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Mistakes You Should Not Make if You Are a New Dealership
Avoid the big four common problems in car dealerships and set yourself up for success. Learn effective solutions to grow your customer base.
When starting a business, car dealers strive for loyal customers and sales growth as long-term goals.
Still, there are many challenges in automotive sales that can hinder progress. We’re sure your dealership will achieve great things in years to come, but why not take a shortcut?
Learning from your mistakes sure is valuable, but it’s also expensive and takes a long time. Instead, you can save yourself the headache by checking out our overview of issues faced by car dealerships, together with suggestions on how to overcome them. You’ll be able to avoid the mistakes without making them!
Did you open your dealership or are you still just thinking about it?
Whether you’re still thinking about starting a dealership or you’ve just opened your doors, you’re at a great point.
This is the perfect time to refine your strategies because you have a fresh start.
Since there are so many aspects to running a dealership, we suggest you take our guide on starting a used car dealership as a companion. It will help you navigate steps such as creating a business plan, building inventory, online marketing, and more.
The guide covers essential dos, but you’ve come to this article for don’ts. So, let’s see what they are.
What are the most common issues new dealers struggle with?
The four biggest mistakes we’ve identified in new dealerships are:
Mistake #1 - Not managing your vehicle inventory effectively
Mistake #2 - Poor quality of sourced vehicles
Mistake #3 - Ignoring social media
Mistake #4 - Unappealing car photos
Mistake #1 - Not managing your vehicle inventory effectively
One of the biggest mistakes new dealerships make is mismanaging their inventory. Common vehicle inventory challenges include overstocking, understocking, or having obsolete inventory that just doesn’t sell.
In other words, you either have too many cars that aren’t selling, not enough cars to meet demand, or cars that are outdated.
► Solution
You can fix part of the problem by staying on top of industry trends, as this will help you determine what stock to buy next.
However, you can take care of the cars that are already on your lot by using inventory management software. Depending on the solution you choose, you can keep track of your inventory and see what’s selling and what’s not.
DealerCenter is just one of the possible options
Most automotive inventory solutions also provide customer relationship management (CRM) tools.
The CRM buyer information can help you tailor your sales approach to match customer preferences. Ultimately, you’ll be able to offer the right vehicles to meet demand, keeping your lot busy.
Mistake #2 - Poor quality of sourced vehicles
Want your dealership to succeed? Just sell good cars!
If only it were that simple.
In reality, sourcing quality cars can be quite challenging. Dealers often end up with low-quality cars due to:
- Limited supply
- Pressure to quickly fill inventory
- Not working with reputable sources
As a result of poor quality-vehicles, you can end up with dissatisfied customers and a damaged reputation.
Luckily, there’s a way around that problem.
► Solution
It may seem like a good way to avoid this pitfall is by inspecting each car you buy on your own. That’s a valid option for sourcing used cars from other car traders, trade-ins, or repairing damaged vehicles.
But since you probably don’t have that much time on your hands, you should source cars from reliable sources known for always delivering quality vehicles.
For instance, eCarsTrade is an online platform where you can bid on ex-lease cars from various online auctions, all in one place.
Thousands of quality vehicles in one place
Each of the cars listed on eCarsTrade has undergone a detailed quality check by independent experts. And even though the entire platform is online, you can see vehicle descriptions, service history, and photos so that you can be assured of quality before buying.
So, why gamble with questionable inventory when there is a specialized used-car platform waiting to help you stock your dealership?
Mistake #3 - Ignoring social media
You’ve just cashed out on a new website, so aren’t you done with online marketing? Well, not really.
BusinessDIT reports that more than 70% of Facebook users check local business pages at least once a week.
With that in mind, it would be a mistake to overlook social media, as that’s a great way to reach local customers and keep them engaged with your business.
► Solution
Out of all the mistakes we’ve listed, this one is the easiest to fix!
For starters, you’ll have to create accounts on major social media platforms like Facebook and Instagram.
