How can you optimize dealer inventory for maximum profit?

Knowing the market through the enquiry flow of last three months . At times if ordering of inventory is done on sales of past record it may lead to wrong ordering identifying market can be done once the model wise and colour wise demand is identified in past .

When it comes to inventory mix for after sales (spare parts), one of the biggest opportunities is enabling redistribution throughout an entire network - so that any stocking gaps can be filled by nearby dealers, not only the OEM. This is only possible by establishing and executing a coherent vision across the entire network.

Pricing cars is a science that just can’t be done without some quality research first. Very important to know what your competitors have in stock and what they are offering those vehicles for retail. But let me ask a question here. If you actually knew that every time you had a specific car in stock you sell it in 21 days versus 71 days for the Market, make $3200 on the front end pulling 110% of the Average Market Price are you going to price that car at 95% or so? Using the right pricing tool that provides you that data will show you that every car stands on it’s own and should have it’s own pricing strategy.

Pricing is a cornerstone of any effective market strategy. By linking data related to inventory availability, install base and lifecycle, these can be used as inputs for the pricing strategy, enabling deeper analysis to set the right price for each part and product.

Yes infact fixing (WOS ), week of stocks level with Channel Partners and supporting them on pushing of sell out will definitely help in faster inventory rotation as well as optimizing inventory levels SKU wise or category wise .

In my experience (more than inventory turns, days of inventory, etc.) one of the most important indicators to use when managing inventory as a distributor should be Gross Margin on Inventory (GMROI) because this KPI puts in strong relationship Revenues, Cost of Goods Sold, First Margin and Inventory. The strength of this KPI is that you can put in relationship and compare company to competitors, different branches, different products, different suppliers and define which is above or below the average and which is the part of the indicator you should modify (selling and buying price or inventory). A nice by-product of this indicator is that you could reduce conflict between organisational silos such as sales, purchasing and supply chain.

It’s been a great experience for me to be able to travel all over the country to learn from some of the most successful dealer groups and single point stores that the key is to know four key things about your inventory. What cars move the fastest for you. What cars move slowest for you. What cars produce the most front end gross for you. What cars produce the lowest front end gross for you. If you know those four things then you won’t get so caught up in Market Velocity and stocking the wrong cars just because some Inventory Management tool says there’s a low market day supply.

One of the challenges to improving retail inventory management is getting buy-in from all the relevant stakeholders. A shared strategy and visibility between the OEM and dealers is mutually beneficial, because it drives satisfaction, profitability and customer loyalty across the network. But making the case to dealers to change their stocking policies to align with the OEM's global strategy requires implementing the right incentives.