3 years into the business, I am still struggling with pricing. I'm seeking advice so that I know precisely what I'm doing with pricing instead of just guessing. We're selling $15,000 - $30,000 diesel pickup trucks. Here is my dilemma:
Let's say I buy a truck for $15000.
We all know it's very rare that we get to source inventory at BlackBook Wholesale. My question pertains more to the amount of margin that successful dealerships add to manipulate the attention of shoppers. Pricing the vehicles at NADA or BB retail = zero phone calls. What should I expect to make per car as a general rule of thumb? Are the truly successful dealerships just selling a lot of cars for a smaller margin? The other dealers I know seem to be doing the same thing as me. Adding $2000-$3000, hoping someone bites, only to end up lowering it right back to only $1000 profit, if that. Any advice would be highly appreciated!
My philosophy has always been turn over gross. I'm at a different price point. I mainly do vehicles between $2000-$5000. Maybe once per month at the most I hit a home run and make $1500 plus. I try to make about $750 on most deals. It's not for everyone but it keeps the money in motion. As for what you should make on a car, you know your market, you know what you can sell a vehicle for, buy based on that and figure what the least amount of money you're willing to make is. I'd be happy making a grand per deal, but probably not so happy having to spend 15k to do it.