As an independent dealer, inventory acquisition is always front of mind.
Throughout the past year, auctions have had an increase in demand and fewer vehicles on their run sheets as used vehicle supply has dwindled.
The dearth of inventory and increasing competition for available inventory necessitates a change in approach.
Buying cars off the street should be where you shift a significant portion of your focus.
In 2020, Carvana again increased the number of vehicles it purchased from consumers, from 104,000 units in 2019 to 204,000 in 2020. That’s a 95 percent year-over-year increase.
While the company has had larger percentage increases in past years, that number shows it has continued to lean into a private purchase vehicle acquisition strategy.
Part of Carvana’s success is that it makes selling a car simple for its customers.
Purchasing inventory from consumers, whether or not they plan to purchase another vehicle, provides limitless opportunities.
So how can you emphasize private party purchases to source inventory?
Online sources: There are a wealth of places you can go online to find people looking to sell their car privately. Craigslist, Facebook Marketplace and Facebook groups for private party sellers are all places you should keep in mind.
For Facebook groups with potential sellers, look for local groups that have auto owners or truck groups. You can customize your notifications so you only see alerts when people post certain keywords, or you can go in and search for the specific inventory you’re looking for.
Leverage your CRM: Though it might not be the first place you’d think to go, your CRM can hold a treasure trove of potential vehicles.
While they might not be actively looking to sell, you can use your CRM to reach out to customers who in the past have purchased vehicles that are not in high demand. Seek them out and offer a trade-in.
You can also use your CRM to advertise and increase your customers’ awareness.
Create an email campaign that notifies your customer base you are looking to purchase used vehicles. You can use segmented populations and personalize the messages.
That option allows you to increase your advertising without having to spend extra.
Incentivize trade-ins: Offering an incentive to customers considering a trade-in or outright sale of their vehicle can help create buzz for your dealership.
There are several incentives you could offer, from discounts to referral bonuses to free services.
If you use your Facebook page to promote the incentives, you can tie it back to the first tip mentioned here.
Buzz and word-of-mouth promotion is sometimes the hardest to acquire, but it’s one of the most effective.
Expand your search parameters: As you craft your searches for FSBO (for sale by owner) inventory, keep in mind that increasing the distance you’re willing to look is another good way to have more options for inventory acquisition.
Whether you expand your boundary by a few miles or by a couple of hours’ trip, if you can find the right vehicles, it will be worth it.
Train your staff: Once you have consumers in the door, it’s important that you have staff who are specifically skilled when it comes to engaging car owners considering whether they’ll sell their vehicle.
You might want someone from an area other than sales to work in that role.
You should also ensure your team is familiar and comfortable with check printing and signing. Speed and efficiency are critical for that part of the process and have a cascading effect on the sale process for your customer.
As you explore these ideas, what should always be at the forefront is how to relate the value of doing business with you to the customer you’re looking to buy from.
Make sure you’re crafting a premium customer experience when people come in to sell their vehicle or when they reach out in response to your email campaigns or other tactics.
Many individuals choose to sell privately because it seems like less hassle and more money.
But you have the advantage.
You can assist the seller with titling, tax and positive or negative equity. And bringing a car to a dealership to sell it is significantly more secure than going to someone’s home or meeting in a parking lot to exchange cash and a title.
Offer fair and transparent pricing.
Using these techniques will help you actually close the purchase once you’ve connected with a potential seller.