My experience is with volume lines. I have never worked for a Lexus, Mercedes or BMW store.
92% of customers spend, on average, 19 hours doing research. In that research, price is a prime consideration. Much of those price comparisons take place on the display advertising pages. Edmonds is just one site that provides invoice prices. It has become a commodity business. When I was at a store, I shopped my competition every month. If they actually gave me a price, they shot me net net. There are no mysteries out there. It isn't a matter of if you are going to price your cars, but when.
Customers may not engage me through my website or third party providers. They have done their research and just come into a dealership and end up with a floor salesperson. This is usually where there is a complete disconnect. He hasn't been qualified and isn't likely to tell you that he has received bids from the competition or has seen prices on a website. A wall comes up and the desk manager and salesperson agree that he is a flake.
Customers that enter a site and see MSRP are likely to bounce. I believe that they are much more likely to engage me if they have seen a price. "We are talking about a HUGE investment vs the $10 product" True, so we have to figure out how to make money when the front end gross is limited. At my last two stores, we had a higher average gross profit (front and back) than the floor. We sold more new than used.
Considering your three largest variable expenses, how do we structure all of this to end up with a stronger bottom line? I believe that is the most important question for successful dealerships.
Looking at dealerships placement on AutoTrader and Cars.com, I have seen more dealerships cutting back. It is a great time to be in the game. Much of the competition is asleep.
