A Velocity Dealer Turns Up The Heat—And Keeps It Hot
You might say the month-in-month-out focus of automotive retailing is both a blessing and a curse.
It’s a blessing when you’ve had a bad month. As the next month starts, the pain of a poor prior month tends to fade quickly.
Conversely, the month-to-month mindset is a curse when a really good month cascades into complacency when the calendar turns a page.
The challenge for dealers, of course, is to rise above the ups and downs of the business and stay focused on the long game of continuous performance improvement, irrespective of past failures or successes.
You may remember Ricart mentioned here recently for earning distinction as the No. 2 used vehicle retailer in the country. At the time, he pledged to make No. 1 for next year’s rankings.
Ricart and his team appear to be well on their way. They had a record-setting August with more than 770 used vehicle sales (more than double their monthly average a year ago), and he’s pushing his team to keep their collective feet on the accelerator.
In the note Ricart shared with his team, he gave them props for a record-setting month, and then focused their attention on next steps to finish the year, and start 2015 with an even higher degree of profitability and success. Here are some excerpts from the note, which I thought were worthy to share with the broader community of Velocity dealers:
“Welcome to September. A strong finish to August helped us deliver a record 771 retail used units. We took a hit on gross to get the units, but it helped move quite a few aged units, which is always good.
Switching gears and thinking about the 4th quarter, the key to the success of this department is all about Inventory and Velocity. We are past those summer months that huge volume of customers help hide some of the “dice rolls”, if you will. Time to tighten up the buying. Unless you are 100% sure we can make 6%-8% profit on day 21: Do not buy the car. Critical. I see too much repricing to target at day 14-21 that we are only asking a few hundred in markup. That has to stop now. We should be able to steal cars. The market is dropping. Don’t get tricked into over-paying….
Ricart’s note goes on to discuss game plans for specific, problematic vehicles, and ways to lower the group’s used vehicle inventory investment (e.g., “buy selective and smart”).
The note struck me as a great example of the kind of dealer-level involvement in used vehicle operations that is critical for success in today’s market. In addition, it’s another reminder that tomorrow’s used vehicle profitability and sales is rooted in the astute exercise of Velocity fundamentals today.
Congrats, Rick and team. Keep up the outstanding work!