Are You Making Mistakes When Pricing Your Inventory?
Article Highlights:
- Dealership pricing doesn't always match customer expectations.
- "Use market data, not your gut instinct, to price your inventory."
A dealership’s pricing method rarely coincides with a customer’s desired price point. The main reason: dealerships don’t base their prices on market data!
Dealers often purchase a vehicle or accept a trade for retail and simply add a specific amount, usually around $3,000, to the cost of the vehicle to determine the asking price.
Customers, on the other hand, prefer to shop around online and determine the lowest price for their desired vehicle using dealership websites and guide books. Then, they come into your dealership expecting to pay that price.
Occasionally this method produces a successful transaction. However, what results more often is an irritated customer and an unsold vehicle collecting dust on your used lot.
How to Resolve Conflicting Information with your Customers
The solution… communication! Let your customers know that the market, not you or your dealership, determines the price of vehicles in today’s competitive selling environment.
Using a market pricing tool will allow you to justify the asking price on vehicles using local retail data and market-specific insights.
How to Communicate your Prices are Based on Market Data
When a customer asks about price, don’t be afraid to show them the market data you have on the vehicle. You might even consider presenting your customers with a list of similar vehicles for sale in your area.
Customers don’t mind talking price; they just prefer to do it with an educated, professional, and courteous salesperson who can provide them with the information necessary to make an informed decision.
Conclusion
If you price your vehicles competitively and present the value-added services your dealership offers, it will build trust with your customers and go a long way to increase sales and customer loyalty.
Bottom line: use the market, not your gut instinct, to price your inventory.
Share this Article
- Facebook
- Twitter
- LinkedIn
- Email
Reynolds Consulting Services
Mark joined Reynolds Consulting Services in 2012 and consulted on CRM processes and Retail Sales Operations.
Related Articles:
True Story: Dream Car Disaster
When I was ready to purchase my first vehicle, I was full of excitement. I thought nothing could bring me down and the only challenge…
Yields in Your Fields: Farm Lessons for Your Used Car Lot
As you reflect on the past year, consider these areas that farmers evaluate when choosing seeds – areas that also apply when sourcing your lot…
Navigating the New Era of Car Buying
In today's fast-paced automotive market, the journey from online browsing to in-store transactions has become increasingly complex.
Leading The Way: 3 Tips to Help Your Team Find Quality Prospects
Customers have unlimited options in today’s market, so it’s important your team makes the most of every interaction. Failure to do so jeopardizes long-term customer…