Efficiency is Critical to Dealership Success in 2023

It does not take a Professor of Economics to see the challenging operating environment for all dealerships in 2023. We all are seeing unfavorable market conditions in our dealerships as we are desking new and used car deals daily. Reduced used car values combined with higher interest rates and lower demand due to inflation is creating a death cross for car dealers. It produces large amounts of negative trade equity coupled with higher payments from current interest rates at the same time consumers are reeling from inflation and recession fears.

We as car dealers are as tough as they come, but now we must be smarter and more efficient operators than ever. Every facet of our operations must be streamlined. Cost control is the best way to preserve our profit margins in 2023. Here are ways to improve operational efficiency at your store in 2023:

  1. Make every employee count: Our teams must be lean and mean. We need each employee to produce more whether it be a desk managers, salesmen, marketing, operations, or fixed ops staff. We are forced to pay more for salaries and benefits to retain quality staff to keep pace with inflation. Every team member must be highly productive. Gone are the days of excess cashflow to keep marginal labor on payrolls.
  2. Reduce flooring cost: Now that interest rates are higher, we are forced to manage our inventory more efficiently. We must increase velocity and reduce vehicle age by investing in vehicles that sell fast in our local markets. We must identify and wholesale units that lock up valuable inventory capital. We must accelerate recon times to get vehicles lot ready in fewer days. We must leverage the Dealerslink Marketplace for flex inventory for non-core inventory from other dealers to reduce total vehicle count.
  3. Reduce vendor expense: The prices that vendors charge for service has become outrageous! We see price gouging every day at Dealerslink when quoting similar services often for more than double that what we charge. We consolidate vendors and conquest vendors with overprices services.
  4. Reduce wholesale transaction cost: $600 – $900 auction fees. Are you kidding me!?! That’s a 3rd of a car deal! You can pay for a monthly Dealerslink Marketplace Membership and have unlimited buying and selling with NO FEES.


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