Madj Saboura, Senior Director, Offsite Solutions at Manheim

In today’s evolving industry, establishing a strong foundation for your wholesale strategy is critical. As markets adjust, demand shifts and circumstances change, having a reliable base will help you adapt quickly and maintain profitability.

Ultimately, how you buy the car and how you manage some crucial costs will determine how much margin you’ll get out of every deal. Follow these best practices and you’ll develop a profitable wholesale strategy from the ground up.


1. Control these costs

 The first step toward a profitable wholesale strategy is to make sure you’ve got these four costs under control.

Cost of the vehicle — It’s easy to lose margin if you’re overpaying for a vehicle upfront. Don’t settle for what could be an unfair price. Cast a wide net and use Manheim’s MMR tool to ensure you’re paying fair market value.

Transportation costs — Don’t let transportation be a restriction. Instead, expand your horizons when sourcing. You might pay less for a car that’s outside of your immediate market because it has less competition. You’ll pay for the transportation, but you should still save in the long run.

Reconditioning costs — Unexpected recon costs can be the most expensive of all. Shop via an outlet that gives you full transparency into a vehicle’s condition upfront. See exactly what you’re getting before you buy to avoid any unwelcome surprises.

Recognize the domino effect — When it comes to preserving margin, remember these costs are all relative to each other. For example, spending less on a vehicle could give you more leeway for transportation costs. Or paying reduced fees can make it easier to take on recon costs. Any opportunity to save will help you protect margins in the long run.


2. Know your audience

Now that we’ve outlined these crucial costs, the next step toward profitability is to fully understand what’s happening on your lot and in your market.

When consumers come to your lot, pay close attention to what they’re looking for. Are there specific vehicles they’re often asking about? Know what’s in demand to ensure you’re buying the right cars for your customers.

Then, zoom out and evaluate things on a wider scale. See what vehicles are for sale in your market that are similar to yours to find out if your cars are priced competitively.


3. Buy from a trusted source

Whether in-lane or online, you must buy from a trustworthy source that removes as much risk from the buying process as possible.

What features should you expect from your source of inventory? Make sure you have access to 360° interior and exterior views, audio and video engine tags, and condition reports that accurately reflect a vehicle’s condition. Manheim Express offers all these features and more.


4. Make the most of every minute 

How much time do you spend per week sourcing vehicles? The answer is probably more time than you’d prefer. There’s so much more you could be doing with that time. But don’t worry, you’re not the only one with this problem.

On average, dealers spend over 40 hours a week researching and planning for a purchase. That’s a ton of time to spend just on sourcing alone.

Time is margin in our industry. And efficient sourcing will help you put all the time you’re currently wasting toward growing your business. Manheim Express speeds up your sourcing by providing optimized vehicle recommendations that are based on your buying history.


5. Stay informed and remain flexible

Remember, the market is always changing, and that means we need to change with it. A flexible mentality using knowledge from the past and present will prepare you for whatever the future holds.

It’s important to learn from our past successes and failures. But don’t shift your entire strategy because of an enormous win or a gigantic setback. Overreacting to the peaks and valleys will result in more inconsistent results. Instead, focus on the median.

And while nobody has a crystal ball, statistics give you a stronger idea of what’s going to happen. Historical MMR is a great indicator of where the market is going. Look at 60-day, 3-month and 6-month pricing to get an idea of which direction a vehicle is trending.



Now go take back your margins

Apply this blueprint to your wholesale approach and the results will quickly follow. You’ll find the right buys, control costs and make more margin. Whether you’re new to the industry or have been wholesaling for years, these five steps will serve as a sturdy foundation for a consistently profitable wholesale strategy.  Have questions? You can reach me here at: