What is bucket management and how does it affect used car sales?

Welcome to this week’s episode of Used Cars Weekly, the original CBT News show dedicated to bringing car dealers best practices and tips for the used car department, in-depth dealer interviews, hands-on dealership strategies, as well as vendor analysis. Today, host Jasen Rice, founder of Lotpop, tackles what he calls bucket management.

In order to execute Rice’s ‘First-30‘ strategy, car dealers and used car managers have to make sure the dealership is carrying enough inventory. The first ‘bucket’ dealers can focus on is making sure that 60-70% of inventory is within its first 30 days. The second bucket revolves around ensuring that, at maximum, 25% of your inventory is 31-60 days. Vehicles in the third bucket that are over 60 days old, should account for no more than 5% of your total inventory.

Successfully managing the second or middle bucket is as important as executing the First-30 strategy. This strategy has a trickle-down effect. Multiple departments and inventory managers have to be on the same page in order to be successful. The second bucket is a little easier to manage, but more difficult to control. There is a greater sense of urgency to sell these cars that have maybe been overlooked or are not as lucrative to consumers.

In order to prevent bleed-through between these buckets, Rice recommends setting a pace or goal with your sales staff to sell 5% more than what is in that specific bucket. This is the kicker. If car dealers are not addressing their buckets, then they will inevitably end up with more than 25% of 31-60 day inventory on their lots.

For car dealers that are currently in the middle of aging challenges, start by reducing your over 60 days bucket by at least 20%. However, it’s important to remember not to neglect your other buckets if the majority of your attention is on the oldest cars. It’s okay if this process takes a few weeks, the important thing to remember, is to stop the bleed-through of buckets.

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