Make sure you use the description box well: show what your dealership does or sells so that customers can quickly see if your business meets their needs. Here’s how we did that on Instagram.
Once you’ve established your social media presence, it’s important to regularly post updates, share photos of your inventory, and engage with your audience through comments and messages.
After all, consistent activity on social media keeps your business top-of-mind for when buyers need a used car.
Mistake #4 - Unappealing car photos
Poor-quality photos can make even the best cars look unattractive, driving potential buyers away.
The usual culprits behind bad vehicle photos are the following:
- Cluttered background
- Bad lighting
- Grainy images
- Unflattering angles
Unfortunately, with other challenges that come with opening and running a dealership, some dealers just snap blurry photos with their phones and call it a day.
But seeing as 95% of vehicle buyers start their search online, it’s vital to present your cars in the best light possible. So, if any of your car photos contain the mistakes listed above, it’s time for a reshoot.
► Solution
Ideally, your dealership’s vehicle photos should look something like this:
What you see above are photos of our own stock, taken in our studio.
You’ll notice that all vehicles are clean, and their pictures were taken in front of a white background, using continuous LED lights to ensure consistent lighting.
That’s precisely what you should do to make your cars look appealing.
Another good practice is to also always include additional photos of key features of your vehicles, both inside and out.
Also, have you noticed that in most cases, the front wheels are turned slightly inwards?
That’s because this angle showcases rims better!
Using a tripod and implementing these tips is already enough to take decent car photos. But if you want even better ones, head over to our guide for taking excellent photos of used cars.
What do your clients expect from your business?
Essentially, if you’d like your dealership to succeed, you should stay away from dubious, uninspected stock, poor photos, along with mismanaged inventory and empty Instagram profiles.
All of these are red flags potentially redirecting customers to your competition. To avoid that, you should revise what customers want from your dealership, and how you can meet their expectations.
We’ll now list some common car-buyer requirements, and you can use them as a checklist to ensure you’re meeting your customers’ expectations.
✅ Transparency in vehicle history: Clients want clear and honest information about vehicle history, including past ownership, accident history, and maintenance records.
✅ Transparent pricing: All costs should be listed upfront, with no hidden fees.
✅ Quality customer service: Knowledgeable and friendly customer service, fast responses to inquiries, and a willingness to assist customers should be top priorities for dealerships that are yet to put their name on the map.
✅ Smooth buying experience: Both in-store and online, customers expect a clear overview of vehicles and efficient paperwork handling.
Dealerships operating for decades can afford to take certain liberties. New dealerships, however, don’t have that luxury—that’s why it’s crucial to build trust and establish a strong reputation from the start.
Focusing on meeting customer expectations can help you succeed in that.
eCarsTrade supports new dealerships - You can count on us!
Entering a new venture is easier if you have a partner to rely on. Now, eCarsTrade can’t really manage your social media profiles. But we can do something even more useful: our platform can help small to medium traders, such as yourself, easily source quality ex-lease cars for your new dealership.
Here’s how we can assist:
- User-friendly platform: You don't have to be a tech wizard to navigate our online auctions.
- Extensive vehicle listings: eCarsTrade lists thousands of quality cars from different auctions. Much simpler than browsing them all individually!
- Expert support: Get assistance from our knowledgeable team to make informed decisions about your purchases.
- Transparent pricing: We offer a clear, fixed commission rate based on your bid amount and the vehicle’s origin, so there are no surprises.
- B2B-oriented: We provide all details and documents, ensuring compliance and making your experience effective.
Appropriate dealership management tools and good car photos enhance an already strong foundation. However, quality vehicles are the true backbone of every dealership.
So, if you want to ensure you’re handling the most important aspect of your dealership effectively, we’d be happy to help!
Importing vehicles from Europe can be complex, but eCarsTrade is here to simplify the process. Learn how to fill out a CMR form for international transport, and discover the step-by-step process for importing a car to Italy, Portugal, Germany, Spain or France.
