With today’s current supply chain disruption and increased demand in the RV industry, there is a lot more uncertainty and fluctuations around pricing. Taking the time to understand the data around pricing can make a huge difference in maximizing profit margins when you are pricing units for sale and acquiring pre-owned units for resale.
Today, the sale of a unit begins before the consumer walks into a dealership. In fact, twice as many consumers start their research online versus in a dealership. With consumers spending more time researching online than in dealerships, it’s important to have all information available for them so they can know what to expect. This includes transparent, accurate, and competitive pricing.
In your dealership, you know there are several factors that go into finding the right price for each unit. As a dealer, you must be aware of the total value of each unit, how much volume you are moving each month, how competitive your local market is, how much inventory is available, and much more. To help dealers take out the guesswork in pricing, RV Trader created two new pricing tools—Off-Lot Lookup and On-Lot Analysis. These tools use specific metrics to help dealers target the best price for their unit and maximize their profits. Let’s take a look at how it works.
The Off-Lot Lookup tool gives dealers the ability to review the market average price for individual units based on data that is sourced directly from our marketplaces. This tool was built so you have the ability to understand exactly how much a unit is worth and what your profit margin will look like with this trade-in. This data can be filtered down to the individual unit that you are interested in, allowing you to see how matching units are priced on our marketplace. This gives dealers an idea of how much they should pay to acquire a particular unit in order to return a profit once sold.
How it Works:
Within the tool, enter the specific unit for which you are interested in analyzing the data, filtering by make, model, and trim. After making these selections, you will see data begin to populate within the tool. You can then see the price of the unit and compare it to how long that particular unit has been on our marketplace. Looking at both of these metrics will give you a wealth of information to consider when making an acquisition decision. Additional filtering options are available to help drill down further, including price range, class, condition, year, and state.
The On-Lot Analysis report helps dealers analyze the pricing of the listings they have on our marketplace in a single view, which can be drilled down to a unit level. This can help ensure you are gaining maximum profit on your unit, as prices quickly shift in today’s market. Having these reports in a single view helps save time when comparing unit pricing to that of the market, state, and national average.
How it Works:
This report shows an unfiltered list of all inventory, including the class, year, make, model, trim, and additional details about each unit. Dealers can use various filters to narrow down or broaden the view of their inventory. After clicking on a specific listing, the dealer will be presented with information, such as how many similar units are on the site, average price of the unit, average PMI, average scarcity index, and more.
You may be wondering, what is PMI? The Price to Market Index (PMI) compares the dealer’s unit to the average market price of that same unit in the designated market area (DMA) that the dealer is searching. The PMI will be rated either above or below 100, with 100 representing the average price in the market.
For example, if a dealer is in the Orlando DMA, and they are looking at the PMI for their Forest River Salem 27RK, they may see that their PMI is 104. This number indicates that their particular unit is 4% over the average market price for that same unit in the Orlando DMA. If the PMI was 85, that would indicate that the dealer’s unit is priced 15% below the market average for that same unit in the Orlando DMA.
The scarcity index helps dealers understand how much more or less desirable, or in-demand, a particular unit they carry is, in comparison to the average unit in their market. This index works in the same manner as the PMI, meaning 100 represents the baseline scarcity and numbers that go above or below that number represent the percentage that the dealer’s unit is more or less sought after. Therefore, if the scarcity of a dealer’s unit is 125, the particular year, make, model, and trim they are looking at is 25% more in-demand than the average RV in their particular DMA.
PMI Price Adjuster
After reviewing the data shown in the tool and finding the units that are priced below market average, dealers can also use the PMI Price Adjuster to see how they need to adjust their unit pricing to meet or beat the average in the market. Without any adjustment, this tool will show what the price of the selected unit should be in order to match the average price of the same unit in the dealer’s market. If you would like to beat this price by 5%, you can slide the scale to the left until the number in the gray box reads 95. This will then display how the unit should be priced in order to be 5% lower than the market average.
Benefits of Using Pricing Tools
Now you know how the pricing tools work, but how can they specifically benefit your dealership? In situations where demand for certain types of units fluctuate, it can be tough to keep track of how well, or how competitively, your units are priced. In this scenario, you can look at all, or a subset, of your units where there is flexibility with pricing and make adjustments to ensure they are slightly below market average. Or, if you know that you are carrying more exclusive units that warrant a higher price tag, you can use the tool to ensure you are pricing high enough above market average. RV Trader’s Pricing Tools help your dealership maintain competitive pricing at the click of a button.
Another benefit is MSRP monitoring. In many instances, it is imperative that dealerships follow MSRP guidelines set out by the OEM. The On-Lot Analysis tool helps general managers and owners to keep an eye on their inventory pricing, where there are tight restrictions in places, so that they can direct their sales or financing managers to make necessary changes.
Did you know that you have the ability to integrate RV Trader’s Pricing Tools into your current package? Our Pricing Tools can easily be added to any package, offering detailed insights into how you price your units. Once added, the On-Lot Analysis and Off-Lot Lookup tools will appear in TraderTraxx, so you can adjust the price of your units in real time. Contact your RV Trader representative today or reach out to us at firstname.lastname@example.org to learn more about how you can add this key feature to your package today!