Making the most of a commercial opportunity

Nearly 39% of retailers see commercial vehicles as a major opportunity for growth in 2012, second only to cars over three years old according to the new grs survey results.

David Grice, Sales Director at grs, agrees with this assessment, but cautions retailers to choose commercial vehicles with the same care as they do cars. He believes the main opportunities this year lie with small commercial vehicles.

“Businesses looking to economise by downsizing their vans may move from a long wheel base to a short wheel base,” he says, “while people setting up on their own will normally opt for small or mid-sized vehicles – which are also most likely to appeal to retailers who want to place a van on their forecourt alongside cars.”

Those retailers looking to broaden their stock mix with the addition of commercial vehicles should make their purchases based on the following criteria, which are David’s three golden rules:

1. Condition: “Just like cars, vans need to be good quality and prepared to a high standard. People are far more choosey nowadays and commercials not in such a good condition or with damage just won’t attract the same premium or interest,” he says. “Also, when commercial vehicles are sharing forecourt space with cars, they need to be up to the same high standards.”
2. Mileage:  this is just as important for vans as it is for cars, especially when retailers are looking to compete with commercial specialists. “Rather than trying to compete on price alone, it’s important to have an edge, and this is where mileage can help. Just like a car, buying a van is a major investment. Unlike a car, a van is a tool to make money, so it’s important that people get it right.”
3. Offer something different: many businesses will be looking for a specific type of vehicle – such as a Luton or drop-side van – or something that helps them stand out from the crowd, such as colour. “Business buyers today may well not be your traditional white van drivers, so consider stocking a blue VW Transporter or a red Vauxhall Combo, for example,” says David.

For those retailers yet to stock their first commercial vehicle, the grs team is on hand to advise them every step of the way. “A potential customer looking for their first van may well be nervous, and buying from a traditional car retailer will give them confidence,” continues David. “It’s definitely something worth considering this year.”

If you would like to speak to grs about any aspect of buying a commercial vehicle, contact us on 01743 281818. 

Opportunity still knocking as retailers remain upbeat about the year ahead – new survey results

Despite stories of the economic gloom continuing to dominate the headlines, many car retailers across the UK are optimistic about the prospects for their businesses in 2012, according to the results of a new grs survey.

Nearly a quarter (23%) of retailers completing the online survey are more upbeat than they were at the start of 2011, with more than a third (38%) believing the outlook is just as good as it was 12 months ago. In contrast, just 39% of all those questioned are less optimistic about the year ahead.

While such optimism may at first glance seem surprising, it chimes with the views of grs Managing Director Theo Kortland, who believes the key is to adapt to the challenging conditions. “Without doubt, there’s still a market. People still need their cars to get to work, go shopping or take the children to school. That hasn’t changed,” says Theo.

“They may take the car out less frequently and drive fewer miles, but people are continuing to drive and will look to replace their cars too,” he continues. “Nowadays they may look for something smaller and more economical, and that may well be their motivation to buy another car, to keep costs down and save money in the long-run. In turn, that can be an opportunity for retailers to tap into.”

Moving on to the main opportunities for growth in the year ahead, the survey results reinforced the sense of cautious optimism, with a quarter (26%) of retailers identifying cars between 12 and 18 months’ old, while more than a third (38%) cited those aged between 18 months and three years. Interestingly, 29% believe commercial vehicles will present the greatest opportunities in 2012, highlighting just how many are adapting their businesses to the changing conditions. 

“The message for all of us is clear,” continues Theo. “We shouldn’t be spending our time worrying about things we can’t control and over which we have no influence, such as inflation, the cost of petrol or the broader economic conditions. Instead we need to channel our energy into getting our offer right, and then shouting about it to make sure everyone knows.”

Theo believes that having some older vehicles on the forecourt will have a role to play in tempting potential buyers in, they should only be seen as part of the solution. “As every retailer knows, footfall is important and it’s essential to create a proposition that’s sufficiently attractive to encourage people to take a look.

Tapping into New Markets

The global recession of the past few years and the continuing uncertainty caused by the UK’s faltering return to growth, have changed the way that people buy everything from everyday essentials to big ticket items such as cars. Businesses have had to face up to the new economic realities, not only reviewing their own business practices but also adapting to the new buying habits of their customers.

Just like every other industry and business sector, vehicle re-marketing is changing, with many vendors such as rental and contract hire companies adapting their de-fleeting cycles as a result. At the same time car retailers large and small have been reviewing their stock requirements as the needs and spending power of their own customers have changed.

“The market may well be different now but that doesn’t mean there isn’t a solution that meets the needs of vendors and retailers alike – and that’s where we can help,” explains David Grice, grs Procurement Director. “Because we sell vehicles to a network of 6,500 franchised and independent retailers across the country and understand precisely what their requirements are, we can use this knowledge to find solutions for vendors.

