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Expert Tips from eCarsTrade for New Dealership Owners
We’re sharing our tips on running successful used car dealerships! Discover expert strategies to streamline your operations and draw in more buyers.
So, you’re thinking of starting a successful used car dealership?
Chances are that you’ve already had some experience in the industry as a car salesperson, mechanic, or parts manager. If that’s the case, that’s excellent—you already have a solid foundation in understanding vehicles and sales processes.
But running a dealership shouldn’t be just about staying afloat; it should be about growing your sales and profitability steadily.
To do that, you need tried-and-true advice from experienced professionals. We’d like to lend a helping hand, so we’ve prepared a list of dealership best practices.
You’ll discover what makes a car dealership successful, learn tips for a thriving business, and find out how to be a successful car dealer.
What makes a used car dealership successful?
There are many versions of success in the industry.
For instance, a lot filled with damaged cars isn’t a good look if you’re selling to taxi fleets, but it’s a great asset to those dealing in parts.
In other words, success looks different when you’re selling to other businesses, refurbishing slightly damaged vehicles, or selling to private customers. Still, there are some common markers that used car dealerships share.
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Success markers |
How to get there |
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Profitability |
Focus on operating efficiently and set prices strategically. |
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Loyal customers |
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Reputation and trust |
Establish a strong reputation by being transparent and honest in all transactions. |
Now that you know what you should be working toward, it’s time to get into specifics of how to be a successful car dealer.
Car dealership best practices
We’ll now share some tips that you can implement at any time—it’s never too late for improvement. But there’s also a crucial step that you have to take care of before opening your doors, so we’ll cover that first.
Choosing the right spot for your dealership
According to a 2023 Progressive report, 75% of car buyers have bought vehicles in person that year. The practice of buying cars online is growing larger year after year, but if you want to cater to those visiting lots and showrooms, you have to consider the physical location of your dealership.
That said, have you ever noticed that car dealerships tend to appear in clusters, like this?
Image source: Google Maps
That’s because positioning dealerships close together creates a hub for car buyers. Also, being near busy roads makes it easier for customers to compare options and increases foot traffic.
Ideally, once you’ve set up your dealership, you’ll want to stay put for the long term, so it’s important to choose your location wisely.
It’s a good rule of thumb to stay close to other dealerships if your dealership’s business plan permits it.
However, try to avoid being too close to dealerships targeting the same niche as you to reduce direct competition and stand out in your market. We have covered the topic of choosing the right location for your dealership in a separate guide!
Creating an inviting showroom matters
If you’re in the B2C business and selling to private customers, having an inviting showroom is essential. A well-designed showroom can greatly improve the buying experience, making customers more likely to buy from you.
First impressions are crucial, so make sure your showroom is clean, bright, and welcoming. Arrange your cars neatly and highlight popular models and features.
You’re an online dealer with no physical showroom?
No problem!
You can also make your cars presentable online. In addition to a user-friendly website, you’ll have to learn how to take great photos of your cars, and that’s something that this guide can help you with.
Whether you have a showroom, a lot, or an online shop, you have to present your vehicles and your dealership in the most appealing way possible.
Hiring an effective sales team
This tip is simple: if you want a successful dealership, you have to hire the right people who can connect with customers and drive sales.
Over time, you’ll likely notice that your sales and support staff is the thing that makes a huge impact on customer satisfaction. In fact, our own customers at eCarsTrade frequently mention the staff when sharing their positive experiences with our dealership.
Besides being friendly and knowledgeable about the cars, an effective team that boosts sales also has to be skilled at solving problems and addressing customer concerns quickly.
That way, each interaction with your staff shows how reliable and efficient your dealership is, which is something that customers are bound to remember.
So, don’t forget to invest in your sales team just as much as you invest in your vehicles. Quality cars draw customers in, but a skilled and dedicated sales team keeps them coming back.
Using dealership software
If you’re aiming for success, then you have to streamline all aspects of your operations. We’re talking about inventory management, setting prices, accounting, analytics, and more.
Rather than tracking these by hand, you’ll be more efficient if you use specialized dealership management software (DMS).
Some DMS solutions, like DealerCenter, even let you manage various operations like inventory, payments, and customer relationships all within one platform.
