Pricing Strategies

[nssaab]

What price should internet depts give customers. msrp, invoice, % over invoice? I'm curious as to the pricing strategy of my fellow import sellers. right now we are at $200 over invoice (non-negotiable). to low? to high?

[PAULHAWK2]

Internet pricing is perhaps the most misunderstood area of what we do in Internet departments. The first rule is that PRICE does not sell cars! Second know your market! There are a few questions you have to answer before you establish a pricing model for your store. What do you sell a particular model for on the floor? Is it a hot seller with poor allocation that requires you to sell at window on the floor? Perhaps a dime a dozen sled that you are happy to unload for tissue? Your department should be in tune with what you sell units on the floor for and price accordingly. To answer your question more specifically, you need to understand that a vast majority of your Internet buyers are aware of what you pay for the vehicles and negotiating from top down (sticker) is archaic and an insult to their intelligence. Establish your price point based on the above parameters, answer those questions and negotiate from tissue up. Using percentage points certainly lessens the sting to the consumer (3% sounds less than $1200 doesnt it?)

If you want real answers from people who have sold cars on the net, and help sell cars every day, please check out what Bryan Hitt (guest expert) has to say.
Happy selling

[markrouleau]

You need to look at what your competitors are offering customers. Remember, you don't have to be the lowest price in 8 states and 14 counties to sell your cars over the internet, but you do have to be competitive with what your customer can buy locally.

If you are not having much luck with your current pricing plan, look at the following information from your internet dept. before you change it:

1) How quickly do we follow up with an email lead? The difference between 15 minutes and 15 hours is the difference between a sale and a waste of time.

2) How quickly are we able to provide the customer with information about the car, rebates, trade-in, and finance information? Again, the faster you get to your customer the better chance you have of getting their attention.

3) What is your competition doing on the web-front? Blind shop your competition. Look at their email response. How fast are they getting back? What price are they giving? Do they follow up with a phone call? Do they follow up in a few days with another email? What sort of information do they give at initial contact?

4) What is your own follow-up system? is it "fire-and-forget" or do you have a method for following up consistantly by email and phone with your customers?

If you are satisfied that you are doing everything right above, then you need to look at dropping your menu-pricing. And you may not need to drop it across the line. You may be able to hold on your higher-demand items, and drop on the slower moving vehicles.

Hope this helps.

Mark Rouleau www.marinadodge.com