CarFlingAsks William Miller how to successfully sell used vehicles
Taking a look under the hood, at William’s 31-year run with South Africa's automotive industry.
For this second episode of CarFling Asks, we got a bit more personal with DealersOnline founder and CEO, William Miller as we look at his long journey with the used car market and tap into the knowledge he's accumulated about the secrets of the trade.
Q: Tell us about your journey leading up to DealersOnline
A: I’ll have to jog my memory a bit... I started out working for a family-owned group - Toyota Dealer Group - in the used car department in 1992, a very interesting time. Toyota has always been a top seller, so even at that stage, we had the market; we sold anything and we bought anything.
For me, it was always a matter of searching for stock and trying to get vehicles from all over the place. We sold a lot of car rental fleet, no different to where it is now. Toyota itself was a volume brand, which made for a lot of activity.
I then left Toyota to go to Audi, which was a new entry player but not yet a big value player. So I had to try and create volume in a dealership that was doing 15 to 20 vehicles a month. That was exciting for me because the brand was fighting against BMW and Mercedes-Benz at that stage for that particular sector.
Getting that dealership to 50 units a month was a fun challenge for me. Everyone that I knew or saw was soon driving an Aud, a good sign that I was where I needed to be at the time.
And then I made my move to Mercedes-Benz, which was difficult, to be honest. I was so passionate about Audi as a brand and you know when you’re selling something you love and care for, to move to the opposition felt like I was cheating. But Mercedes was a higher-volume player at that stage and I needed to make the decision that was best for my future. The move also made more sense for my life outside of work - my family. I ended up really enjoying this job and appreciated how massive an opportunity it was.
Q: What sparked the idea for DealersOnline?
A: Before DealersOnline, we had to go and call all the car rental places asking if they had any stock. In those days, they’d send you a fax and they’d say “This is what we’ve got to sell and this is what we’re trying to get, make us an offer” and the more you buy, the lower the price.
There wasn’t anywhere you could log onto and go and buy vehicles. You had to foster good (really good!) relationships with people in order to get the stock.
So that’s where the idea for DealersOnline came from. I wanted to try and make it easier for people anywhere in the country, to source good quality stock effectively.
From my experience working with high volumes at Audi, I saw how we were getting in a lot of volume, a lot of trade-ins, and talking to a lot of traders looking for stock. That’s when I thought, why not put this thing online and give people the opportunity to actually look at what we’ve got to sell without having to have hours of conversations?
Q: Through your experience, what are your top tips for being an effective salesman?
A: Always ask the question, “would you sell this vehicle to your mother?”.
It sounds funny, but you have to be completely honest. If the vehicle doesn’t suit them, don’t sell it to them, because they're always going to end up coming back saying “but you should have told me!”.
If you ask the right questions, you'll get the right answers, and put them in the drivers seat of the right car.
Remember, if you’re selling used cars, you have vehicles from across the board so you have a lot more at stake.
The object of finding the vehicle has dramatically changed with the internet and different platforms like Gumtree and Facebook marketplace, there’s seemingly a never-ending supply of classified listing aggregators. So it’s very easy to get vehicles out there.
But one of the major challenges is actually finding the right vehicle for the person, along with building the trust to get them to buy a vehicle from you.
Q: What is the difference between selling used cars and selling new cars?
A: Every new vehicle is the same but every used vehicle is unique. The vehicle’s previous life and the way it was used, shaped the condition it’s in and that’s what makes it one of a kind.
I think with new cars, it seems like the majority of customers know what they’re buying because it’s new. But in used cars, you don’t have that same luxury, which makes it a completely different kind of sale.
Those are the biggest competitors - used vs new.
The customer comes in and he’s either looking for a very good used vehicle with low mileage and in good condition, or he is going to buy a new where he knows that he’s getting a new car with a warranty.
It’s a bigger job for the used car guy to actually sell a vehicle to a customer. To find the right stock, merchandise it properly, and making sure that it looks like a new car so that the customer gets that same “new car” feeling on that vehicle - that takes a lot of work.
In terms of challenges in the used car department, you’ve got reconditioning and managing that entire process.
Q: What’s the low-down on structuring a deal?
A: I think to structure a deal right now, you’re going to have to look at what the trade-in is worth.
What do you need to bring it in at? What is the settlement to the bank on the current deal that he’s got? You have to see that if you bring it in at a certain price, it's actually going to be worth it.
Sometimes, the only way a deal can happen is for you to get creative but I think that’s all a part of the honesty and the trust you’re building with the person on the other side.
If you can talk your customer through what you are doing at each step, if he knows a little bit more about the actual deal structure, he understands what he’s getting himself into.
Q: What does it take to make money with used cars?
A: You have to stand out as a used car dealer. When merchandising the vehicles, they must look as close to new as possible and be well prepared with the 180-point checks.
Make it visible to the consumer that there’s no risk point, and have the warranties available.
Make sure you pay the right price for the car so you can make a margin. And then, look after the consumer because you want him to come back to you.
Q: What are the core skill sets of the entrepreneurial trader?
A: You need to know what’s happening in the market and always look after your customer because that’s worth more than spending millions on advertising in the classifieds. It's about keeping your clients coming back for more.
It's essential to have a system in place where you can know your customer properly, know their needs, and know where they are in their life cycles.
Have a proper CRM system with the right data so you can market to your actual clients who have bought from you before, instead of the clients that require you to advertise on classifieds in order to get them into your system.
Q: Any last tips to share to be your most successful when selling used cars?
A: Get the right cars on the floor.
Look at the demographics, see what the needs are in a certain area. Find the right cars, and sell them at the right price, which is, you know, competitive towards what a new one would cost the customer.
Have an ownership mindset and commercial skill sets; become great at buying and selling and building a deal that you know through and through.
Also, have the softer skills to build trust quickly with your clients.
Lastly, have the tools and data - the customer intelligence. Have a history, knowledge, and understanding of the vehicles (and of the customer).