CarMax is a Sourcing Machine
In CarMax’s recent public filings they disclosed they purchased around 300,000 used vehicles. 269,000 of those were directly from consumers, roughly 90%.
The takeaway: The competition is fierce for sourcing 1-3 year old used vehicles from consumers.
The “Detailed” Approach to Sourcing Vehicle Inventory Online
We see two different approaches for dealers to source these vehicles, and we’ll break them down here on TradePending TV.
The first approach is to basically work the deal entirely online. When someone considers trading in their vehicle, they visit the dealership website, and go through a very detailed process that involves entering a VIN, taking pictures, notating scratches, selecting every option available, and more.
The upside is that you can get a lot of the work done before they arrive in the showroom.
The downside is this takes 3-30 minutes and cuts back on your opportunities to have a conversation.
If 10,000 people visit your site, and 100 decide to value their car, typically only 5-10 will complete that entire process.
The “Quick” Approach to Sourcing Vehicle Inventory Online
The second approach is to not work the deal online, but instead provide either a quick trade-in range or a single price offer in the timeframe of 10 seconds to 1 minute.
The downside being that you’re getting a bigger pool of prospects that may not be as highly motivated.
The upside is that you get a lot more chances to speak with consumers about acquiring their cars.
10,000 people visit your site, 100 decide to value, 40-60 will complete the entire process, versus 5-10 people.
Dealers Adopt Both Approaches…Or Aren’t Aware
We see dealers adopting both approaches. Some choose the detailed approach because they just want the super motivated shoppers. Some say “Just get as many chances as possible and let my team work their magic”.
And some just aren’t aware which approach they have.
If you haven’t taken the time to value your car on your own website, give it a go and see which approach your customers are experiencing.
