Fusion Management Briefs - Issue 10

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Essential Insights for Automotive Professionals

NOVEMBER, 2013

03 05 08 11

Leveraging on Technology An Interview with Ric Collins The Importance of Good Cash Flow How To Sell A Car Used Vehicle Stock Management

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Regards, The Fusion Team

ABOUT US Fusion Business Solutions is a performance-focused consulting group that offers a range of client solutions, including training, consulting and in-business coaching. We also operate a wholly owned software division called Op2ma, which provides leading-edge web-based management and customer feedback tools. With our Head Office in Adelaide, Australia, we operate in most markets throughout Australia, New Zealand, the Pacific and Asia. We have offices in Melbourne, Sydney, UK and Shanghai (China). Our philosophy is to offer our clients profit-enhancing solutions, which are both costeffective and innovative. With the business and retail landscape becoming increasingly more complex and challenging, companies must adapt and change, or risk falling further behind. Our clients see an ever-increasing need to enhance skills and processes such as pro-active financial management and employee performance management.

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November 2013 Page 2

Executive Insight

Leveraging on Technology An interview with Ric Collins – Chairman for Jarvis Cars

Several years ago, I visited a Carmax dealership in Los Angeles while at a NADA conference. Meeting with one of the Vice Presidents of the company, he quoted to me “knowledge is power”.

His organisation maximised technology to create a competitive advantage. I took this thought back to Australia with me and over the years have applied it to give Jarvis an advantage in the automotive marketplace.

What contribution has technology made in helping your business stay ahead of the competition, particularly in increasing profit and sales?

Technology has caused rapid changes in the way we do business. I firmly believe those dealers fastest to adapt to these changes and implement them will be most successful. The only security a business has today is its adaptability to change.

How do you assess technology and its relevance to your business? Do you have a formula when deciding what to take on and what to give a miss?

Technology does create much data and sometimes you can get lost in the detail.

The important thing is to have clear KPIs and calculate the most efficient matrix to use to readily and accurately measure your performance against these benchmarks.

One of the considerable advantages of technology is that you can access this information anywhere in the world at any time.

With people in the automotive industry being mostly “change” averse, how do you implement technological changes throughout your organisation? How do you overcome resistance to changes in your organisation?

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How do you feel about using technology to create a competitive advantage in the automotive retail business today?

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Essential Insights for Automotive Professionals

Jarvis wanted to be one of the most computerised dealerships in Australia and when we started the journey there was resistance particularly from sales staff and others in the group not computer literate.

The biggest challenge that needs to be faced is, once accomplished, how does a dealership go about updating, maintaining and expanding the skill sets necessary for the staff to maximise the use of this technology.

Although we provided extensive training and coaching, there were some staff uncomfortable with the change.

Unfortunately, one way or another we parted ways with those because we could not allow the resistance of a few to hold back the long-term growth of the business.

I sometimes give the analogy, ‘there is no point driving a Ferrari stuck in first gear’- because you cannot get the most performance.

Today this is not a problem whatsoever and often works to our advantage because staff are reluctant to leave and take a backward step by joining dealerships that have not made the technological commitment.

How do you convince veteran managers and employees to adopt new technologies as part of staying competitive?

This is not a problem as peer group pressure from within challenges people to make the necessary changes.

New technology can take a long time to have a positive effect. How do you track Return on Investment for new technology investments?

Technology alone cannot increase profits within a dealership, there has to be a commitment from the Dealer Principal down to adapt and implement the opportunities new technology creates.

Likewise, so many dealerships purchase software, which can do so much to improve their business but only use a few of the functions available.

Many businesses fail to expand the skill sets of their staff. Most use on-the-job training from other employees who pass on bad habits. This means many functions the software has available are never used.

In what way has it changed the way every one works?

The accomplishment of the Net Promoter Score methodology for tracking customer satisfaction and the technology to measure and record these results has changed the way we do business.

We now have the means to analyse daily the performance of each salesperson and service adviser, and compare their scores within our group. This has provided us with the means to improve our customer retention and keep our workshops filled with retail labour sales.

Can focusing too much on the latest technology be bad for business? Has technology ever become a hindrance rather than help?

Technology has provided the greatest positive influence for our business. The introduction of the Internet and the ability to market from our own sites and third-party sites has opened a new world for us and has extensively reduced the cost of our advertising.

