Fast inventory turnover is the goal of every good dealer. The faster you can sell your existing inventory, the more profitable every transaction becomes. You cut down on inventory costs, make way for new models and keep your showroom looking fresh. It’s the cycle of dealership sales that keeps inventory flowing and dealerships growing.
In recent years, however, economic factors including inflation and high interest rates have made shoppers more hesitant to make major purchases. For dealers, sales have stagnated and inventory turnover has slowed. Many dealers are understandably concerned about the disparity between the number of units on their lot, versus the number of ready buyers in their sales funnel. They’re feeling mounting pressure to move older inventory and make room for new arrivals.
This article will give you some practical tips and best practices to overcome these obstacles and improve your inventory turnover rate, including the following:
- Maintain Accurate Inventory Listings
- Be Descriptive with Unit Information
- Include High-Quality Visuals
- Be Transparent with Pricing
- Promote Sales Offers
- Showcase New Arrivals
- Streamline the Sales Process
- Use Analytics to Make Informed Marketing Decisions
- Consider Working with a Vendor
Best Practices for Faster Inventory Turnover
Implement the following best practices at your dealership to improve your inventory turnover rate and keep sales from stagnating.
Maintain Accurate Inventory Listings
The foundation of a fast inventory turnover strategy is maintaining accurate online inventory listings. Nothing frustrates potential buyers more than finding out that the vehicle they were interested in is no longer available. The best way to do this is to implement robust inventory management software that syncs with your website and third-party marketplaces to ensure real-time updates. If you’re a Dealer Spike customer, you can utilize our Inventory Manager tool to add and remove inventory listings on your website. Click here to learn how.
Whatever software you use, it’s important to establish clear and consistent guidelines for data entry. Implement policies and procedures to ensure that all staff members follow the same guidelines when adding or updating inventory information. This type of standardization reduces the risk of errors and inconsistencies with your inventory and gives customers accurate, updated information.
Be Descriptive with Unit Information
The more information you can provide about your inventory listings, the better. Being descriptive not only gives customers the specific details they’re looking for, potentially sparking more interest in your inventory, it also boosts your SEO, driving even more online traffic to your site.
In addition to being descriptive with your listings, you can do a few other things to optimize your website and online listings for search engines. These SEO strategies include using relevant keywords and phrases in your product descriptions and adding meta tags and content to improve visibility in search results. These SEO strategies lead to higher visibility and more potential buyers discovering your inventory.
Include High-Quality Visuals
Consumers are visually driven creatures. They want to see high-quality images of your inventory, to the point that they can picture themselves with a particular unit. In fact, good and bad inventory visuals will often be the deciding factor for potential buyers when making a purchase. The Power of Pictures Study by Cox Automotive found that 90% of shoppers find unit photos to be extremely important.
Even though your shoppers are browsing on your website instead of at your dealership, they still want to get an up-close-and-personal perspective of the unit to see what it actually looks like. If you’re using stock imagery or no imagery at all, shoppers may wonder if the unit is worth their time, or if it even exists at all.
Invest time and resources to create high-quality images—it can make all the difference in improving your inventory turnover rate. Specifically, when photographing your powersports vehicles, implement the following best practices:
- Capture vehicles from various angles, including shots of the front, rear, sides and even from above.
- Highlight distinctive features, such as unique paintwork, branding and accessories.
- Use clear and appealing images to grab the attention of online shoppers and encourage them to explore further.
- Ensure proper lighting for high-quality images. Natural light is often the best choice for outdoor shots. If shooting indoors, use soft, diffused lighting to prevent harsh shadows and reflections.
- Give customers the option to zoom in on images for closer inspection.
- Consider interactive features like 360-degree views, which provide an immersive online experience.
Be Transparent with Pricing
Many dealers are hesitant to display pricing on their inventory listings, for fear it will drive away potential buyers. But relying on a “Call for Pricing” approach only creates roadblocks that most buyers aren’t willing to overcome. Being totally transparent with your pricing actually filters out shoppers who aren’t ready to buy that unit, helping you find and engage with serious shoppers.
Being transparent with pricing also makes your ability to offer discounts more effective. A discounted price has more power and appeal when shoppers know how good a deal they’re getting. It also enhances the searchability of your inventory listings, as shoppers tend to browse listings with specific budget constraints in mind.
In fact, displaying accurate pricing next to each listing, combined with offering shoppers an online financing tool, can fast-track the time to sale. This practice encourages customers to input payment details through a payment calculation tool, showing them a convenient breakdown of the overall price with realistic monthly payments based on lender rates and the shoppers’ credit tier and down payment details.
Promote Sales Offers
When inventory sits in your store and on your website for too long, it never hurts to draw a little extra attention to the individual inventory units. Offering promotions and highlighting discounted items can help you move inventory more quickly, reducing carrying costs and freeing up capital for new stock.
