Wow! Congratulations on your awesome Velocity performance. First, I'm glad to hear that the new VIN scan is working well. We've gotten a lot of good feedback, and I want you to know that we are continuing work to make it even better in the future.

I'm also very appreciative of the fact that you're tuned into our Knowledge Network. I created this tool just for this reason. I think it's very important that Velocity dealers share knowledge and learn from each other's successes and challenges.

I’m not 100% sure that I understand your question, but I think it's about why the top performers are in fact top performers with higher price-to-market and higher market-day-supply cars. If this is the question that you're asking, it's really a good one and I'm not exactly sure of the answer. One would assume that it would take more aggressive pricing on higher market day's supply cars to be a top performer. Please confirm that this is in fact the question and allow me a little bit of time to dig into it.

I can tell you that our industry is experiencing tremendous pain from gross compression. Over the past 24 months, wholesale prices have risen much faster than have retail prices. To this extent, you're not suffering alone. Keep in mind however, if average margins are shrinking, and they are, the only thing that a dealer can do to overcome the problem is to do it more often. In other words, you must go from money to metal, money to metal, money to metal more times in a year to compensate for the margin compression.

Fortunately for you and other Velocity dealers, the natural reaction of traditional dealers is to raise their prices to counteract the margin compression. This in fact is exactly the wrong thing to do. It's like shutting off oxygen to a patient. You're handing over after-tax profit dollars to on-line classified sites to send a message to your market that you're competitors vehicles are more worthy of consideration. You might as well be sending $100 bills to your competitors, it will be a lot cheaper and no less effective.

As you noted, the smart move is to price in the sweet spot in the market and then fight the good gross battle once the customer arrives in the showroom. Recently I conducted a webinar that can now be viewed from our website which outlines 4 very effective techniques for holding gross profit in the showroom. If you haven't seen this, I would encourage you to view it and implement the practices.

Please continue to communicate with me and let me know of your success and challenges. I will look into your questions and respond with more insight soon.

Thanks, and again, congratulations.

Dale