We can measure the effectiveness of every dollar we spend. We analyse every day the performance of all our new and used car departments and the way they handle leads and convert them into sales.

We can then concentrate on improving new and used car departments not meeting KPI benchmarks.

Looking ahead, how do you think the automotive retail business will change over the next 5 to 10 years?

What are the biggest challenges and opportunities for a dealership?

The biggest challenge to dealerships today is improving productivity and efficiency.

To survive with so much ‘drive away’ price advertising, ‘capped priced’ servicing and all the other attacks on dealer profitability, dealers need to find better ways of doing business.

Technology will provide us with many opportunities to reduce cost. The dealers who succeed will be those who rigorously use, implement and update their technology constantly.

Working with Op2ma, Harley-Davidson Australia won an International CSI Award.

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Be smarter Maximising Performance

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Call Tim McGrath on 1300 807 177

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Op2ma’s CSI Solution. Change starts now.

The importance of good cash flow On the other hand, cash inflow occurs when a business collects cash from its sales to customers and uses that cash to manufacture more goods or render more services, therefore, restarting the cycle.

The idea is to ensure that cash coming in exceeds cash going out. That is the basis of being profitable. Unfortunately, things are never as easy as they seem, because both cash inflow and outflow move in cycles, the challenge is always to ensure your business is not in a situation where outflow significantly exceeds inflow for any extended period.

Despite most businesses having a primary inflow of cash from the sale of

goods or services, other sources can also provide inflows, such as from: • A bank loan, • An investment in funds from stakeholders, • A line of credit, and Cash outflow can result from: • Paying for materials to manufacture goods • Cost of buying Stock • Acquiring fixed assets • Salaries and expenses • Tax payments and • Loan repayments, among others…

Cash flow management is crucial to the health of a business and collaterally to the relevant national economy overall.

Common Cash Flow Problems What causes cash flow problems?

What are the common problems that, if not attended, could lead to dire consequences? Clearly, when a business has insufficient cash to pay its current liabilities, or when the cash going out of the business consistently exceed the cash coming in. Much has been written on cash flow management, from which we learn that common problems leading to negative cash flow situations are: Falling Profits The most common cause of cash flow problems, because revenue from the sale of goods and services is the most important source of cash for any business. When the business makes relatively lower profits over time, either because of competition or mismanagement, it will lead to serious cash flow problems. An overaggressive market penetration strategy that involves cutting prices to gain market share can BUSINESS SOLUTIONS

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The cash flow cycle is the process of moving money in and out of a business.

A business expends cash in creating goods or in the supply of services sold to customers. This is cash outflow.

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Essential Insights for Automotive Professionals

go wrong when not properly managed.

Businesses might take on additional loads or credit from suppliers but in most situations, making losses consistently will eventually lead to failure.

Too much Stock For automotive businesses, holding too much Stock can also tie up cash flow significantly. The need to hold enough stock to meet demands or to negotiate better prices by buying in bulk have to be balanced against the risk of the current stock becoming obsolete. A robust stock management system with a regular review is often necessary to ensure that minimal cash is tied up in dead stocks.

Over investment in capacity or overtrading This occurs when businesses spend too much on fixed assets, usually difficult to convert back to cash when needed.

Having the biggest, most impressive showroom does have a positive effect on brand image but to do so with expensive short-term finance can be suicidal if it does not translate into more profits quickly enough. Another example is a business expanding too quickly.

This is usually a result of a successful run, encouraging the business to extrapolate current sales revenue without considering diminishing returns. Classic examples are new dealerships, driven by overconfidence, opening many new outlets or showrooms, increasing rental expenses, stock, employee headcount and renovation costs.

Seasonal demands or unexpected changes As with many industries, the automotive retailer is often subjected to fluctuating seasonal demands such as tax-season or year-end demands. This is one of the most challenging problems facing automotive dealers. Too many dealers expecting increased or decreased demand could lead to entire industries overstocking or missing opportunities.

Sudden changes in government legislation or economic conditions can also affect business drastically.

To effectively manage continuing cash flow, it is important for businesses to regularly analyse their cash flow situation and identify possible problems before they happen. Preparing a cash flow budget is one the most effective ways to FUSION

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help support prediction of future needs.

