Where to Cut Costs and Make Investments in Turbulent Times
5/23/2025Whether you're running a single-location dealership or managing a multi-store enterprise, the current economic climate presents new challenges seemingly every few days. Tariffs, softening commodity prices, rising floorplan interest rates, and tightening customer demand are squeezing margins across the board and causing dealers to start looking for areas to tighten their belts and cut unnecessary costs.
But cutting costs shouldn’t mean scaling back on service or sales performance. Instead, the most resilient dealerships are investing strategically right now – streamlining operations, controlling overhead, and making informed decisions using data. Let’s look at some key areas where dealership leaders can invest to reduce expenses, maximize ROI, and maintain a strong competitive edge, even (and especially) in uncertain times.
Make yourself better to make yourself ready – Maximizing efficiencies in sales operations
Sales processes are often full of hidden inefficiencies, especially when processes are inconsistent across the team. One highly impactful investment a dealership can make is to tighten up its sales systems and reduce the administrative burden on sales managers and reps.
Many dealers are still relying on trusted spreadsheets or outdated systems to manage customer info, sales, and leads. Veteran dealer consultant George Keen of Wise Wolf Consulting notes that, while Excel spreadsheets are handy, “there are many dealers out there who are not using all the features in the DMS…If you're just entrenched in a spreadsheet, you are missing visibility of that information in the rest of your company.” Lack of integration between tools creates friction, as well as lost opportunities.
Modern dealer CRMs tie all the threads of your sales operations together, even making a DMS’s data more actionable, by centralizing activity, automating task management, and improving internal transparency, even across sales, service, and other departments.
And the benefits of using integrated systems extend beyond just increased efficiency. Former CEO of Greenmark Equipment Jeff Oldham (now CEO of Groff Tractor) explains how his organization began using behavioral profiling tools like DISC assessments to better understand their top-performing salespeople. “We started profiling every salesperson, analyzing the data that said who was a really good salesman…It helped us see who we really wanted to lean into.” Sales process optimization doesn’t just save money – it enables smarter talent development, which is crucial to any dealership’s long-term success plan.
Recommended strategies:
- Establish standardized workflows for all sales team members to eliminate redundancy and confusion.
- Use a CRM and sales operations platform to automate follow-ups, assign leads, and track deal progress.
- Monitor performance analytics to guide your coaching, hiring, and future sales strategies.
Spend money now to increase margins later – Lowering inventory costs
Inventory can quietly drain cash flow when not managed with accuracy. Many dealers hold on to aged equipment for too long or fail to adjust pricing based on changing market conditions. In high-interest environments, that holding cost adds up quickly.
Former VP of Asset Management at Hutson Inc. Duane Kautzman reminds used equipment managers to be bold when it comes to repricing. “Don’t be afraid to move things from an inventory standpoint…you’re paying seven to eight percent interest on this stuff in most cases, and the cost starts adding up very quickly.” The solution isn’t always to hold less but to move it more efficiently.
One way to get ahead of stagnant listings is to establish a cadence for your internal inventory reviews (e.g., 30-, 60-, or 90-day pricing audits). And to reprice effectively, you’ll need access to current equipment valuation data, including auction results and retail pricing trends, to understand how your equipment and pricing compares regionally and nationally. By aligning pricing with market demand, dealers can accelerate turnover and avoid long floorplan exposure. Inventory comps and pricing tools also help inform smarter buying decisions, reducing the risk of overstocking the wrong categories.
Recommended strategies:
- Put into practice regular inventory review processes to proactively adjust pricing.
- Invest in data tools that provide real-time dealer and auction value benchmarks.
- Align purchasing decisions with customer demand and margin potential, not gut instinct.
Streamline and automate the back office – Controlling your overhead costs
Operational costs are often overlooked during busy sales seasons, but even small inefficiencies in the back office can snowball. From outdated paperwork systems to redundant data entry, the administrative side of the business is ripe for optimization. And a down market can be an ideal time to start making these improvements.
In this area as well, integrated CRMs and automation tools can reduce the burden on sales and support staff. By automating repetitive workflows (whether that’s sales documentation, service logs, or pricing requests), dealerships can reduce errors and redundant inputs, and maybe even avoid hiring additional admin support.
Similarly, digital tools that replace physical paperwork and disconnected spreadsheets can cut costs associated with storage, printing, and manual labor. “Think about if I could do a quarter more of the work with the same people that I have,” says Duane Kautzman. “You save on employees, but you put those funds back into a system.”
Recommended strategies:
- Automate repetitive admin tasks like customer communications, report generation, and document handling.
- Use digital platforms that integrate sales, service, and accounting workflows to eliminate double entry.
- Audit your current processes for redundancy and low-value steps that could be outsourced or automated.
Invest where you can save and where you can scale
During uncertain times, savvy dealerships don’t freeze – they focus. Instead of across-the-board cost-cutting, they reinvest in technology and processes that give them leverage. Whether it’s sales automation, better inventory management, or a more integrated back office, the goal is to reduce waste, boost efficiency, and position the business for long-term success. After all, the market will eventually pick back up, and you need to be ready to meet the moment and emerge more competitive when it does.
If you're ready to reduce costs and improve efficiency across your inventory and sales operations, consider exploring the solutions trusted by many of today’s top-performing dealerships.
Request a demo to see how Tractor Zoom’s Anvil Pro (dealer intelligence platform) and Tractor Zoom Pro (inventory pricing and market intelligence) solutions can help your team operate leaner, smarter, and more profitably, regardless of what the market throws your way.