Avoid the Major Pitfalls of Inviting Wholesalers into Your Dealership Again, Just Like the Old Days

Just because at times retail customers are disruptive and even bounce checks, would you shut down your dealership? Of course not, instead you would put controls in place to prevent future issues.

remove wholesalers from my dealershipBut for some reason, dealer principles were advised at their 20 groups and at conferences to kick wholesalers out of their dealerships. Dealers were told that wholesalers were disruptive and were bribing our used car managers. That their checks bounced and that the only way to prevent all of this was to kick them out, once and for all.

While these issues did happen at times, it was the exception. Unfortunately we tend to remember the extremes. In my experience, the wholesalers and independents I have meant over they years, while sometimes rough around the edges, are solid hard working business people. They are the core behind what makes our industry tick.

It seems crazy to me that we have excluded them from our dealership, sort of like the proverbial, throwing the baby out with the bath water.

Think about it. If you found a way to control the check issue, the back room deals and the disruption. Your dealership could save hundreds of dollars per car in auction fees and transport fees. The best part is your manager isn’t away from your dealership, missing TO’s and coaching opportunities with your sales consultants.

Is a Dealer Held Auction the Answer?

In this article you will learn many of the basics of running your own dealer auction and welcoming profitable, fee free wholesale transactions back into your dealer group. You will learn how to prevent most of the pitfalls and above all how to stay organized so you can focus on profit.

The Dealer Auction Study

My partners and I conducted a one year study of dealer run auctions and private dealer bid sales. We visited dealer auctions that have achieved 95%+ sell rates on a weekly basis, even in the dead of winter. We have seen it all from complete “Red Light AS IS” auctions to dealers that recondition every car that goes through their lane. We learned quickly the advantages of online versus physical and picked up some of the best practices along the way. The following is a small portion of that study.

Magic 10 steps? No such thing.

I am not trying to say that it as easy as just 10 steps, just like magic you can run your own dealer auction. Not at all, this is just a 10 step primer to help you understand what will be expected. I recommend that you speak with other dealers who are running their own auction or call companies like ours, who specialize in helping dealers run an accountable profitable and successful auction.

So what are the steps to starting your own dealer wholesale auction?

  1. Merchandise your wholesale cars as vigorously as your retail.
  2. Process your wholesale car using the same tools your inventory team are already using.
  3. Focus on the flaws not the cheese.
  4. Put your wholesale cars ONLINE the day they arrive.
  5. Hold an inspection Day, to avoid wholesaler just showing up at random times.
  6. Accept Certified Checks or Floor Plan only at your dealer held auction
  7. No one should know your bidders until the end, including the manager.
  8. Merchandise to your wholesalers.
  9. Staff Appropriately.
  10. Priority Cashiering.

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