Analysis of the Cash Flow Cycle and Prediction Analysing cash flow generally involves looking at the following items honestly and realistically.

• Accounts receivable • Credit terms and policies • Stock • Accounts payable It is never easy to make a forecast, but knowing what to do when things go wrong is the key to a successful strategy.

Optimism is when you look only at a best-case scenario, but confidence is when you know what to do in a worstcase scenario.

A cash flow budget is a document that projects monthly anticipated cash inflows and outflows. Although this can also be applied to daily, weekly,

semi-annually, annually or even longer periods of forecasts, six months to a year ahead is usually the ideal period for most businesses to be sufficiently prepared while providing enough lead time to take corrective measures if needed. The danger of looking too far into the future is that one might ignore more immediate perils.

Because a business should model its cash flow for a full financial year, the best time to begin planning is at the end of the third quarter of the current fiscal year for the next. These projections or forecasts can be used to make the following decisions: • Investment on fixed assets like equipment and facilities • Increasing employee head count • Changing costs of doing business such as insurance costs, interest payments, expendables, security, and maintenance, among others.

• Negotiations with banks and credit providers • Production schedule and stock plan How to Improve Cash Flow?

There are three ways help improve cash flow, and each is driven by different strategies and approach.

• Accelerating cash inflow. This involves selling more, either in terms of volume or profit margins or both. Businesses can also improve receivable terms by collecting cash faster or in advance.

• Delaying cash outflow. This involves evaluating your terms of payment and negotiating more favourable terms of credit or longer payment terms with vendors, suppliers and manufacturers.

• Reducing cash outflow by reducing expenses or costs of doing business.

This involves finding more efficient ways to run the business by employing new technology or processes.

It is fine to increase working capital with short-term credit so long as the business is confident (not just optimistic) there will be sufficient cash to amortise or pay back the loan.

The Importance of Healthy Cash Flow in Retail Automobile Business One fundamental strategy for good cash flow management is to collect receivables as quickly as possible. One major factor affecting cash flow in automobile sales is the status of contracts in transit (CITs).

Any sale of a vehicle that involves financing, despite where the financing comes from, is essentially a CIT. Until the money is in our bank account, every vehicle sold is unpaid sheet metal sitting on the yard. Meanwhile, you have already

paid the manufacturer for it, and are incurring costs storing it. Imagine selling hundreds of cars on a busy weekend; there is no profit until it is converted into cash.

Although banks, credit unions and financing arms of car manufacturers do pay back CITs as quickly as possible, not all customers do. This is especially true with corporate clients and fleet customers. As businesses, they too will delay payment of a CIT if possible, especially when mistakes are found in the paperwork, whether it is a missing signature or form. Unless the documentation is complete, the customer will not proceed to release payment.

Businesses small and large have common problems with cash management and cash flow, and the challenges of receiving and collecting of payments efficiently and quickly is universal. Automated systems that reduce paperwork and manual calculations when generating invoices and commissions accurately can help reduce the lead time significantly.

A Group Business Manager that spends weeks consolidating commissions and F&I payments compared with another that does it instantly with a tool like Finance Accelerator can make a significant difference to their employer’s overall cash flow. Profit lost because of inefficient processes can be easily avoided.

Another strategy to maximise your current cash flow position is to enforce payment discipline to shorten receivable collection period. This includes implementing processes that call in accounts when possible after invoicing, especially if payments are not expected

immediately or if the customer has not been in touch. Without risking relationships, send reminders to ask for payment and stay alert to signs of customers defaulting on payment. An errant account, if large enough, can wreak untold havoc on a small business.

Finally, get everyone on board and make it a priority. Make sure all your employees understand why it is important. Sales employees should not have just sales goal, they must understand the importance of being paid on time or in full. Institute a policy where, if a sale is cancelled, the commissions are withdrawn. Or give incentives when payment is collected in advance.

Conclusion Managing cash flow is a daily battle for many businesses. Contracts must be collected on time just as customer accounts receivable need to be chased up all the time. It might be more difficult to identify problematic customer receivables than problem contracts, but in reality detailed and regular review of the accounts will make the process much easier. Effective processes must be in place for the identification of problems on receivables. Problems must be resolved quickly, preventing a small problem from turning into a big one.

Cash is the lifeblood of businesses.

Without cash new stock cannot be bought, bills and salaries will remain unpaid. Sales and accounts receivable are all excellent things to have on a chart but until they are converted to cash, it is just good intentions.

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How to sell effectively What are the steps in selling a car or motorcycle? Whatever it takes!

The principal reason that the steps of the sale must be followed is so there is control over the customer and whether a car or motorcycle is sold!

A look at the standard steps might well be needed. They are: Meeting and Greeting: An excellent greeting would be: “Welcome to My Own Motors.

My name is Marve, and you are?”

Do not ask questions that can be answered with a yes or no, so “May I help you?” or “May I get someone for you?” are not suitable.

They are only useful for the potential customer to object with “I’m just looking.”

Ask some either/or questions to determine the buyer’s needs. Ask if they are shopping for themselves or someone else. A car or motorcycle, truck, or an SUV? 2 Doors or 4 Doors? Light colours or dark?

Basic or premium models…?

Do check if they have spoken to someone else on your floor before, this saves embarrassment with colleagues and builds up trust.

Determine buying motive or S.P.A.C.E.D. People buy car or motorcycles for one of 6 reasons every time, namely, Safety/Security, Performance, Appearance, Comfort/ Convenience, Economy and Dependability. A good question: “What made you choose this car or motorcycle?” Knowing what motivates your customer to buy a particular car or motorcycle is essential in selling.

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Trial Close at End of Test Drive.

Once you finish the test drive, check if they will buy it. Affirm that it is the ideal vehicle for them and ask them to park it in the “Sold Line” so no one else will grab it …Then bring them inside – to your desk, to do the trial close not outside.

Attempt another Trial Close.

Move to the paperwork and start writing their information. Ask them, “In whose name do you want the car or motorcycle registered? In your name or in both names?” No objection means 90% sold. If they ask, “What are you doing?” answer the question! “Filling out the paperwork so you can get the car or motorcycle immediately”. No objection gives a higher chance of the sale going through.

Close the Figures. Do not say the figure out loud. Sometimes putting the figures on the buyer’s order and telling them to authorise it by pointing to where they need to sign, works. Sometimes

taking them directly into the F & I office and having your Finance Manager closing them on payments works better.

Get Credit Application, Copies of License and Insurance, among others. Let the customer fill out these forms, and just guide them if they missed a spot. Check with your lawyer why you should not be the one filling the form.

Get the Car or Motorcycle Cleaned and Fuelled! Put extra effort into this step…

Following up. Make sure that you follow up with the customer. They will be buying more car or motorcycles in the future and they will definitely have friends and family members who will also buy. Other than that, whenever you are with a customer, make it a point to study them: focus on learning something personal and professional about them. Focus should not only be on the immediate business opportunity.

Additional, long-term information gained will help in retaining the customer, and the long-time retained customers will provide more referrals.

Look for information that shows common interest to you both.

Perceptions A perception is worth a thousand words: have you thought about how a potential or new customer sees you? Do they see you as the expert? A professional who can provide them with the confidence they need? In today’s business climate, with so many competitors with vehicles similar to what we have, the difference lies in the confidence we project. Do think about confidence in how the customer will perceive you.

Connecting a current sale to something from the past gives the customer comfort. The customer will be happy that you remember everything that might have already occurred and have a sense of being valued. Aside from that, salespeople who have retained a customer for a period, their customers will appreciate it if they are recognised and that their relationship with you has value. Do recognise their anniversary, as it makes the customer realise how much you think of them and is an excellent way for you to take the relationship to an even higher level.

Becoming acquainted with your customers is another excellent way of moving forward. It does not matter whether you are selling to them. Taking

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Test Drive – drive with them.

Let the customer drive and use this opportunity to build rapport with them.

Ask them “This sure is comfortable, isn’t it?” Always add a short “Isn’t it?” at the end …

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the time to discover as much as possible about what motivates your customers might well reap unexpected dividends.

Benchmarking the Sales Goal It might well help with your improvement if at the end of each day and each week, your achievements are compared with your overall sales goal. If you achieved the volume needed to hit the goal, congratulate yourself ! If not, identify at least one thing that went right and use it to achieve your goal next time.

Finding something positive will help you set up your work plan for the next day or week!

What if No sale occurs?

Do not plan to present all your information on a sales call, because you will have something left to show the customer if the end of your presentation is reached without a sale. The key to a successful sales strategy is to know your information well and to be prepared that you do not need to present everything to gain the sale. Remember, in this matter, never give 100%: The customer should never hear your entire sales presentation!

Price Discussion Frequently, salespeople offer their customer a special deal if they buy now.

With this, only profit is given away and might well cause the customer to assume that you were hiding something.

Special deals need to be advertised upfront. When faced with resistance to price, offering the customer an example of something on which they spend considerably more money might help the customer put into context the amount they will be spending with you.

Sales Advocates & Referrals The best way to make a sale is to have someone else make it for you. You do this by creating sales advocates. These are your customers who are so impressed with your offer and probably the way you sell that they tell others about you without being asked. Obtaining sales like this also means that, your sales processes or service or both measures well with what people expect. Not having such referral sales from advocates means that you are not up to the mark.

It is important to understand why people do business with you. Ask your customers why they chose you. Also try to ask those who chose your competitors why they decided not to do business with you.

Discovering anything that needs change in your sales process is a free way of obtaining good and useful feedback.

Other Closing Techniques Other than the standard closing and follow-up activities there are more specialised closing techniques that also work, such as: The Gas Savings Close: Useful if they are trading a gas-guzzler for a more fuel efficient vehicle and when comparisons are made. Work on the mathematics in front of your customer, write the numbers by hand, and get them involved. It makes this close much more powerful.

Objection handling as a Sales Technique: “I want to think about it” is perhaps the most dreaded objection that a salesperson can ever hear.

However, using good techniques, this

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www.op2ma.com/salesaccelerator

November 2013 Page 10

excuse of an objection can be an excellent closing opportunity. Acknowledging the objection and verifying whether it is a real or reflex objection is an excellent way to start. Identify the reasons for the objection by asking them if it is the vehicle and its options, the experience at the dealership, or is it the price of the vehicle. Usually it is the price, and that needs fiddling by offering these options: • Longer term of finance • Switching to a lease • Asking for some money down Mechanical Savings Close is usually a new warranty as opposed to paying to fix their old car or motorcycle.

Reducing the difference in payment to a small and manageable number works.

Prospecting Talking to everyone you meet, telling them that you are selling cars or motorcycles works over time. Anything to advertise yourself ! If your friends do not know you are selling cars or motorcycles how will they buy from you?

Is this all?

Working the sales process, mastering closing techniques, and following up are the foundations of selling. The effect of prospecting and perceptions might well entail more. Objection handling is really about building rapport and relationships. A customer with whom you have a relationship will work for you!

Selling cars or motorcycles is complex as needs and financial strengths do not always match. Knowing every product, with every option, every add on, every technique might well help you sell better.

© Laitr Keiows / Shutterstock.com

Used Vehicle Stock Management

At a time like this, with overall depression in sales, precise vehicle stock management is desperately needed.

It might well be that vehicle stock management can determine whether we operate profitably.

Now, although it may seem obvious, good stock management will mean stocking more of what you are selling.

The dealership must determine its newto-used ratio but the industry averages in Australia for motor vehicles is “oneto-one”. One used car sold (excluding wholesale) for every new vehicle. This will vary depending on region, new vehicle product mix, franchise and dealership skill set. This, however, is a good point to start from. So what are the fundamentals of high-quality used vehicle stock management?

Work out what you are selling Dealerships now have very sophisticated software programmes either with DMS or CRM systems. A matrix of requirements should dominate used vehicles stock purchases. These

requirements should be a combination of previous sales and potential sales opportunities. Unfortunately, many dealers are too reliant on trade-ins and factory programmes for their mix and quality of stock rather than using previous sales as the driver for managing stock.

Determine level of stock to be held by segment & location The perennial question in used vehicle stock management is how much stock should you hold? Industry standards suggest the optional level is 45 days’ stock. This level may be a moving target with peak & troughs in sales; too little stock limits customer choice and too many increases both cost and risk for the dealership. A word of warning when creating segments in the used vehicle lot.

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The used vehicle department in a dealership can be described as a paradox.

Although it can be a major source of gross profit, it can also pose the greatest financial risk to the dealership. Why is this so and what are the major drivers of this success or failure? Most commonly a combination of problems occur produce a mediocre result when combined. The sale of used cars has seen a dramatic change over the last 10-15 years with the double barrelled affect of GST and the advent of online car sales but the fundamentals of good stock management have remained unchanged.

