Hello and welcome to another video in our series “Winning with ProfitTime”

Now that you’ve completed your personalized training, you can use these videos to refresh your knowledge, dive deeper into a topic or teach others the basics of ProfitTime.

When it comes to mastering ProfitTime and variable management, it’s incredibly important that you have a solid understanding of some core values that are available in Provision and ProfitTime. In this video we’ll be going over Price to Market, Cost to Market, Price Rank/vRank and Market Days Supply. We’ll also dive into what “Adjusted” means, Overall vs. Like Mine Days Supply and how to read Market Days Supply Trends. Spend a few minutes with us and make sure you understand these key metrics so you can get the most out of your ProfitTime.

First off, let's discuss ranks. Price rank is simple. Take all the vehicles in your competitive set and stack rank them by price, then you have your price rank. But what role should a vehicle’s mileage play in its pricing? This is where vRank is a vital tool. vAuto is constantly calculating the dollar value of mileage as you configure your competitive market vehicles. vRank then simply applies that mileage bonus or penalty as appropriate. At first glance, a vehicle’s pure price rank may make you feel like you’re not priced competitively, but the vRank knows better. It can tell you how well you’re actually positioned in your market given your price AND your mileage. Then, as you continue to update your market, the Rank and vRank are updating automatically right along with you.

Next let’s talk about Price to Market, seen sometimes written as “% to Market” or the letters “PTM”, Price to market is simply how your price relates to the market average price and is represented as a percentage. On this percentage scale 100% is the market average. So however many percentage points above or below market average you are, the system reflects that by adding or subtracting it from 100.

For example, if you were priced at 5% below market average, it would read at 95%. 5% above market would read as 105%.

But what about Adjusted Price to Market? How does that work? You may have noticed the letters Adj. next to your Price to Market. These letters stand for Adjusted and indicate that your Price to Market is being adjusted based on the vehicle’s mileage. If that sounds similar to the vRank we just discussed, that’s because it is! Adjusted Price to Market is using that same mileage bonus or penalty to move percentage points as appropriate. This further ensures your vehicle’s pricing reflects the true market value. And just like with the ranks, changes made to price or market criteria will automatically update the % Price to Market.

Now that we’ve covered Price to Market, let’s take a look at Cost to Market or “CTM”. Cost to Market is a very important metric. This number, which is displayed as a percentage just like Price to Market, shows how well you own the vehicle against market average price. Please make sure you caught that: Cost to Market is your cost vs. your market’s average price. It is not comparing your cost to other vehicles' costs. This means that PTM and CTM are being calculated against the same market average price number. As an example, if the market average price were $10,000 and you owned the vehicle for $7000, your CTM would be 70%. Being aggressive with CTM during acquisition improves the quality of your investment and creates breathing room for pricing while still making gross. While you can’t change the cost of your vehicle in inventory, adjustments made to the market will automatically update the % CTM. And just like with PTM, the “Adj” indicates CTM is also being adjusted based on how your odometer compares to the market average miles.

Lastly, lets discuss Market Days Supply or MDS. Market Days Supply is sometimes confused with a “Days to Sell” number or Turn Rate. Neither of those are correct. Said plainly, Market Days Supply is a supply and demand number that says how many days it would take to sell all the vehicles in the current market if they continued to sell at the exact same rate. To do this vAuto calculates the daily sales rate based on the last 45 days and compares that to the number of vehicles currently in the market. Have a car with a low MDS? Typically this means the supply is pressured by the demand so the vehicle should do well. Have a car with a high MDS? It may take a more aggressive pricing strategy to move that vehicle.

But why are there two numbers and which should you focus on most? Oftentimes you’ll see MDS listed with an Overall and a Like Mine. Overall is simply based on YMM and is there to give you a broader view as well as a guide if Like Mine isn’t available. Like Mine on the other hand is specific to how you define the market. This is why as you update market options the Like Mine will change but Overall will stay the same. Typically you should focus on Like Mine as it is more specific to your vehicle, but having the Overall can be beneficial. One benefit to having Overall MDS is seeing market trends as they emerge. MDS numbers are calculated on a rolling 45 days, the market trend monitor (available only on Overall) also looks at what’s been happening in the last 14 days and alerts you to any sudden changes in YMM sale rate. Here you can see a down arrow telling you the market days supply may be making a shift downward. Clicking in you can see the 14 day sales rate is higher than the 45 day, causing the alert and letting you know action on this vehicle is heating up!

Thanks for spending just a few minutes getting to know this topic. As always you’re encouraged to reach out to your performance manager with any questions. Take care and happy hunting.