When his father’s Moosup, Conn., Chrysler-Dodge-Jeep-Chevrolet dealership shut down in early 2009, Ellis Disch saw a promising business opportunity.
The store had to unload its new-vehicle inventory quickly, and the factories’ vehicle locator systems lacked a way for dealers to post vehicles for sale.
Disch, 32, launched Ideal Inventory Solutions, a Web site that makes vehicle swaps among dealers easier. It’s an online venue that allows dealers to purchase and wholesale new vehicle inventory anonymously. More than a year later, his business is growing rapidly.
“We can help reallocate vehicles to other dealers faster than the factory can,” he says. “We’re not miracle workers, but some vehicles have sold within a few hours.”
Disch and other vehicle brokers are exploiting an industry tension point: In an era of tight inventory, dealers say they need a faster, more efficient vehicle allocation system.
The factories are working on improvements, but the efficiencies are coming slowly. There commonly is a two- to three-month gap between vehicle order and delivery. And dealers say manufacturers check their inventory levels just once or twice a month.
Often, dealers say they don’t get the inventory they need -- or they don’t receive it fast enough. They may have to trade with other dealers so that their stock better matches local demand.
Some dealers surveyed by Automotive News report an increase in the amount of calls they receive from middlemen seeking to arrange swaps for a fee. Even some small-town dealers are getting several calls per day.
Ideal Inventory Solutions, currently available only to GM dealers, charges a flat fee of $199 per vehicle. The company recently added capability to swap allocation before the vehicles arrive on lots.
“Our dealers are better able to balance their inventories with units built to their specifications,” Disch says.
The online broker has five field representatives servicing 310 franchises in 19 states. He plans to expand the service to other makes soon, possibly starting with Chrysler. “As inventory gets tighter, dealers have to have a way to manage their inventory,” Disch says. “Dealers are frustrated.”