Whether you choose an all-in-one piece of software or specific tools for different aspects of your business, one thing is sure: software saves time and increases efficiency, allowing you to focus more on sales.
eCarsTrade’s expert tips
Applying the tips we’ve seen above will give you a solid foundation for building a sustainable car dealership. But there’s still more you can do!
We’ll now tell you about three practices that we’ve noticed are common in top-performing dealerships.
► Find a car sourcing strategy that provides only high-quality vehicles
There are different places where car dealers obtain used vehicles.
While trade-ins or buying from other car traders can occasionally get you great deals, successful dealerships want a consistent, more reliable source of quality cars.
That’s why we suggest you find a sourcing strategy that minimizes risks and ensures you get the right vehicle for your needs each time.
For instance, our eCarsTrade platform lets users browse hundreds of vehicles from reputable auctions.
It lets dealers buy quality pre-owned vehicles that have been inspected by experts, ensuring that you end up with reliable cars and are fully aware of any existing damages upfront.
So, if you want to avoid stressing about the quality of cars you’re buying, partnering with a reliable sourcing service is imperative.
► Selling a car is one part of the process, but after-sales is more important than you think!
The most direct way to increase your profits is to sell as many cars as you can.
However, the act of closing a sale shouldn’t be your last step in the process. After-sales strategies are there to:
- Boost customer satisfaction
- Encourage repeat business
- Get you positive referrals
Essentially, once you’ve sold a car, you should continue engaging your customers with follow-ups, offering maintenance services, and addressing any issues promptly.
Expanding your focus beyond sales will let your customers see that you genuinely care about their satisfaction and long-term needs. This approach builds trust and loyalty, turning one-time buyers into long-term clients.
► Adjust to the market trends
The automotive industry has seen some big shifts recently: an increased interest in electric cars, buying vehicles online, and demand for hybrids, to name a few.
If you want your dealership to succeed in the years to come, you have to adjust to the market trends. For instance, only stocking petrol-fueled cars won’t get you far in a market where customers demand more eco-friendly options.
The best way to keep up with the market is by keeping an eye on industry news and listening to customer feedback. Our analysis of the European used-car market in Q1 and Q2 2024 can help you understand the current landscape, letting you tailor your inventory and strategies to meet customer needs.
When it comes to customer feedback, you could conduct surveys and encourage reviews. That way, you’ll stay responsive to market demands.
Mistakes many new car business owners make
Alright, now you know what steps to take to become a successful car dealer.
You’ll now see an overview of mistakes that new dealerships must avoid so that you know what to stay away from:
- Neglecting inventory management: Failing to keep track of your inventory can lead to inefficiencies and lost sales.
- Overstocking: Buying too many vehicles without knowing which models are in demand can result in a crowded lot with cars that are hard to sell.
- Ignoring social media: Skipping out on social media means missing out on a huge audience. Platforms like Instagram and Facebook are where many car buyers start their search.
- Poor car photos: Blurry or poorly lit photos can turn off potential buyers, so it’s wise to invest time in taking appealing car photos.
So, if you catch yourself committing one of these mistakes, take a step back and adjust your approach.
Offer the best used cars by working with eCarsTrade!
You can have a great social media presence and skilled sales reps, but quality cars will always be the most important thing the customers expect from your dealership.
If you’d like to meet the expectations of your buyers, and increase your sales in the process, you should find a consistent, reliable source of cars to offer in your dealership. That’s where eCarsTrade comes in.
Our platform was designed specifically for used car dealers. It lets you easily browse various auctions in one place, and there’s also an overview of cars sold at a fixed price.
Both options let you see detailed photos of cars, their descriptions, and even the smallest defects are clearly marked.
That way, you can stock your dealership online, knowing that you’re offering high-quality vehicles with full transparency and no surprises for you or your customers.
We also handle delivery all across the EU, so you can source cars without worrying about logistical limitations.
Drive your dealership to success today
Success in the automotive industry doesn’t happen by chance; your strategies impact it directly.
So, the sooner you start applying these tips and best practices, the sooner you’ll be running a profitable dealership.
But seeing that you’ve taken the time to learn and prepare, we have no doubts you’ll succeed in building a thriving business. Good luck!
eCarsTrade isn't just an online auction platform - we're also a valuable resource for car dealers and traders. Our blog offers expert advice on various topics, including:
