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Automotive Series: Top 6 Metrics To Track For Your Inventory Management

Automotive Series: Top 6 Metrics To Track For Your Inventory Management


Why is inventory management crucial for an auto retailer?

Inventory can play a substantial role in the health of a business—having too much can cause problems, as can having too little. With an inventory management analytics, automotive retailers can get visibility into items across all channels, ensuring the right items are available, at the right time, in the right place.

Let’s discuss the key factors that you should be tracking –

Cost to market:

Effective dealers minimize costs to make inventory procurement efficient. Your dealership can make the most of its inventory by narrowing (not eliminating) costs and bringing in high-value inventory.

Inventory Turn Rate:

This is the overall in-stock inventory of your dealership versus your team’s monthly sales. The effectiveness of the dealership departments is key to increasing your dealership’s turn rate. Faster turn rates on fresh inventory will improve your GMROI across dealership.

Gross Margin Return On Investment (GMROI):

The GMROI is a useful measure as it tells the average amount that the inventory returns after its costs. A ratio higher than one means the dealership is selling the stock for more than it costs to acquire it and shows that the business has a good balance between its sales, margin, and cost of inventory.

Average Days to Sell Inventory (DSI):

This measures how long it takes for your dealership to turn its inventory into sales. When the measure is high, it may indicate that your inventory movement is inefficient.

Vehicle Demand versus Inventory:

Every vehicle has a window for maximizing its return on investment. Your dealership can determine the best-selling window by tracking a vehicle’s market value and demand. This information should also help you with your appraisal and inventory sourcing.

Mechanical And Cosmetic Reconditioning Time:

Auto dealers need to keep the inventory fresh and moving in an economical timeline. The longer a car spends in the shop, the lesser time it’s out for sale.  Efficient dealers solve reconditioning delays. 

NRoot Labs is an end-to-end BI solutions provider transforming Data into Valuable Insights for Automotive Dealerships. To know more contact –