If you are considering getting into the used car business, you may be wondering how profitable it really can be. There are used car businesses that seem to proliferate and thrive, while others open and close before you have a chance to go there. The difference is the strategies adopted by the business owners.
Three factors will significantly impact how successful you are. Those factors are your selling platform, your marketing, and your financing options. These three factors are more important than your inventory selection and prices. As a used car dealer, you can choose the quality of cars you sell and what the prices are to attract your target audience. The market is open to high-end used cars and cheap cars because there are plenty of consumers in each group.
The first factor that will influence your overall success is your selling platform. You can have a physical lot you sell from, which is common but limits your target audience to those within driving distance of your lot. You can also sell online, which allows you to reach a wider audience. With online sales, you can arrange the purchase online and then have the vehicle picked up or shipped to the customer. Due to the added expense of shipping a car, this service is generally offered for high-end cars.
A third option is to sell through an auto auction. Auctions are generally a combination of online and live events. The entire sale is set up and carried out by the auction company. There will be an extra cost attached to this option, as you will need to pay the auction company. However, auctions are a great way to sell several vehicles in a short period. You can utilize an auction for clearing out your inventory or use them regularly to sell cars quickly and easily.
The second factor that will directly influence your success is how you market your business. When it comes to car sales, your marketing needs to have two goals. Those goals are promoting the vehicles you have and establish name recognition. To accomplish both, you need to take a multifaceted approach to your marketing.
You’ll want to run online and offline ads, as well as sponsor local teams and events in the communities where you are located. You can take advantage of something called mobile geofencing marketing, which allows you to designate a specific area your ads will cover. Mobile geofencing marketing is a more cost-effective approach to marketing as it focuses your ads on your target audience.
The third factor that will influence your success is the financing options you can offer your customers. The more options your customers have, the more customers you will have available to you. Companies that provide their financing open themselves up to an entire market of people who are working and capable of making their payments but are unable to get a traditional auto loan due to poor credit.
There are risks involved in starting any business, and a used car business is no different. You will need to approach your business as an investment and not be afraid to spend money to increase your chances of making money. Creating a clear business plan before investing any money into it will increase your chances of success by providing you with a clear roadmap to follow.
Pursing auction sales, utilizing mobile geofencing marketing, and providing customers with a range of financing options will significantly increase your overall likelihood of success. Once you get started, you will be able to move cars quickly, and you can adjust your strategies as needed.