Higher Profits and
Lower Risks for Your
Pre-owned Inventory
Doug Hadden
Higher Profits and Lower Risks for your
Your photo
here
Pre-owned inventory
ADESA Auctions
Carmel, In
949-751-9961
[email protected]
@mdhadden
#NADA2016
2
The views and opinions presented in this educational program and any
accompanying handout material are those of the speakers, and do not
necessarily represent the views or opinions of NADA. The speakers are not
NADA representatives, and their presence on the program is not a NADA
endorsement or sponsorship of the speaker or the speaker’s company,
product, or services.
Nothing that is presented during this educational program is intended as
legal advice, and this program may not address all federal, state, or local
regulatory or other legal issues raised by the subject matter it addresses. The
purpose of the program is to help dealers improve the effectiveness of their
business practices. The information presented is also not intended to urge or
suggest that dealers adopt any specific practices or policies for their
dealerships, nor is it intended to encourage concerted action among
competitors or any other action on the part of dealers that would in any
manner fix or stabilize the price or any element of the price of any good or
service.
#NADA2016
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AGENDA
• Unit Day Supply
• Dollar Day Supply
• Inventory Management Tools
• Get The Best Cars From Your Captive Finance Co
#NADA2016
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Unit Day Supply
Unit Day Supply =
(current # in inventory)/(# retailed in last 90 days/3)x30
Example:
75 Vehicles in stock today
135 Vehicles retailed in the past 90 days
45 Average per month (135 divided by 3)
75/45=1.67 x 30 = 50.10
50 Day Supply of vehicles
#NADA2016
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Dollar Day Supply
Dollar Day Supply =
(total cost of inventory) / (total cost of units retailed 3 months /3) x 30
Example:
Current Inventory Dollars $1,350,000
$1,687,500 cost of units retailed in the past 90 days
Divide by 3, which equals $562,500
$1,350,000/$562,500=12.4x30=72
72 Dollar Day Supply of vehicles
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What Does It All Mean?
Unit Day supply = 50
Dollar Day Supply = 72
SB 30
SB 30
Total inventory cost divided total units in stock equals
average Vehicle cost
$1,350,000/75 = $18,000 average cost of units in stock
Total cost of retailed units for last 90 days divided by units
sold in 90 days equals average cost of vehicle sold
$1,687,500/135=$12,500 average cost of vehicle sold
#NADA2016
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What Does It All Mean?
Dealer stocks $18,000 vehicles
Dealer sells $12,500 vehicles
$18,000
- $12,500
= $5,500
X 75 (units in stock)
= $412,500
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What Does It All Mean?
Dealer stocks 75 vehicles
Dealer sells 45 vehicles
75x$18,000 = $1,350,000
45x$12,500 = $562,500
= $787,500
#NADA2016
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Inventory Management Tools
• vAuto
• AAX (aka Inventory+, American Auto Exchange)
• First Look
• Red Bumper
#NADA2016
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Inventory Management Tools
• Buy List – Hot Sheet – Need list….
• One Click All Auctions
• Groups – In Group Moves
#NADA2016
Private Label – Captive Finance Remarketing
Pre/Turn In
Vehicle in lessee’s
possession.
Dealer can preview
upcoming maturities
Sale to
Grounding
Dealer
After vehicle turn in,
grounding dealer is
offered those vehicles
at a residual and / or
market-based price
Sale to
Franchise
Network
Open Sale
Vehicles offered to the
national franchise
network. Online auction
with start price and
reserve
Vehicles offered to all
buyers online (while
remaining for sale to
the network).
Online auction with
start price and reserve
Closed Buyer Sale visibility via Private Label Site
Open Buyer Sale Visibility
#NADA2016
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12
Private Label – Captive Finance Remarketing
• One Owner Low Mileage Lease Returns
• CPO
• First Chance at Other Brands
• Don’t Pass on Good Cars
• Lower Fees
• Less Risk
• More Profit
#NADA2016
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Questions
#NADA2016
Higher Profits and
Lower Risks for Your
Pre-owned Inventory
Doug Hadden
Your photo
here
Higher Profits and Lower Risks for your
Please visit the NADA Pavilion
in the Expo Hall for information
on accessing electronic versions
of this presentation and the
accompanying handout
materials, and to order the
workshop video recording.
Pre-owned inventory
ADESA Auctions
Carmel, In
949-751-9961
[email protected]
@mdhadden
#NADA2016