There are too many things to consider when determining whether or not to price your new car inventory. What if a dealer has 500-1000 new cars in stock?
I was a dealer with an inventory well above that number. I agree, pricing each car individually is tough with today's technology options. However there are pricing rules in a number of inventory management solutions out there that makes things a bit easier. I used to do this for a new car auction solution and it took a few hours of work each month. I do see things improving in this area soon
Also, ArtMorris has a point when he says putting a price on a vehicle "would violate our manufacturer's rules". Honda, for example, does not let you advertise a price below invoice. Therefore, if you advertise a Honda vehicle at invoice on your website and your potential customer sees this and then contacts your competitor for their "ePrice", you are screwed. Plain and simple.
Along with having that 1,000+ new car inventory
most of the manufacturers (Honda being one of them) I worked with did not want you to advertise below invoice.
Right now, most car dealers show MSRP for the exact reasons you and I both stated. Being the first dealer in the market to do different is rewarding. I know; I did it. It scared the crap out of our GM's and sales managers, but when I could talk them into it we had customers in the showroom within hours of the changes publishing.
I also disagree with the fact that dealers should "aggressively" price each and every new car.
If you do go down the new car pricing route you will have to get aggressive at some point. How many sticker deals are still happening on Corolla's, Civic's, Focus' and the other volume models? If you know and track your PVR per model/trim then you have the intelligence to price your cars accordingly. The real trick is retraining your staff to operate in the modern world.
Profit is not a bad word. When you aggressively price every new vehicle online, you risk the chance of "short-selling" a vehicle that might have brought close to MSRP. I think that negotiation is a part of the business that will never die. After having said all of this, there are times when a dealership should price all of their new inventory and times when they should not.
Profit makes the world go 'round. There are ways to maintain and/or increase profit and those ways are being taught to us whether we like it or not. Phrases like "risk of 'short-selling'" and "negotiation is a part of the business that will never die" translates to "I'm afraid of change." I don't think you're really saying that Matt, but I do think you should step outside the dealership for some new perspective. I need to find a way to help show the new perspective I have after 20+ years in the dealership vs. 9 months out of it. It really is amazing. I just haven't formulated the words yet.
You bring up a subject that needs to be talked about more often when you write: There is a huge power struggle going on right now between "car guys" and "Internet guys". "Car guys" want to make money. They want to maximize gross on every car deal. Most of the time they are thinking about profit. A lot of times, this "car guy" mentality is not too sympathetic to the average Joe. The Internet poses a huge threat because it gets harder and harder to succeed in the area that they were taught was most important. Gross. "Internet guys" may still be profit minded, but they go about it in an entirely different way. In my opinion, they often sacrifice gross to be accommodating. I think that they tend to be unit minded instead of gross minded. Typically, the "car guy" lives for the negotiation and wants the objection from the customer and the "Internet guy" wants to avoid any confrontation and for the transaction to go as smoothly as possible. The Internet guy needs the car guy and vice versa. Over time, these two personalities/philosophies will do more than coexist. There is a lot that they can learn from one another.
Maybe there is a middle ground that will be determined by the car dealer. I doubt it though. I hate to say that, and I hate to say that because it is knock against my family (who owns and operates the dealer group I come from). I'm getting an education on the vendor-side of the aisle right now and I'm seeing how the OEM's are viewing the future. They're more consumer-minded than the typical dealer. I also look at history and know that in a capitalist society the consumer determines the market.
There is definitely a struggle between the brick sales floor and the digital sales floor that is undeniable. I see it as the roots of change. It is coming; all outlooks point toward it.
A really basic timeline on technology changes toward pricing:
Internet >> wider invoice and trade data for consumers >> used car pricing & stocking (vAuto, First Look, AAX, etc) >> incentives feeds >> price quote tools (ResponseLogix) >> ________?
