With Inflation rates hitting an all-time high, operating a Motor Dealership in the UAE has never been harder. However, there are ways you can minimize the impacts rising inflation has on your dealership and still achieve high profitability.
Here are 5 Strategies Motor Dealers in the UAE Can Use to Combat Rising Inflation.
1. Automate Daily Dealership Tasks
To combat rising inflation, your dealership needs to put a strong focus on operations. The first way that your dealership can combat rising inflation is by automating your daily dealership tasks.
Using a Dealer Management Software like EasyCars, dealers can automate many daily dealership tasks like Stock Management, Vehicle Advertising, VAT Calculations, Accounting and Website Listings. The benefit of automating dealership tasks is it will reduce your dealerships expenditure and give you more time to focus on achieving profitability.
Related Article: 5 Tasks UAE Motor Dealers MUST Automate in 2022.
2. Reduce Costs Where Possible
The only way that your dealership is going to combat rising inflation is by reducing costs where possible.
One of the biggest expenses for all Motor Dealers in 2022 is Vehicle Advertising. Many dealerships make the mistake of sending their vehicles to many different advertisers without reporting on the Return on Investment (ROI). The problem with no reporting on ROI is you won’t know what advertisers is producing a good return and who is not – you could be losing thousands without realizing.
To reduce your advertising spend your dealership need to have a strong reporting system in place that instantly lets you know what advertisers are providing high quality leads and what advertisers are not. There is no point sending your vehicles to advertisers that don’t provide a return. Your dealership should only send vehicles to advertiser that provide a strong return. By adjusting your dealerships advertising, you could save thousands every year!
Related Article: 5 Vehicle Advertising Mistakes UAE Motor Dealers Make in 2022.
3. Evaluate Your Vehicle Pricing Strategy
With costs rising, people are becoming more and more price conscious. To be successful buying and selling cars in 2022 your dealership needs to have a competitive vehicle pricing strategy.
Before you begin selling cars it is important that you research what price competitors are selling similar vehicles for and either match or better the prices that they are selling them for. The better the price, the more likely you are to have someone buy.
4. Look For Cheaper Ways to Source New Vehicles
The biggest challenge facing Motor Dealers in the UAE is sourcing high quality vehicles to sell at the right price. Many Dealers are making the mistake of getting into bidding wars for new vehicle stock. The problem with doing this is you are limiting your potential profit margin when you go to sell that vehicle later.
The only way that your dealership is going to source new vehicles to sell at the cheapest possible price is by thinking outside of the box. The more demand there is for a vehicle, the more you will pay, it’s that simple.
One of the best ways to source new vehicles to sell at a cheap price is to reach out to your past customers. Ask your past customers if they have or know anyone who is looking to sell their vehicle. Since they have had a good experience buying from you in the past, they may be more enticed to help you out. The benefit of reaching out to your past customers is you avoid getting into bidding wars like you normally would with standard vehicle auctions.
Related Article: How Car Dealers in the UAE Can Source More Vehicle Stock in 2022.
5. Business Reporting
Having a strong reporting system in place has never been more important than now. To combat rising inflation, it is important that your dealership has or sets up a strong reporting system that gives you fast and easy access to vital dealership information.
The benefit of having a strong reporting system in place is it gives you the ability to make fast and strategic business decisions that push your dealership further into the future.
Related Article: How UAE Motor Dealers Can Improve Reporting.
Inflation is hitting all businesses hard. The only way that your dealership is going to combat rising inflation is by having the right strategies in place. The 5 strategies mentioned above are a few great ways your dealership can combat rising inflation in 2022 and beyond.
We hope you enjoyed reading this article. To read more articles like this, please visit the EasyCars latest news page here.
EasyCars by Jeal is a UAE Motor Industry Specific, Dealer Management Software that automates the daily tasks of running a motor dealership. Using the latest technologies, EasyCars removes frustrations experienced at the dealership - opening the doors to future growth.
EasyCars features include Simple Stock Management, Automated Advertising, Automatic VAT Calculations, Xero Accounting Integration, Facebook Automotive Inventory Ads, Dealer Websites and Business Reporting in the one central management software.
To learn more about EasyCars or to arrange a no-obligation free demo of the software, please submit the form below.