Old Inventory Is Like Bleeding To Death, Part 2

Following up with yesterday's blog post (see part 1) on dealing effectively with old inventory, today's post will continue the ideas of how to turn the bleeding through flooring expenses into profits instead.

Yesterday's ideas to turn around the flooring problem are in the order I would do them in. So, I will continue from the last entry of Get Real Bold and Order Two or Three New Units. I recommend that this is not a menu to pick and choose from, but a successful strategy that is proven, so doing all of them and doing them in the order presented will produce the best results.
  • Be a leader, but don't be a loner: Get a team! The more people you have helping you, the better. Develop a team by contacting a lot of other dealers selling the same brand you are and developing relationships with them to help each other sell trucks. If you think that being a leader is doing it all yourself, you're wrong. Get a team helping you. Point number four yesterday was to trade some old units you have for some old units another dealer has. I hope you had a few people you could call and work with, but now is the time to expand that to as many as you can. This will take some time and is not an immediate fix, but we must get started on accepting the concept and beginning the process.
  • Start Some Offsite Displays Now. Get some of your trucks off the lot and on display somewhere where a number of people see them at one time. Try to target places where you know contractors and other service providers go to get parts and supplies. I recommend that you do this in the morning and be out of there by eleven am or noon. Be there at least a half hour before they open and be ready to show off your product, hand out materials, collect names. I recommend some small giveaways, offering coffee, etc. If there is a coffee vendor there, don't bring coffee, but hand out tickets and buy your coffee from the vendor. Lumber stores, hardware stores, The Home Depot, Lowe's, 84 Lumber, Meek's, are some of the kind of places I am referring to. County fairs can be an opportunity. Contractor organization events is a great place. Find some places that you can create some traffic to your product by taking advantage of traffic already coming to that location. This should be an ongoing part of your marketing plan in good times and better times.
  • Market to your existing database of clients and prospects. Hopefully, you have been gathering email addresses of your clients and prospects. If you have, I recommend beginning an HTML email marketing campaign immediately. This is great because you can include photos, graphics, links and lots of color. If you haven't been gathering email addresses, begin today and then put together a flyer highlighting a few pieces on your lot. I recommend only highlighting a few and not trying to put too much on there. Remember that white space is just as important and filling it up because it is the white space that directs your attention to the content, photo, or graphic. Begin sending out one a week. If you have a large database, you might want to stagger the mailings. It is also recommended to target your market whenever possible, so if you know what people buy, send a flyer about that product to them. You can work with service to provide a special deal on oil changes or something like this to have other things to offer that will provide additional value to the mailer or email.
  • Market to a new database of prospects. If you haven't already, buy a database to begin expanding your market area. I recommend that you think of drawing a circle around your city that is about a 100 mile radius and then include that space as your new market area. Buy a list for that area. You can go to Sales Genie or any number of other companies. Go to Google and type, Sales Lists for a good start. We have experience with Sales Genie. Get signed up and get access to a list and get to marketing your products. Do this as an ongoing marketing effort and don't ever stop! Keep expanding your market with a reasonable marketing budget. It doesn't happen for nothing. When I was doing commercial trucks at dealerships, I had a 10,000 name database that we were continually working.
  • Swap bodies. If you have some past year models on your lot, you might want to consider swapping some bodies to get an improved marketing opportunity. For example, if you have an 11' service body on a 450/550 type product that has not sold, swap that body off (on to the ground if necessary) and put a plain flatbed on it. This will allow you to drop the price by about $5-6,000 without dropping your profit. It allows you the flexibility to 'cheap sell' it off your lot or through your marketing flyers or emails. You can put the service body on a fresh unit. You can do the same with a contractor body and drop the price a similar amount. Dumps are a lot of work to swap, so I always leave them as an act of desperation. This works like magic when you have a contractor or service body on a 350 dually and then go to the plain flatbed. You can then use that piece as a 'loss leader' to draw attention dramatically to all of your inventory. It is not very effective to do this with single rear wheel units that normally have service bodies on them, but if you have a 2500 with a service body and it is old, you can put a pickup bed back on it. Make sure and have your body company do that so they can re-certify it. In those situations, that can make all the difference. I don't like swapping bodies and I am slow to do it; however, it can be a huge help to moving old pieces off your lot. Please remember to do this: make sure all of the expenses for removing the body and reinstalling the body on both units is charged against the one you are selling so that you don't increase the cost of the inventory or record a false gross.
  • Create an event at your dealership. Create an event. It can be a thank you event for your customers where you have a BBQ and treat them to lunch, a large vendor display with lots of flags and banners and eye-catching displays. It could be a ride and drive event. It could be almost anything, and the goal is to bring people to your store to see your products.
  • Seek the help of some key clients. Network marketing. Contact some of your key clients and let them know that you really need to move some inventory. Give them several copies of a list of the items you need to move and ask them to help you move them. If they like you and doing business with you, they will be eager to help you. You will be amazed how well this can work. They might not be interested in receiving anything from you for helping, but I would recommend that you give them some free service or something as a thank you. A couple of free oil changes would be a great thank you gift.
  • Get the retail department involved. They could help you if you wanted to let them and teach them.
  • Merchandising and pricing. Besides the lot displays, take the units that you want to move the most and price them on the windshield. I recommend that you go with the lowest numbers that you can and that you use payments instead of price when you can, such as $397 per month. If the sale price is over $30,000, for sure use payments only. If it is under $25,000 pricing can be effective. Make sure and make good use of the what I call the 995 strategy. Always go the the best 995 number to can reach. So if you took a sale price after incentives and it came out to be $24,446, I recommend you either find a way to go to $23,995 or move it up to $24,995. People pay attention to the numbers on the left and not the numbers on the right. It is real. At $24,446, you are throwing away $549 for no good reason. Take advantage of it. This also works for payments, so if you came up with a payment of $418 per month, find a way to get to $395, or you can move it up and it won't make a great deal of difference to the buyer. Make sure and use what might be considered an average down payment when calculating payments. If the average down is about $5,000 and you figure your payment based on $10,000 down, you are not going to be as effective as you could be. People need to be able to relate to what you are offering. Don't let the pricing numbers on the windshield get faded. Continue to make the units look as fresh as possible.
  • Prospecting. Get your people out prospecting and take the units you want to move with you. This is the time to target your prospecting to the clients that you think would be buyers for the kind of unit you want to move. Go visit them and bring your unit with you. Try to show it to them wherever you go. This should be something you are doing all the time anyway. Get out there and see them, especially when they are not coming in to see you.

There are more things you can do, but I will let you think of them yourself. Hopefully, you have a plan here from all these ideas to never have really old inventory ever again. All of these points are important and all together, they are a strategy. You can do it. It requires focus. Let's get back to profitability by stopping the bleeding. You will be a hero.

1 comment:

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