Welcome to this week’s episode of Used Cars Weekly, the original CBT News show dedicated to bringing car dealers best practices and tips for the used car department, in-depth dealer interviews, hands-on dealership strategies, as well as vendor analysis. Today, host Jasen Rice, founder of Lotpop, tackles what he calls bucket management.
In order to execute Rice’s ‘First-30‘ strategy, car dealers and used car managers have to make sure the dealership is carrying enough inventory. The first ‘bucket’ dealers can focus on is making sure that 60-70% of inventory is within its first 30 days. The second bucket revolves around ensuring that, at maximum, 25% of your inventory is 31-60 days. Vehicles in the third bucket that are over 60 days old, should account for no more than 5% of your total inventory.
Successfully managing the second or middle bucket is as important as executing the First-30 strategy. This strategy has a trickle-down effect. Multiple departments and inventory managers have to be on the same page in order to be successful. The second bucket is a little easier to manage, but more difficult to control. There is a greater sense of urgency to sell these cars that have maybe been overlooked or are not as lucrative to consumers.
In order to prevent bleed-through between these buckets, Rice recommends setting a pace or goal with your sales staff to sell 5% more than what is in that specific bucket. This is the kicker. If car dealers are not addressing their buckets, then they will inevitably end up with more than 25% of 31-60 day inventory on their lots.
For car dealers that are currently in the middle of aging challenges, start by reducing your over 60 days bucket by at least 20%. However, it’s important to remember not to neglect your other buckets if the majority of your attention is on the oldest cars. It’s okay if this process takes a few weeks, the important thing to remember, is to stop the bleed-through of buckets.
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