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One Price Dealers: how do you set prices?

Discussion in 'Vehicle Merchandising & Inventory Software' started by Alex Snyder, Oct 9, 2018.

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  1. Alex Snyder

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    What kind of methods are one price dealers coming up with for establishing a competitive price on a car?

    Open to hearing about both new and used car methods.
     
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  3. ChrisR

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    vAuto has been helpful for both new and used.

    For new, it is an expense we are cutting, as there are not that many competitors around, and we are not allowed to build our allocations, we are given them from the OEM, and accept them, or suffer the consequences. Easy enough to cross shop half a dozen stores to make sure we stay competitive.

    On used, we can push the search radius out as far as we need to, to gather enough data to set trade/purchase values, so we are in the car right after recon & putting the cars on the front line.

    From there, it is a LOT of training the staff not to build the expectation of discounts, but rather build the value of WHY the cars are priced how they are.
     
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  4. craigh

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  5. ryan.leslie

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    I know how I'd do it Craig. ;)

    I'm hypersensitive to the "no selling in the forums rules," but I think I'd want to know what the car was going to be listed for when it sells and how many days it would be on my lot. I'd also want those predictions to be based on dealer specific modeling. There are many reasons that using averages makes you, well, average.
     
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  6. john.quinn

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    How are customers reacting to the lack of negotiation?

    My gut says the new generation (as they are moving out of Mom's basement) won't know any better... "This is the price, great, put it in my cart..."

    The dinosaurs won't trust one-price (I was around for GM's failed one-price bids...) -- the ones that use the internet to gather ammo to "beat" the salesperson. Eventually they'll have to surrender...

    (Sorry to hijack the topic -- just curious!)
     
  7. ChrisR

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    If anybody wants to see the joys of car buyers, check out /r/askcarsales on Reddit. It seems like a split of people complaining that dealers won't just go to the "best price" right away, and their counterparts complaining they can't negotiate thousands off of the no-hassle prices dealers have advertised.

    Herb Chambers is a great example of a dealer group that has been one price for YEARS. I had some of their former sales people work for me, after they moved to the vendor side. From what I gather, Wilsonville, Oregon has a bunch of 1-price stores just outside of Portland.

    it looks to be a trend the industry is moving toward. Carvana is definitely that way, in their bids to offer a smooth customer experience.

    I pitch it to those who ask about wiggle room as, who has the upper hand with negotiations? Someone who does it a few times in their lifetime, or people who do it for a living? To make it easier for you, we have looked at the market, and made sure we had the best advertised price.
     
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  8. pschnell

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    Wilsonville, Oregon checking in! Our Toyota store has been 1-price (and 1-person) since opening in 2007. Our success led to other dealers in market going to 1-price (with and without 1-person) so there are a few in the area now. We launched a new 1-price/1-person Subaru store in Wilsonville in Dec '16 as well. Used is pretty easy with so much pricing intelligence available. New is a different ballgame as you have to balance sales against allocation, as someone pointed out. Price too low and you'll blow through your inventory without enough replenishment. Price too high and obviously your floor plan kills you. So without giving away grandma's recipe, it's fair to say you'd have to look at every model/trim on at least a weekly basis and understand how price drives sell-through on your vehicles, giving front-end gross where it's necessary, taking gross where you can. The more sophisticated you can get with managing the price models - getting granular with trim, color, options, etc - the more you can find front-end gross opportunities. It's hard but it's worth it. At the end of the day, it's as much a culture thing as it is a business model.
     
  9. Alexander Lau

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  10. Alexander Lau

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  11. paulray

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    We have been a one price Ford Store for 25 years now. I love it and it makes for very happy customers and a great experience. But it takes an all in approach on selling the experience and value ( the benefits really come from long term customer relationships in sales and service and in referrals as well as long term employee loyalty in all departments.)

    I always say though, 25 years ago we performed a customer survey and 80% of our customers said they wanted a negotiation free experience. Once launched though, 100% of the customers walking in the door want to negotiate on price :)

    We primarily use Vauto or kbb for new and used. As mentioned used is pretty simple as there is so much info out there to support your price. New especially in our market where below cost pricing is the norm at least on our brand it's more about really working hard at getting the right inventory and watching trends very closely
     
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