills and talents. 

Having dispensed this advice, however, I should acknowledge that smart guys like Bill Pearson might disagree.  Bill has some kind of a turbo-charged marketing engine that allows him to sell cars quickly with high market day’s supplies.  I think, however, it’s fair to assume that he knows what he’s doing, and he’s perfectly content to blow them out at no profit and perhaps even for a loss because he knows that he’s likely to make a respectable back end.  This is one of those tricks that I wouldn’t advise that just anyone try at home.  You have to be really on top of your game in every respect and most importantly, be prepared to lose money once in a while.  Being prepared to lose money once in a while is something that most dealers avoid at any cost, and this is what gives a big roller like Bill an edge.  When he rolls a 7, it’s perfectly well calculated.  I really don’t know too many other guys that are that good.   – Dale 


What Bill has done and is doing in Peoria is nothing short of amazing.  I am not scared of losing money, I feel that if it doesn’t happen once in a while you aren’t trying hard enough and pushing the envelope enough.  I feel that I knew the response to my question before I had even asked it.  Looks like I need to step up my proxy actions.  Right now I am acquiring approximately 10% of the vehicles I bid on at auction.  I can pretty much guarantee that if I work up 40 proxy bids for a sale day I will end up with 4 cars at the end of the day.  Short math I am going to need to put actively bid on about 100 vehicles a week to stock the kind of inventory I will need to grow to what I think we are capable of in the short term.  Hmmmm….where is my Digital Debbie when I need her?

Thanks for your insight as always…   – Nick