In house inventory management

[Robert B.]

I have been toying with the idea of doing all of our inventory management in-house. Looking at the numbers I can keep the cost the same if not a bit cheaper doing it this way. I feel like our 3rd party vendor isn't doing anything we can't do. Example's:

1) They poll our DMS - Dealer.com can do this.
2) Inventory management - again already paying Dealer.com
3) Pre-Owned vehicle window stickers - Software costs $140 + paper and can be done in-house
4) Inventory images - easily done in-house
5) Image overlays? - Already created
6) 3rd party retailer exports? - again Dealer.com

We are currently hovering at 45% image capture rate for pre-owned inventory, and don't even ask me about our new inventory. I've heard what the excuses are from others, but I also know a large part of the problem is that we have to wait for the photographer to fit us into their schedule. I personally feel if we do it in-house everything can be managed much more efficiently, and most importantly we'll be able to get our actual image capture rates above 90% as we'll work according to our own schedule and not our vendors.

Our used car manager is willing to consider the idea, but also tells me he knows of no dealerships that do it in-house - and maybe for good reason.

Ok, I'll bite. What is that good reason?

Am I completely missing something here? Why are we paying a vendor to do something that we can do better and quicker?

I would love to hear from those of you that have experience with this as I concede I have very limited experience myself.

 

[Rick Buffkin]

Have you spoken to your third party rep taking the pics and expressed your concerns?? How often are they coming by the dealership? Once a week??? Maybe they should come by twice a week. Do you only want pics of the used cars after they've gone through detail?? How long does it take for a vehicle to be front line ready once it comes into inventory?? Chances are the rep was told to only take pics of the vehicles that have been completely detailed and front line ready. Or, you could have a crappy rep. A very simple thing you can do, to increase your pic % is to shoot 4 or 5 pics of each vehicle before it goes through entire used car process. Just give the vehicle a quick wash and vac. From that point I would look at how the pics look and then maybe take it a step further. I'm not sure what vendor your using, but most of the major ones have an app you can put on a phone that will upload the pics as soon as they're taken. I would try that first before trying to do the entire process. It's not a simple task. I've been there. Consistency is what your looking for. From my experience, to do photos in house it's hard to keep consistency and have good looking photos.

 

[Robert B.]

Rick,

The rep comes by twice, maybe 3 times a week. A large problem for us is that service takes a long time to get vehicles out of the shop. The service issue is not one I can fix as it seems to be a logistical issue. My thinking was to do exactly as you state however. Do a quick wash and vacuum on vehicles before they go to service in order to get a couple of pics online quickly. This is not something the rep can do as they'd essentially have to be at our beck and call; whereas someone in-house would be. Dealer.com does indeed have an app allowing one to auto upload pics. I believe our vendor has a dedicated camera you have to purchase in order to do this.

Was consistency the primary problem you ran into? For me cost seems to be a big detractor of these 3rd party vendors. We can have their rep at our store to our hearts content, but the cost grows linearly to the amount of volume they are doing, as they charge per vehicle plus any add-ons. Doing it in-house, assuming there is consistency, wouldn't have that problem. We'd be paying our in-house person the same if he did 5 or 50 vehicles in a week. The vendor on the other hand would almost cost us 3 times as much.

You do make a good point though. Consistence and finding the right person is important. If I am off base on anything though please let me know.

 

[joe.pistell]

...We'd be paying our in-house person the same if he did 5 or 50 vehicles in a week. The vendor on the other hand would almost cost us 3 times as much.

Let's say your photo guy $600 p/wk.
--5 pics p/week = $120.00 cost per car
--50 pics p/week = $12.00 cost per car

Uncle Joe Rule #11
"In business, when ever you solve a problem, you create another. Success is your new problem smaller than the old problem."

 

[joe.pistell]

A few questions:

• What are you paying now for pics?
• How many units do you sell a month?
• What is your boss's top concern, cost or speed or quality?

Do a projection. If you're paying $15 per car now, how much annual income is that? Can your savings pay for one person? How many hours per week is your 3rd photo service on your lot now? 20 hours? 10 hours? Study their process, and estimate how many cars your in-house guy/gal can shoot. (be careful here, it'll be your job to hit that number!

Also, consider the cost of babysitting. A $600 p/wk worker can get real lazy. You have to set process, quality standards and volume goals. Then you have to train. Then you have to monitor & motivate the worker.

HTH
Joe

 

[craigh]

Uncle Joe Rule #11

One of these days I'm going to index all your rules

Uncle Joe Rule # 87: "Dealers are like snow flakes, no 2 are the same". Because of that alone, ALL dealers should do videos!

Uncle Joe Rule #87: "Great Design can't happen without Great Questions"

Uncle Joe Rule #41: "Just because it's a good idea, doesn't mean it'll work".

Uncle Joe Rule #118: "Just because it's a good idea, doesn't mean it'll work".

 

[joe.pistell]

Ha! I've always wanted to do that Craig. hmmm

 

[ewalraven]

If I wasn't on mobile is I'd go more in-depth but it's harder than most people think (not impossible though).

I agree with: 1, 2, 3, 5, and 6. Not easily anyway.

Can I ask your roll at the dealership?

You need buy-in from most likely the general, new, and used car managers. You need a good understanding and relationship with the service and detail guys.

Pick your battles. If it's really as bad as you say it is-- can you talk to them and improve it? If the dealership has been with them a long time you don't want to burn a good relationship. Is there another vendor around willing to do it better?

Most of the time the answer (especially in this business) is to find a vendor that you are willing to deal with.

Once again, not easy.

 

[Robert B.]

I'm the Business Development Manger. I guess I've been underwhelmed with this particular vendors performance, though ironically enough I'm told they are a bit more expensive than others. The impression I'm getting is the majority of dealers aren't doing it in-house as it can be too much of a hassle. It's worth it to them to spend a bit more and not have to worry about the micromanagement necessary to ensure it gets done correctly by whomever they hire to do it in-house. Maybe what I'm looking for is a mix of both sources so that one may complement the other.

 

[ewalraven]

Keep in mind that they are also providing the window stickers as well. So factor that in with the time and cost. I'd shop for other vendors and see what they are doing and charging. See if you can come up with an agreement with them before just jumping ship without any experience. I've got a feeling I know who you are with -- and if I'm right, there are better solutions out there based on where exactly you are located.