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Essential Insights for Automotive Professionals

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The quality of vehicles has improved so much that a 10 year old car today with 150,000 kilometres on it is a far different proposition to a 10 year old car 10 years ago.

If we have set our stock holding levels and determined our model mix what are the important policy points to review?

Trade & buy to your budgeted stock levels and mix. Make trading decisions on planned levels of stock. The most important principle to follow is to buy stock to plan, and not because it is available.

What do we keep? What do we wholesale? Prompt decisions regarding which to keep and to dispose of will keep your cashflow moving.

Ensure the valuation is realistic in the current market. Over valuing trades to close a deal is a necessary part of the sales negotiating process but from an internal perspective a traded vehicle must be valued at the realistic market value. Under allowance has the dual consequence of over valuing stock and increasing your GST liability. Used vehicle departments should not prop up new vehicle department profitability

Review Period

Stock

15-20 Days

All Stock

Have the Service Department quote on reconditioning costs.

The service department should treat the used vehicle department as a trade customer, and provide a firm quote for all reconditioning jobs. The used car sales manager should also check the quotes against standard occasionally.

Ensure vehicles are lot prepared exceptionally well. It is a consideration not to “over recondition” a vehicle but generally a higher reconditioning spend generates a higher gross profit. Also consider paying a bonus to the detailer for every used vehicle retailed. However, apply a penalty for every vehicle found to have a defect that affects a potential sale, for example, flat battery.

Prepare all stock for the lot promptly. All passenger trades should be lot ready within 3 working days, all commercial trades should be lot ready within a week. Consider using a night shift/overtime arrangement in the service department if there is a lack of capacity.

The first 30 days of a vehicle’s life on the lot are its best chance of selling.

Keep enquiry logs on all vehicles. Monitor all inquiry and

Activity • What enquiry have we had?

• Is the price realistic?

walk-ins both online and at the dealership. Track the inquiry by vehicle.

This will be useful in appraising the stock mix and in decision making at each vehicle’s monthly review.

Salespeople MUST know the stock on the lot. Ensure that all sales staff know all the stock. When a new vehicle is traded have all sales staff familiarise themselves with the vehicle.

Loan vehicle policy. Keep an accurate record (loan book) for all vehicles on loan to staff or customers.

Review this regularly to ensure that hot stock is not being lent out, specific vehicles are not always on loan and therefore not lot ready.

Ensure that stock is well displayed at all times. Change the yard display regularly. Know the hot selling spots and use them to maximum advantage. Ensure that the yard has colour and movement, and looks inviting to the potential buyer.

Track the effectiveness of your advertising dollar. Use the enquiry log to determine where customers heard about your dealership, and the vehicle they are buying. Use after hours silent

Action Independent stock review

• Has the car been reconditioned properly?

• Is it properly detailed and lot ready?

30-40 Days

All Stock

• Test drive to ensure there are no mechanical problems • Consider discounting to sell quickly

Test Drive Decision time

• Consider wholesaling the vehicle now.

All Stock

• If no apparent problems with vehicle revalue

60-90 Days

All Stock

• How should we dispose of the vehicle?

This vehicle is about to begin to cost you money. Can we sell or should we cut our losses Processes must be in place to ensure integrity of objectives

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45-60 Days

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salespeople and ensure good after hours access to the lot.

It should be noted, however, that we should exert sufficient control on the process to wrest control on the wholesaling process back from the Wholesalers. Do not wholesale retainable units. This may seem a contradiction but good processes significantly reduce retail quality vehicles from being wholesaled.

Promote extended warranties.

Use extended warranty to maximise income in the used vehicle department and in the service department by tying the customer back to the dealership for service.

Stock Reviews What do we do and when to ensure we do not have an aged stock problem?

Many dealerships have a strict 90 day policy. This means we wholesale all vehicles after they reach 90 days. But how did they reach 90 days and what did we do to avoid this potential loss?

What is Return on Investment (ROI)?

Merely put the greatest Return on Investment (ROI) and highest gross profit occurs when used car stock is turned over quickly.

The following graph, although using simple yet realistic assumptions, is indicative of a typical dealership.