“In other words, we use our up-to-the minute industry expertise and extensive database to find a market for vendors’ vehicles which matches the prevailing market conditions.”

One example of this is the way in which many leasing and hire companies are making their existing stock work harder for them by extending their de-fleet cycle from the traditional six or 12 months to 18 months or more. While this makes good financial sense during the lifecycle of the vehicles, at face value this could present more of a challenge when it comes to disposal. However, grs has been able to identify, and tap into, a growing market for vehicles of this age, as retailers too adapt to the market conditions.

“What retailers are telling us is that many of their own customers’ needs have changed,” says David. “Whereas in the past they may have bought a six or 12-month old vehicle, they’re now looking for one that’s around 18 months old instead. What hasn’t changed is the need for good quality, low or average mileage vehicles, but many people are looking to spend a bit less than they may have done pre-recession.”

Continues David: “Our unique relationship with retailers has enabled us to present this opportunity to vendors, while our Cold Meece logistics centre enables us to store up to 4,500 vehicles at any one time. Combine these two elements together and it means we not only have the capacity but also the appetite to buy vehicles all year round, to ensure a continual supply to our retail customers.”

Spotlight on...the grs logistics team

For busy retailers replenishing their forecourt with new stock, buying vehicles can often be hard enough – without the logistical challenge and additional time required to arrange for them to be shipped to their premises.
“We can take the problem away from retailers, freeing them up to focus on what really matters – running their businesses,” says Andy Bourne, Logistics Co-ordinator at grs. “Our aim is to make buying trade vehicles as easy as possible, and that extends past the actual purchase, to the transportation of the vehicles to their final destination.
“Retailers don’t need the extra hassle of arranging for their vehicles to be moved in addition to everything else,” continues Andy, adding that in addition to efficiency, speed is also of the essence. “Once a vehicle’s been paid for, the retailer needs to get it on site, prepped and on sale as quickly as possible. We understand those pressures and have the know-how, people and equipment to help.”
Aiming to deliver anywhere within mainland Britain within two working days, and within five working days to Northern Ireland is the main objective for both Andy and his colleague Miranda Coombes, and vehicles can either be driven to their destination under trade plates or on transporters, depending on the number of vehicles purchased at one time.
Up to three vehicles tend to be trade plate driven, while a transporter normally becomes the most cost-effective option when four or more have been bought at the same time. grs operates a clear and transparent pricing structure based on the delivery distance, enabling retailers to see exactly how much it will cost.
“On a busy day, it’s not uncommon for up to 40 transporters to arrive at our Cold Meece logistics centre either delivering or loading up and heading off to all parts of the country,” says Andy. “We always plan ahead to ensure that vehicles can be collected as quickly as possible, and it all works like clockwork thanks to the market-leading systems and processes we employ there.”
To help ensure grs is able to deliver on its two working days promise, its trade plate drivers and transporter partners undergo a rigorous selection process. “It’s essential that they sign up to our way of doing things in terms of speed, care and courtesy, since they have an important customer-facing role.”
Once loaded up, the drivers regularly deliver down to the south east, south coast, to the south west and Wales, and as far north as Aberdeen and Ullapool, with the vehicles remaining the responsibility of grs right up to the point of arrival, giving retailers valuable peace of mind.
“Our aim is to make life as easy as possible for retailers, and the logistics side of our business is an important part of that,” concludes Andy.

A day in the life of...Andy Lowe, Contract Manager

“What vendors really appreciate is that grs buys cars all year round, not on a seasonal basis or when it suits us, but month in, month out,” says Andy Lowe, arriving back at base in Shrewsbury after visiting one of his clients – a car rental company. “That’s one of the things that really sets us apart.”
Another important factor is flexibility, with grs happy to work with vendors in the way that best suits their business model, including outright purchase, residual value underwriting and acting as an agent to sell vehicles on their behalf to a network of more than 13,000 franchised and independent retailers the length and breadth of the country.
“It’s so important for me to visit vendors on a regular basis for a a catch-up. It’s a chance to discuss what they have coming up for sale and how they’d like to work with us to sell those vehicles,” continues Andy, who places great value on the relationships he is able to build with his customers.
“It’s not just the fact that we buy vehicles, it’s the way that we do it that’s important too. People buy from people, and we’re a relationship business as much as a car buying business, so it’s important to get that right.”
He continues: “We pride ourselves on being good people to do business with. We treat people the way we want to be treated ourselves, and that’s why we always pay for vehicles promptly and always do what we say we’re going to do, as trust is so important.”
Following his first meeting of the day, Andy dropped in to see another vendor – a contract hire company – to pick up some vehicle logbooks before dropping in to see a retailer on his way back to Shrewsbury. “It’s essential for me to understand their perspective and take on the market too,” he says, “as sharing our market intelligence with vendors is also important.”
From time to time, he will also arrange to show a vendor around the company’s logistics centre at Cold Meece in Staffordshire – a purpose-built location which brings to life the scale and sophistication of the grs operation. “As soon as people see Cold Meece they understand how we have the capacity to de-fleet and re-market their vehicles so quickly and efficiently,” he says. “As well as being able to store 4,500 vehicles safely and securely at any one time, the bespoke systems and processes in place at Cold Meece are extremely impressive, while the site also includes our new high quality photographic centre with a 360-degree turntable.”

