D2C Vehicle Sourcing & Floorplan Guide

As we continue to strategize with dealerships about navigating the current times, a common theme continues to arise...

...Vehicle Sourcing and Floorplanning.

Many dealers are worried they will not have enough inventory to sell.

This article will discuss the current dealership challenges and recommended solutions for dealers to directly source vehicles from consumers without the need for middlemen.

Current Challenges

New Inventory

OEM production has been shut down or delayed for the past couple of months. This could create inventory level issues for new car dealers but let's not forget that consumer demand has also gone down.

Many OEM's including Ford are ramping up production of their high-grossing and high-velocity vehicles like the Ford F-150.

The OEM's will continue to focus on branding, creating offers to drive consumer demand, and ramping up production to support consumer buying habits.

Used Inventory

Used cars are a critical component of any dealership but dealers are experiencing dwindling used car floor plans.

Many dealers depend on Auction services like Manheim to source their used vehicle inventory. Unfortunately, COX announced they have furloughed 12,500 employees many of them Manheim employees. "Close to 87% of those furloughed in the US are with Manheim, and most of those people are part-time drivers for the auctions or employees providing sale-day assistance at auctions. (source: Auto ReMarketing)"

In a recent study, dealers calculated costs upward of $1,500 to acquire a vehicle at auction. Factors include auction fees, transportation fees, and depreciation.

Even if it costs you $500 - $750, you are still dependent on the inventory selection, times to buy, and delivery schedules that could impact your floor plan.

This can create sourcing issues and dealers should look to source vehicles directly from consumers (D2C).

Recommendations & Solutions

Dealers should focus on two things:

1. Attract inventory direct to your dealership.

Dealers can source vehicles direct from consumers in a few ways. All of these campaigns can run on Facebook Ads to in-market shoppers, model line owners, or brand owners by unlocking data from IHS Markit through Oracle Data Cloud.

• BuyBack: we'll buy your vehicle even if you don't buy ours. Many consumers are looking to just sell their vehicle. With more people working from home, many unemployed, and others just looking to save money, consumers are looking to get out of their current vehicles.
• Oil Change Special: using a technique digital marketers call Tripwires, you can attract your ideal customer and vehicles into your service lane using a low dollar and irresistible offer. Target current model line owners who haven't bought/leased a car in the last 2-3 years with a $9.98 oil change coupon plus car wash. While their vehicle is on the lift, inspect the vehicle, and make an offer to put them in a new vehicle. This works great to bring in brand defectors who live in your PMA/AOR and not currently buying from you.

We recommend $9.98 as it competes against the quick lube shops and it's a unique price that can trigger your service advisors to get a used car sales manager involved.

• Trade-Up / Trade Keys: many consumers are looking to get in the latest model of the current vehicle they drive. Offering to trade keys for similar payments or less can attract many people with great condition vehicles and one-owner trades to do business with you. This helps you sell a new unit and get a CPO or used vehicle on the ground within 2-3 days after reconditioning.

2. Advertise what you have on the ground first.

You may be running low on new inventory for a particular model that has been a top seller for your dealership and market. Shift your advertising dollars to other models you DO have in stock.

Look at your SRP's and heaviest grouped models -- budget heavier and prospect on Facebook Ads for high stock vehicles and only retarget website visitors who have previously engaged with your lower stock models to stretch your advertising budget.

Double down if you have unprecedented OEM offers on these models and make sure your market knows it's a great time to buy these models from you.

PRO TIP: Include your Why Buys including At Home Test Drives and Delivery.

Run Automotive Inventory Ads (AIA) on Facebook to use your current on-the-ground new and used inventory to find people in your area currently shopping for similar vehicles to what you have to offer.

Wrap Up

Now is a great time to reevaluate your sourcing operating procedures. With Facebook Ads coupled with Oracle Data Cloud you can target and reach your ideal vehicle owners and buyers. Attract consumers directly to your dealership so you can source the right inventory and sell more vehicles along the way...plus save money and time!

**// About Pete Petersen \\**

?????????????Proud dad & husband ?? CEO/Partner dealersunited.com ?? Board member, philanthropist, speaker & mentor ?? Building #AdTech buyerbridge.io ?? Facebook Marketing Partner #FMP ??Connect @ pete3.com