Breakeven of Used Car Performance

It shows that even if opportunity costs are ignored and only traditional direct costs such as advertising and floor plan are included, the profit per unit falls until the breakeven point is reached at 40 days.

After 40 days an increasingly larger loss will be incurred.

It is interesting that even if the day 1 full gross is achieved at 70 days the accumulated holding costs will have already consumed the potential gross.

Since then a loss will be made in spite of achieving a “full gross”.

The key point is that it is desirable to create a mindset in your used vehicle department that it is velocity of sales that generate the best departmental gross profit.

A key element of success The more current the stock the greater the gross. Why?

$ 4500

• Newer stock produces greater gross profit per unit

4000

• If you need to ‘quit stock’ quitting early reduces wholesale losses

3500 3000

• Carry better stock as you can carry what is currently in demand

Breakeven Point

2500

LOSS

2000

PROFIT

1500

• Do not suffer “tear ups” from aged stock

Cost Per Unit $

Gross Per Unit $

1000 500 20 0

5

10

20

30

40

50

60

70

80

90

DAYS

Online Performance Reviews

FAST - EASY - ON DEMAND

Performance Reviews for Automotive Dealerships Call 1300 807 177 for a FREE ONLINE DEMO now!

Fast • Easy • On-demand

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Essential Insights for Automotive Professionals

November 2013 Page 14

www.revuu.com.au

N O I T A R T DMINIS

I I I E T A C I F I CERT AUTO A

For New

This programme is designed for new or experienced Automotive Administration staff and takes participants through fundamentals of working in their role.

Or Experi

enced A

KEY TOPICS INCLUDE:

dministra

tion Staff

CUSTOMER SERVICE SKILLS • Establishing and building relationships with customers • Maintaining the right business image • How to deliver and monitor service to customers • Handling customers’ complaints

BUSINESS TECHNOLOGY • Writing routine text in the workplace • Adapting work processes to new technologies • How to conduct an online transaction • Using numbers in an automotive workplace • Using information technology and systems

ADMINISTRATIVE AND BUSINESS SKILLS • Administrative work in an automotive workplace • How to organise and complete daily work activities • Effective communication in the workplace • Working effectively with others • Maintaining quality systems • How to solve routine problems in an automotive workplace

SAFETY & ENVIRONMENT • Applying safe work practices in an automotive workplace • Applying environmental and sustainability best practice in an automotive workplace November 2013 MANAGEMENT Continue Page 15 on back page...

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Essential Insights for Automotive Professionals

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CERTIFICATE III in AUTOMOTIVE ADMIN The programme is delivered using a combination of 2 workshops and online accreditation.

Participants will have a project to complete, as well as on-going assessments relating to the training to ensure that new knowledge is applied in the workplace.

FEDERAL GOVERNMENT INCENTIVES Up to $4000 in Federal Government incentives is available for new employees who are less than 90 days in your employment. Conditions do apply.

PAYROLL TAX EXEMPTION For Western Australia businesses, you can receive payroll tax exemption when you train your employees - helping you reduce the cost while increasing the skill set of your team.

SIGN UP FORM

FACILITATOR

Dealership / Company: Address: Post Code: Contact:

Postion:

Telephone:

Fax:

Email: Craig Rowney

Authorised By:

Management Consultant BFinAdmin, GCPA, Ass Dip Bus (Accounting)

Date:

Fusion Business College can now provide online accreditation to automotive industry professionals who are involved in Auto Admin. The process is simple and straightforward, and our experienced course assessors will take all the online information that you and your supervisor provide to prepare the assessment.

PAYMENT OPTIONS   

$3000 if paid 14 days from date of sign up $3240 if paid in 6 monthly instalments of $540 each month from date of sign up $3600 if paid in 3 instalments of $1200 based on payment schedule below (Payment scheduled at 14, 90 and 180 days from date of sign up)

FOR MORE INFORMATION

CALL 1300 807 177 Adelaide Office 1/83 Greenhill Road Wayville, SA 5034

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Essential Insights for Automotive Professionals

Sydney Office

November Suite 14, 12013 Chaplin Drive, Lane Cove West, NSW 2066 Page 16

Melbourne Office 5/499 St. Kilda Rd, Melbourne, VIC 3004

UK Office 25 Wren Ave LONDON,NW2 6UG