I'd say Ed that you hit the nail on the head. Forgive me as I am new here, but the funny thing is, after reading Velocity, I thought to myself "Geez, that's what I did with my silly little used car lot that I had for 6 years".
Guess what, I made a fortune there.
We've had big meetings about this where I work, and it's really a complete change in mindset. We have 3 stores in New Jersey; Dodge/Chrysler/Jeep/Ram, Hyundai and Nissan. And there are people who are all for this new way of working and some who haven't seen the light yet (But are starting to like the results) so they are coming around.
Can you make $8,000 front end on a ex-rental class of vehicle? Yup, and ya know what, I've come close to it before myself. But it's not the norm, and it's not what is going to work most of the time.
Most 2010 Camrys out there are LEs with, I dunno, 20-30k miles on em? They are what the British call "White Goods" or generic units. Just like our Nissan store with 1-2 year old Altima 2.5Ss. I have a bunch, Hackensack has a bunch, so does Ramsey, Meadowlands, Rockland, Hawthorne, 46, all the guys in NY City, etc etc. Sometimes you will get lucky on them, but the majority of your customers are looking online. If there's one in Philadelphia that's $1,000 less than us, I don't need to lose sleep over it. If the stores within 10 miles of me are $1-2k less than me on otherwise comparable cars, then I am going to end up with a pile of aged units. There's just not that many fools out there anymore.
We revamped our online pricing of these things and have gotten really aggressive with them, and guess what? We're all of a sudden selling 2.5S Altimas! You know, a car with a market days supply comparable to snow shovels in Miami.
But even with a high market days supply, there's still a lot of these getting sold and delivered.
Recently we had an Immaculate 2004 F150 Lightning with 27k miles on it come in. I actually talked to our Dodge store and we raised the online price $2,000. We still sold it quickly, because that's a specialty car and that's a car that you can get greedy with early on and try and take a shot with. There's just NONE of them out there and this was probably the nicest.
But in my experience, a car like a 2010 Camry LE fresh from Enterprise with nicked up bumpers isn't a car to take a shot with. Maybe a really low mile 4Runner Limited with Navi in Black? Well yeah sure, those aren't all over the place. But there's no way I would stay greedy for 30 days.
When I had my car lot I initially was undercapitalized, so I had to work as a "Velocity" dealer. I simply bought cars that I knew I could auction off on eBay at $1 with no reserve for a profit. Back 10 years ago this was stuff like BMW 528i Sports, Boxsters, XJ6 Vanden Plas, M3s, Land Cruisers, Saabs, Subaru foresters, etc. And I didn't look at Gross per unit, I looked at how much money I could make each month. I had $X to work with and I had to figure out how to make that $X + $asmuchashumanlypossible every month.
The problem is, if you aren't competitive out of the box, a huge percentage of the buyers out there aren't even clicking on your ads online. Why not look at the VDPs of your 30day and under inventory? I buy a fuel additive for my antique cars on eBay, about 3 people sell it. So I search for it and one seller is always the lowest. So I click on his auction and buy from him; do you think that your buyers are doing anything differently?
Not trying to be confrontational, but the business has changed and we can either adapt or we can die. And I ain't dead yet.