Wholesale Vehicle Pricing Strategies for Today's World
It goes without saying that pricing is one of the most important factors in determining a dealer's success in both wholesale and retail. Match the market and you'll likely be able to move your inventory quickly and maximize your cash flow, start with your pricing too high and you'll scare away potential buyers leading to reduced profit and lot rot.
We picked the brain of ACV's resident pricing expert Mario Mancini on how dealers can be successful pricing their vehicles in today's remarketing landscape.
What changes have you noticed regarding general trends across the marketplace? Do those same trends translate to buying and selling on ACV?
Market sold pricing seems to be down 10-18% from 30 days ago. Buyers are out there, they are just being safe protecting their cash and investing it only in vehicles that can be turned quickly. This means that cheaper vehicles have not seen their pricing affected as much, while late-model vehicles with plentiful supply are hard to move as demand has dropped significantly. Buyers also need to be coaxed in even more than the market is down in order to gain traction.
A $15,000 car 30 days ago is likely $13-13,500 now and needs to be floored more in the $12,000-$12,800 range to get excitement on the auction.
What advice would you give to new dealers who have recently shifted their business to ACV as opposed to a physical auction?
Picture it that you have a lane at the physical auction with every single buyer at the auction that day that is interested in your type of car. The only way to turn them off is by not pricing it to market. ACV delivers all of the buyers into one lane and cars that are priced to market will get 60-200 views, whereas a car that's priced to market at a physical auction might get 10-30 views at most. On the buyer side, buyers need to take advantage of ACV's condition report, review it before you bid, you'll know exactly what you're getting and avoid the surprises that come with buying at auction.
Where do you see the pricing trend going once dealerships are able to open back up to full capacity?
Prices will likely skyrocket once things are up to full capacity, but sticking to at or below market floors will always work to the seller's advantage in any market.
How frequently should sellers be re-assessing their pricing strategy?
Sellers should be re-assessing their pricing strategy daily during these times. The certainty of taking X today is better than the unknown "Y" in these volatile times. Cash flow is king right now, focus on the inventory you can move quickly and price it to move quickly.
Are there any helpful tips to keep in mind during this time?
Get the buyers emotional by bidding, instead of giving them leverage by keeping them on the sidelines. Floors priced to last month's market will keep them from participating in your auction.
ACV has thousands of buyers nationwide ready to jump on inventory that is priced right. Take advantage of the nation's largest online dealer to dealer wholesale marketplace and start listing vehicles today.
Buyers want to feel not only valued but seen. They want you to know who you are, what they need, and that you’re ready to help them through the process quickly and efficiently. With that kind of treatment, they are more likely to go back to your dealership again and again....Read More
Traditionally, dealerships have been perceived as reticent to fully embrace digitized operations. To some degree, this is valid, as digital technology has not fully replaced most of the car buying and sourcing experience for dealerships...Read More