Are You Taking All the Steps to Maximizing Your Gross Margins?

Even with the 2008 recession behind us, it is still tough for used car dealers to improve their gross margins. With a decreased supply and numerous consumer financing options gnawing at the market, margins have continuously gotten smaller and smaller. Wholesale unit costs are getting increasingly higher, while retail pricing has remained relatively static, thus squeezing margins thin. While manufacturers have increased production, it may take years for the effect to trickle down to independent dealers. So how do you improve gross despite all these challenges?

Improving gross is a process, it’s not just a simple sales transaction or a ding in the cash register. Gross starts the moment a prospective customer searches your inventory online and continues to accumulate until the moment a contract is signed. We have created a flowchart below to outline the process and things to consider in order to maximize your profit.

Gross margin flowchart(1)

(c) QCEP Consulting


Little things, such as promptly greeting a prospective customer the moment they walk into your dealership, can make a huge difference on maximizing your gross profits. Other things, such as the tidiness of your dealership, is also important. Is there clutter around the desks? Is there food lying around? We’ve all heard the expression, “first impressions last a lifetime.” A lasting expression goes well beyond a signed contract. Lasting impressions also lead to referrals.

Improving gross is more than just a state of mind; it is an outcome of streamlining processes to maximize efficiency and doing the little things that separate you from your competition.

Posted February 16, 2015 in: Automotive Retail.

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