When you mark an inventory item with a sales price, feature it prominently on your homepage and category pages. It’s also a good idea to create dedicated sections or banners to draw attention to these listings. This practice, combined with transparent pricing, is a good way to let customers know they’re getting a great deal and improve your inventory turnover rate.
Showcase New Arrivals
Consumers are drawn to new arrivals. When potential buyers visit your website and see the latest and greatest units, they’re more likely to be excited and engaged, especially if you can highlight those new arrivals prominently on your site in a fun and interesting way.
Create a sense of urgency in new inventory by using phrases like “Just In” or “Limited Stock.” This encourages visitors to explore these fresh additions and make inquiries quickly. Before you can showcase new arrivals, make sure you have a reliable inventory management system that ensures real-time updates. Your DMS should be integrated with your website, so as soon as a new unit arrives in your showroom, it’s automatically listed online.
Leverage Third-Party Platforms
Your website is a valuable tool for marketing your inventory, and it’s made even more valuable when harnessing the reach of third-party websites to supercharge your sales efforts. If your Google Business Profile (GBP) appears in local search results, take the opportunity to integrate your website listings with your GBP to showcase your inventory alongside your business information. This extra step will get your inventory in front of shoppers directly in the search results page, which can make all the difference when deciding to click on your website.
Streamline the Sales Process
Your website is your digital storefront. It should provide an intuitive and user-friendly experience for every shopper. When your website is well-designed and well-organized, it makes it easy for customers to browse your inventory, find the information they need and initiate the sales process. Take the following steps to streamline the online sales process to enhance customers satisfaction and keep your inventory flowing in and out of your dealership.
Inventory Organization
- Keep important information above the fold. Remove unnecessary plug-ins and scripts to make sure everything featured above the fold belongs there.
- Group products together (vehicles, apparel, clearance, pre-owned, etc.).
- Include clear calls-to-action to help shoppers identify each next step.
Shopper Inquiries
- Offer dynamic texting, contact forms and clear call-to-action buttons on your website to make it easy for customers to inquire about inventory and initiate the sales process.
- Respond promptly to inquiries, providing the information and support customers need to make decisions.
Simplified Checkout Process
- Avoid lengthy forms and unnecessary steps and make the checkout process as straightforward as possible.
- Allow customers to save their preferences and information for future visits.
- A smooth checkout experience encourages customers to complete their purchases promptly.
Buy Online, Pick Up In-Store (BOPIS) Service
- Offer shoppers flexibility in how they want to obtain their purchase by providing a BOPIS service.
- BOPIS allows shoppers to research and purchase a unit, part or accessory on their own time (especially if they’re shopping outside of your business hours).
- A survey by Adobe has found that 79% of respondents appreciate BOPIS because of the convenience.
Follow-Up Communication
- Implement an automated follow-up system to stay engaged with potential buyers and keep your dealership top of mind.
- Send automated emails or messages to remind shoppers of items in their cart and to inform them of new arrivals or offer special promotions.
Use Analytics to Make Informed Marketing Decisions
Implementing website traffic analytics is like having a digital dashboard for your dealership’s online presence. It enables you to see where your web visitors are coming from, what they’re looking at and how they’re engaging with your content. Armed with this information, you can make data-driven decisions to optimize your online inventory turnover rate.
For example, if the bulk of your website traffic is coming from search results pages, consider running paid search ads for specific units. If you have a good social media following, you can use both organic and paid social posts to highlight the inventory you want to sell.
Organic posts are a free, straightforward way to promote inventory and engage with your followers. Paid social posts on Facebook and Instagram, on the other hand, allow you to target a specific type of buyer—based on their demographic, search history and location—to get your listings in front of individuals who are likely to convert into customers.
Of course, not all traffic sources are created equal when it comes to improving inventory turnover. Analyze which sources generate the most leads and conversions for your dealership. For example, you can use website traffic analytics to determine whether visitors from a particular search engine are more likely to make a purchase, or whether social media referrals have a high conversion rate. Once you’ve identified high-converting sources, invest in targeted advertising on those platforms, create tailored content and optimize your website for the specific keywords or demographics that bring in valuable traffic.
Consider Working with a Vendor
Managing every aspect of inventory can be a lot to handle for any dealer. If you want to improve your inventory turnover rate, a digital marketing vendor can help you optimize your website and inventory listings to rank higher in search engine results. This will make it easier for potential customers to find your dealership when they’re searching for their next adventure machine.
If your website vendor also manages your marketing strategy, you already have a valuable resource to enhance your inventory marketing strategy across all your platforms for faster inventory turnover. A website vendor can integrate real-time inventory management systems that sync seamlessly with your website and third-party platforms. This ensures that customers are viewing the most current inventory and minimizing the chances of disappointment due to unavailable products.
Improving Inventory Turnover at Your Dealership
Rapid inventory turnover is the cycle of dealership life that sustains success, improves the profitability of every transaction and paves the way for future growth. If your dealership has been impacted by stagnating sales and slowing inventory turnover, follow these tips and best practices to move out your old inventory and make way for new arrivals.