The remainder of Andy’s time is spent striving for perfection. “I’m forever checking stock and making sure we have all the necessary service histories, keys and documentation we need to sell vehicles quickly for vendors, because that’s what it’s all about for us – making vehicle re-marketing as easy as possible.”

Avoid the car buying lottery with grs

When is £8,000 not £8,000? It may sound like the start of a joke, but buying a car only to find additional and unexpected fees and costs mounting up is no laughing matter.
“Buying a car can be a bit of a gamble, or even a lottery,” says Dean Richards, grs Sales Manager. “The price under the hammer isn’t necessarily the price you end up paying, and lots of seemingly small additional fees and charges can really start to add up, which isn’t helpful in the current climate.”
According to Dean, increasing numbers of retailers are reporting that on top of a vehicle’s purchase price, they are being charged additionally for having documents or spare keys sent out to them, while fees are also being levied based on the vehicle’s price or even its engine size.
To make matters worse, the car buying lottery often dictates that the likes of spare keys and service histories may or may not be available with the vehicle depending on your luck, while a close inspection may reveal damage that needs to be fixed before it can be made ready for sale. Add to this the cost of a tank of petrol or diesel to drive it back to the forecourt and a seemingly healthy profit margin can start being seriously squeezed.
Not so when buying from grs, where £8,000 really is £8,000. “The price retailers pay is the price they pay, it’s as straightforward as that,” continues Dean. “We don’t charge any fees and we’re always clear from the outset whether a vehicle has a spare key and a full service history. When people buy from us they can be confident that the vehicle will be just as described and that there won’t be any unexpected fees or charges.”
Vehicle descriptions at grs are second to none, since retailers can view vehicles online where detailed information is accompanied by market-leading interior and exterior photographs taken at the purpose-built photographic suite at the Cold Meece logistics centre.
“There are no joining fees, no unexpected fees and no appointments required, as retailers can view all our vehicles online 24 hours a day,” says Dean adding that the market knowledge of the grs team also comes without charge – another rarity in today’s market place.
Continues Dean: “Our account managers are talking to people in the industry every day, so they know what’s selling well and where the opportunities lie. We’re always happy to share our knowledge with retailers and to work in partnership to grow their businesses. No fees and free market insight – we can’t say fairer than that!”

Driving profit with commercial vehicles

With commercial vehicles offering retailers a valuable additional income stream, it is often only a fear of the unknown preventing many more from benefiting, according to David Fildes, Commercial Vehicle Specialist at grs.

“Demand for good quality commercial vehicles has been consistently strong over the past year and we believe this trend is set to continue,” says David, adding that a corresponding shortage of stock is helping to keep margins high.
“It’s still a tough and challenging environment for most retailers at the moment, so good news is always welcome. The high demand for commercial vehicles and the price they’re commanding is one such positive area, though there is definitely an emphasis on quality, particularly good condition, low mileage and late plates,” he continues.
“We talk to retailers every day of the week, and many are telling us that potential customers are regularly asking them if they can supply commercial vehicles, ranging from small car-derived vans to the mid-sized vehicles – such as the Ford Transit and Vauxhall Vivaro – and even pick-up trucks.”
And with summer already a distant memory, many traders will be thinking about upgrading their vehicle to get them through the coming winter months and beyond.
So with demand high and good margins to be had, what’s stopping more retailers from putting a tentative toe into the commercial water? “Like anything, it’s likely to be a fear of the unknown,” says David. “Retailers who haven’t previously stocked commercial vehicles will be unsure about their prospects, especially in today’s uncertain economic climate.
“However, the demand is there and we know from experience that any retailer can sell a commercial vehicle. What’s more, when buying from grs they can be assured of the same quality and service as they receive when buying cars – so that’s another reason to be confident,” he continues.
Indeed, grs has extended its market-leading photography to commercial vehicles and has recently started including images of both domestic and commercial vehicles within its weekly stock lists, as the company maintains its focus on making life as easy as possible for retailers to sell more vehicles.
Says David Fildes: “The ability to click and see is proving popular, especially when coupled with the high quality images available online and the fact that retailers can effectively use our stock as their own, which is completely risk-free for them.”
Yet the grs offer goes further still, and in addition to convenience and consistency, retailers of any size can also benefit from the expertise of the grs team.
Concludes David: “We can advise retailers on what’s selling well. We don’t charge for this advice – it’s all part of the service we provide. We want to work in partnership with retailers to help them maximise every opportunity. After all, if they’re successful then so are we!”