Used Car Business Development

Used Car Stock Acquisition 101!,,,,, 

Success Will Involve Building A Used Car Stock Acquisition Business; A Separate Business That Is Aligned To Your Current Business! 

Well, as I continue to navigate the palpable panic within some of the businesses I am in discussions with, it has been interesting to continue to reflect on how the challenges surrounding reduced used car vehicle parks are being approached by the sector as a whole, and individually. 

An issue that leads me nicely on to the next of the original used car stock acquisition “One Liners” to be explored in this weeks’ article; and those originally outlined in the article below, which was written for my Used Car Business Development Blog; 

Used Car Stock Acquisition 101!,,,,,,,,,,,,,,, 

In truth, exploring all the operational issues covered in the title for this article in finite detail is impossible; every business is different, so will have to build the acquisitions business that is commensurate to their trading reality, their objectives and one that evolves year on year as the business grows, thus the objectives change. 

That said there are some basic principles that need to be understood and adhered to at all times, if the building of your used car stock acquisition business is to be successful; and rest assured, you will need this business, as the used car stock acquisitions landscape continues to evolve and become more competitive. 

The reality is that every used car business (including my own) faces the “Perfect Storm” of both vastly reduced used car vehicle parks and more competition for said used car vehicle parks. The astute amongst you will realise that carrying on doing exactly the same is the “Law Of Diminishing Returns” of used car stock acquisition; for sure you mustn’t drop the programmes and initiatives that have got you to here, (they still have their place), but you can’t rely on them (solely) to take you into the future either. 

Regrettably there are no easy answers either; what you have to build now is your business that prospects for acquisitions opportunity. Now I readily accept that “Prospecting” is the dirtiest most unpopular word in the world of used car stock acquisition, but it is paramount! It is the discipline that when delivered on successfully, is the only initiative that will provide your business with both volume and choice! 

However, it is also a business that operates in way that is at complete odds with how the sector (as a whole) operates right now, in terms of used car stock acquisition. In the main, used car stock acquisition is a business that thrives on immediacy and instant gratification; we need stock so I have bought stock – not always the right stock – the panic to fill spaces. 

This develops a certain mind-set and approach and in reality there’s only a very small minority of acquisitions professionals and businesses with the nerve, confidence and ability, that are able to operate successfully in a trading environment of delayed gratification; why? 

Well because it requires the ability to pay a short term price to be rewarded in the future and this counterintuitive. In reality, and I see and experience this mind-set challenge a lot in my discussions in many commodities acquisitions markets (not just the automotive sector), one of the main reasons why used car businesses suffer with their mind-set and approach in regard to prospecting, is this. They don’t realise that a business that prospects for continual and profitable used car stock acquisition opportunity, reaps the rewards tomorrow, not today! 

So without further ado, please find below some advice on the issues to consider when building your successful used car stock acquisitions business; 

1. Every business is in a unique position; build the used car stock acquisitions business you require. 

2. Your used car stock acquisitions programme should (at inception) be directly aligned to your used car retailing objectives. 

3. Different professionals possessing different skills are going to be required; a traditional buyer can be, but doesn’t have to be, one of them. These professionals are hitherto unknown to the sector as a whole, but will include the professionals able to build and leverage targeted data bases, leverage content, as well as social media and technology, in order to drive your acquisitions opportunities. 

4. Build the business capable of constructing the used car stock acquisition initiatives required to drive targeted used car stock acquisition opportunities to your business. 

5. Develop your understanding of your target market, geography and how your target customers operate. Once understood you can ensure you target both your target market and customers in the right way, with the right message. 

6. Understand their pain points and how to leverage them; it can be, but is not always, about price. 

7. Appreciate that this business within your business, is about to spend 95% of its time earning the right to then do what it is good at! 

8. This business must know how to target for used car stock acquisition cyclically, in line with your used car market. 

9. This business should start with ring fencing the used car vehicle park that you already have, the customers with whom you have already built trust; existing customers. 

10. Appreciate that continued used car acquisition expansion will mean building the campaigns required to take the business off your fellow franchise holders. 

11. Success will come from observing the masses and doing the opposite; by thinking outside box and laterally. 

12. The professionals running this business will not follow the herd; they know that the lion does not lie awake at night worrying about the opinions of the sheep! 

13. Be warned; sooner or later being different scares people! 

Now I appreciate that for 95% of those reading this, the operational issues above are fanciful; I experience this a lot, sadly I can’t train or work with hostages. For the remaining 5%, those curious, ambitious, capable of opening their minds and taking their strategic used car business development thinking on the journey required, I would say this. In the used car markets to come, those with used car vehicle parks of 680,000 less vehicles, (in terms of available stock), my question would be; how well set up is your business to survive? 

In truth the vast majority aren’t. It is the inconvenient truth of our times that you can have the best people and operational procedures imaginable, but if you don’t have the professionals required to secure used car stock holdings in the volumes and at the prices required to remain profitable? Well it is all going to be for nothing. 

I have observed how the used car stock acquisition landscape has evolved during the last 12-24 months and I promise the vast majority reading this, you will not be ready for how the acquisitions landscape has evolved. To the point where (as mentioned above) all those relying on the used car stock acquisition initiatives and skills of the recent past, will be left floundering. 

For these businesses, those reactionary businesses purchasing stock on a hand to mouth basis and in the moment, (the “Just In Time” market), it will be a challenge to acquire used car stock at prices (and in the volumes) that ensure your business remains profitable. 

But there are others, albeit very few, those who (like me) spent the lock downs monitoring the market and rewriting previously very successful programmes of used car stock acquisition, from the ground floor up, in order to develop the programmes and initiatives required to ensure that used car stock holdings are being secured for future markets right now. And via campaigns and initiatives that will leave the competition with years of work to catch up; even if they can find the skills required already within the four walls of their business? 

The used car stock acquisition skills now required to secure success can’t be taught via any training programme, it is too fast moving a discipline and covering too vast an array of skills-sets. So in reality successful used car stock acquisition now necessitates an environment of strategic alliances via commercial arrangements. The market value of the skills involved would also make it too financially restrictive to employ genuinely successful used car stock acquisition professionals; there are too few of us, so for the moment those days are gone. 

That said I am working with two businesses, building and delivering the used car stock acquisition programmes they require; having made a commitment to work with three at all times. So for those grasping the seriousness of their current situation and wanting to take immediate action, I will be working with another business over the next 12 months, in order to deliver the used car stock acquisition expertise and initiatives required, for that business to survive and prosper in the used car market to come. 

Should you wish to explore synergies and the potential to collaborate in this regard, please do not hesitate to contact me via LinkedIn, so we can arrange a mutually convenient time for an exploratory call.

Andrew.