Reduce Monthly Expense by Partnering with ODS
Posted Date: 11/07/24
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Dealers are dealing with declining profits. According to a report from the Presidio Group, dealers are seeing an average 32% drop in variable gross profit since 2022—many are left wondering where to cut costs.
Often, the first impulse is to look at payables to reduce expenses, including paying a vendor like OnSite Dealer Solutions (ODS), who provides detailing, make ready, and other critical dealer services like inventory photography and recon. This can seem like a quick fix to bolster the bottom line.
However, an approach like this, where you are keeping your expenses variable by hiring a 3rd party vendor versus taking a “In-House” employee approach, dealerships will reduce fixed costs significantly, while streamlining their operations, and ultimately improving profitability when done right.
Costly Challenges of In-House Make-Ready & Recon Departments
The make-ready and reconditioning department is often viewed as a cost center—one that requires high investment and resources but generates little direct revenue. Attempting to manage it in-house typically leads to escalating costs due to fixed expenses and operational inefficiencies. These challenges include:
Often, the first impulse is to look at payables to reduce expenses, including paying a vendor like OnSite Dealer Solutions (ODS), who provides detailing, make ready, and other critical dealer services like inventory photography and recon. This can seem like a quick fix to bolster the bottom line.
However, an approach like this, where you are keeping your expenses variable by hiring a 3rd party vendor versus taking a “In-House” employee approach, dealerships will reduce fixed costs significantly, while streamlining their operations, and ultimately improving profitability when done right.
Costly Challenges of In-House Make-Ready & Recon Departments
The make-ready and reconditioning department is often viewed as a cost center—one that requires high investment and resources but generates little direct revenue. Attempting to manage it in-house typically leads to escalating costs due to fixed expenses and operational inefficiencies. These challenges include:
- Turnover and Recruitment Costs: Keeping detailing staff on payroll means dealing with high turnover, especially for hourly wage positions, which requires constant recruiting, hiring, and training.
- Administrative and HR Burdens: In-house teams come with the costs of payroll taxes, insurance, and benefits (PTO and idle labor), not to mention the management and HR time needed for oversight.
- Operational Expenses: These expenses pile up, including costs for shop supplies, chemicals, detailing tools, uniforms, equipment maintenance, insurance and even paying for lot damages.
Why ODS is the Smart Financial Choice
ODS provides a comprehensive, turnkey solution for all make-ready detailing and recon needs, allowing dealerships to avoid costly in-house operations while gaining an expert team, technology, and faster service. Here’s how ODS offers immediate cost savings and efficiency improvements:
Today, dealerships must be nimble and proactive in adjusting to declining profits by eliminating expenses. By choosing ODS, you not only reduce the burden of fixed expenses but also gain a reliable partner to improve operational efficiency and speed up the sales process. ODS makes detailing an asset to your dealership’s profitability, not a costly overhead.
If your dealership is struggling with turnover, HR issues, production delays, or high in-house expenses, we can make an immediate difference. Reach out to us today to learn how ODS can deliver measurable cost savings while streamlining your make-ready and reconditioning process.
ODS provides a comprehensive, turnkey solution for all make-ready detailing and recon needs, allowing dealerships to avoid costly in-house operations while gaining an expert team, technology, and faster service. Here’s how ODS offers immediate cost savings and efficiency improvements:
- Reduced Fixed Expenses: By outsourcing detailing to ODS, dealerships sidestep the burden of fixed costs associated with employee wages, benefits, and taxes. ODS supplies a fully trained team, along with uniforms, chemicals, and tools—everything needed to keep vehicles in top condition. This helps dealerships reduce overhead and focus resources on core revenue-generating activities.
- Simplified HR and Management: Managing an in-house detailing team requires time, oversight, and ongoing HR investment. With ODS, dealerships are relieved of these responsibilities. Our team manages recruitment, training, and scheduling, so you can skip the administrative headaches. Our staff arrives ready to perform, consistently delivering high-quality service and maintaining a streamlined reconditioning workflow.
- Faster Turnaround with Advanced Inventory Technology: ODS leverages proprietary inventory management technology to help dealerships increase speed-to-market on ready-to-sell inventory. The “average days to recon” (ADR) nationwide is 7-10 days. At ODS, our ADR is right at 48 hours, significantly reducing the time vehicles sit on the lot. Faster processing means reduced holding costs and more vehicles ready for sale, helping dealerships maximize profits.
- Enhanced Production Efficiency: Cars sitting on the lot waiting for reconditioning represent lost sales opportunities. ODS’s efficient, on-site detailing and recon services keep vehicles in top condition and ready for sale at a much faster pace. This reduces your “lot lag” and keeps inventory fresh, ensuring customers have a wide range of polished, sale-ready options.
- Ability to Flex Labor: ODS can manage flow, and send the high water mark needed for daily work – at a moments notice. Some days dealers need 5 workers and other days they need 10. ODS has the ability to flex that staffing day to day.
- Damage Risk Mitigation: With in-house detailing, there’s always the risk of accidental damage. ODS professionals are highly trained to handle vehicles carefully and have extensive quality control measures in place. We also carry comprehensive insurance to cover any unlikely mishaps, reducing your dealership’s exposure to costly repairs and liabilities.
- On-Site Convenience & Cost Reduction: For dealerships, without a designated detailing area, sending cars off-site is a logistical hassle and increases costs due to transport fees and delays. ODS brings detailing directly to your lot, saving time and reducing expenses. With no need to move cars to third-party facilities, you’ll see a faster turnaround and fewer expenses.
Today, dealerships must be nimble and proactive in adjusting to declining profits by eliminating expenses. By choosing ODS, you not only reduce the burden of fixed expenses but also gain a reliable partner to improve operational efficiency and speed up the sales process. ODS makes detailing an asset to your dealership’s profitability, not a costly overhead.
If your dealership is struggling with turnover, HR issues, production delays, or high in-house expenses, we can make an immediate difference. Reach out to us today to learn how ODS can deliver measurable cost savings while streamlining your make-ready and reconditioning process.