Merchandising Strategies for a Car Dealership

Car dealership is a business that offers sales, service and parts of automobiles. It executes merchandising strategies to increase sales and profits.


Typically, dealers try to match customers with vehicles they have in stock. But that isn’t always what the buyer wants. Dealerships should provide a complete vehicle history report.


The sales department of a car dealership is responsible for selling vehicles to customers. A successful car salesperson is able to convert shoppers into loyal customers and provide a pleasant buying experience. Salespeople should be able to understand a customer’s budget and financial requirements, as well as the type of vehicle that meets their needs. Salespeople should also know how to negotiate prices effectively.

Car dealers should offer regular training for their salespeople to help them improve their skills. This training can include teaching new sales tactics, as well as refining existing skills. Weekly training can help a salesperson’s performance and morale. The training may also cover F&I products, and how to sell accessories or service contracts.

A salesperson should always greet a potential customer courteously and professionally. This will help to build rapport and trust, which is critical in the car-buying process. The salesperson should also remember the customer’s name, as this will make them more relatable to the shopper. The salesperson should also ask the customer if they would like to get coffee or lunch, as this will further establish a personal connection with the customer.

A car dealer should set clear goals for each month, based on how many cars must be sold and leased. These goals should be communicated to the sales team so that everyone knows where they stand and how much work is left to be done.


The finance department at a car dealership is responsible for preparing all the necessary paperwork and negotiating the terms of a car sale. They often have to deal with customers who have bad credit and may need special financing arrangements. They also sell additional products and services such as paint protection, GAP insurance and warranty extensions. The finance department is a big source of profit for the dealership, making on average $1,000 per car sold.

Consumers who are considering buying a vehicle from a dealership should prepare before they arrive by shopping around and understanding their car loan options. The dealer is not required to offer the best interest rate, and many consumers find that they can obtain a better rate from their own bank or credit union. Those who have poor credit may find it easier to buy a car at a “buy here, pay here” dealership where the dealer and lender are both owned by the same company, but they should still research the loan terms carefully and be ready to negotiate.

Consumers who choose to use the dealer’s financing should ask for a clear breakdown of all fees and charges on the final contract, including normal taxes and title fees as well as any dealer finance reserves or other hidden costs. Depending on the dealership, these items should be clearly marked as separate from the purchase price of the vehicle or listed as add-ons in the finance agreement.


In a car dealership, the service department takes care of maintenance and repair work. It also sells parts and processes warranty claims. Employees in this department are trained by the manufacturer to diagnose and fix cars quickly and efficiently.

In addition, the technicians are able to offer a higher level of service because they know exactly how the vehicle was built. They also have access to technical support and service bulletins from the manufacturer. Independent mechanics may not have this same advantage. However, the downside is that car dealerships tend to be more expensive than indies and can push unnecessary services on customers.

Lodging a complaint against a dealership can be frustrating, but it is important to assess the validity of your concerns and document all relevant information. You should also review the dealership’s complaint procedures and escalate your concerns to senior management if necessary.

If you are unable to resolve your complaint with the customer service department or service manager, it is important to file a formal complaint with state regulatory agencies. This will increase your chances of a satisfactory resolution and make the dealership more likely to take your concerns seriously. You should include all relevant documentation and detail your specific issues clearly and concisely. Also, remember to remain calm and professional throughout the process.


The parts department is a key profit center at any dealership, but it often goes overlooked. Parts managers can improve overall dealership profitability by implementing simple strategies. These include having an outside inventory firm count the parts department annually and keypunch in each bin, offering competitive pricing on popular replacement items like oil filters and brake pads, and utilizing walkie-talkies to allow service technicians to call the parts desk.

Generally speaking, dealerships sell OEM (original equipment manufacturer) parts, which are made specifically for your vehicle. This means they fit better and perform more reliably than aftermarket parts sold in big box stores and online. The downside is that OEM parts can be more expensive than aftermarket ones, but some customers are willing to pay a premium for better quality and peace of mind.

Dealerships that offer competitive prices on the most popular replacement items can quickly generate revenue and profits. They should also be diligent in reducing the number of obsolete parts in inventory, either by selling them to other dealerships or returning them to the manufacturer. Additionally, they should regularly analyze their inventory reports to identify slow-moving and fast-moving parts and adjust prices accordingly. Finally, they should work closely with their service and repair departments to develop operational efficiency and reduce common time-wasting processes.