Having the right automotive inventory management partner for dealerships is a must. It’s easy to overlook inventory management, but not giving it the attention it deserves can cause issues that hurt your business.
Imagine a customer coming in for a specific automotive part you think you don’t have, only to find out later it was misplaced. This loses a sale and damages your dealership’s reputation.
Alternatively, overstocking ties up your capital and creates higher storage, financing, and depreciation costs. These problems, like aging inventory, cash flow issues, and increased theft risk, can often be avoided. The solution? Beyond conventional vendor relationships, vehicle inventory management software helps you keep track of your inventory, streamlining operations across the entire customer experience lifecycle. See the four qualities that define a great inventory management partner below.
1. Strategic Collaboration
Partnership drives successful dealership inventory management. A partner who understands the nuances of automotive industry management actively collaborates with your team. They listen to your needs, align customized strategies with your goals, and adapt to changing market dynamics. Regular communication creates trust and ensures a shared commitment to matching the right VIN with the right buyer at the right time.
For example, industry leaders like Lotlinx use their unique marketing-integrative VIN View Optimizer (VVO) to accelerate innovation and decrease time-to-market. Collaboration with these capabilities unlocks valuable dealer-specific inventory information, purchase order tracking, invoicing, and payments.
2. Data-Driven Decision-Making
A great inventory management partner understands the power of data. They leverage advanced analytics and insights to optimize inventory levels, predict demand fluctuations, and streamline supply chain operations.
Among the challenges posed by lead generators, the real focus is finding a partner with the unique ability to connect VINs with individual buyers genuinely interested in making a vehicle purchase — whether it’s a truck, convertible, or SUV. This is what truly transcends traditional marketing. When customers are matched with the exact VIN they are looking for, they buy more confidently and transform casual browsing and clicks to a VDP into actual purchases.
Inventory management partners tailor strategies to find qualified leads based on real-time data, tracking things like pricing, margin, sales, DOL, turn rate, and even the weather. The flexibility to pivot strategies based on market demands reflects a partner’s responsiveness to industry trends showing they care more about tangible results, not raw lead numbers.
3. Inventory Turnover Optimization
Inventory turnover—the rate at which you sell through and restock your stock—is a critical metric. A leading partner helps you strike the right balance. While the ideal turnover ratio varies based on factors like vehicle type and market conditions, aiming for 8 to 12 times per year is a good benchmark. They assist in managing stock levels, preventing overstocking, and minimizing obsolescence.
Managing a large inventory across multiple stores demands a partner capable of impacting day turns positively. Seek partners that nurture dealership profitability through quick inventory turnover, positioning the dealership repeatedly among the top performers. They will predict the best VIN-specific planning and execution for you.
4. Proactive Demand Forecasting
Anticipating customer demand is important for maintaining inventory levels. A great partner adapts to the unpredictable used car market and employs advanced forecasting models that predict market trends, seasonal variations, and customer preferences. Acknowledging the market’s volatility, capable vehicle inventory management software excels in quickly identifying qualified acquisitions and buyers, preventing potential losses and margin risk in the used car market that demands a quick turn of vehicles. Many of these partners use Lotlinx’s omnichannel AI solution to track over 8,000 dealer websites and follow every shopping action down to the VIN.
It’s Your Dealership. Control it with Lotlinx.
Picking the right partner for managing automotive inventory determines the dealership’s success. Through structuring and optimizing a partnership with a leading IMS expert, you gain instant access to core technologies and capabilities designed to support the product integration agenda and improve the customer experience throughout the product life cycle.
Top auto companies will keep these four qualities (strategic collaboration, data-driven decision-making, inventory turnover optimization, and proactive demand forecasting) in mind when searching for partnerships and position themselves to thrive throughout the turbulences of the automotive industry. For more information on how an inventory management partner can help, contact Lotlinx — our team is made up of an internal team of data scientists dedicated to the auto vertical, an AI/ML engineering team of over 15 members, and strategic account management and performance teams to help co-develop your success.