Stop Trusting 'Turn.' Watch Your 2-Week Sale Rate

Five things to take from this tip.

Inventory-tool turn is an average-age calculation. If the average age of your current stock is 30 days, the tool says you turn 12 times a year. Jasen spent a decade at one of those tools and routinely walked into 12-turn stores that were on pace to sell 75 of 100 units.

Two-week sale rate is your real pace. Units sold in the last 14 days, divided by units in stock, times two. That is the number that tells you whether you will sell 100% of your inventory this month, which Jasen says should be the goal.

A rolling 30 days hides a slowdown. On May 25 this store sold 83 units in two weeks with 144 in stock, a 58% sale rate and a pace of 166. By mid-June the pace was 164, nearly identical, but with 192 in stock the rate had fallen to 43%.

Fresh inventory flatters the wrong number. The 0 to 15 day bucket grew from 63 units to 93, pulling average age down to 21 days. Tool turn climbed from 14 to 17. Sold turn fell from 15 to 11. Same lot, same month.

Find the missing units in one bucket, then work the leads. The store was 14 units off pace. Jeeps alone were 15 heavy: 23 in stock, on pace to sell 8. Jasen's move is to attack the Jeep inventory and the Jeep leads together, starting with in-stock leads nobody has touched in seven days.

What Jasen covers in twelve minutes.

What the turn number in your inventory tool actually measures

Most inventory management tools show a turn metric on the dashboard, and most managers read it as a sales number. It is not. As Jasen explains, the major tools calculate turn from the average age of the inventory you have in stock right now. Average age of 30 days, the tool says 12 turns. Average age of 21 days, the tool says 17. Nothing in that formula involves a car leaving the lot.

Jasen worked for one of those tools for a decade, from the beginning, and he tells the story he saw over and over. A store shows 12 turns and carries 100 units. He asks if they are on pace to sell 100 this month. The answer is 75. The tool said they turned monthly. They were selling three quarters of it. If you want the full breakdown of the different turn formulas, see how to calculate turn rate.

Two-week sale rate, defined the way Jasen uses it

Jasen's replacement metric is simple. Count what you sold in the last two weeks. Divide by what you have in stock. If you carry 100 and sold 50 in the last 14 days, you are selling 50% of your inventory every two weeks, and at that pace you sell another 50 in the next two weeks. That is a 100% monthly sale rate, which is the goal he holds every store to. Sold turn, as LotWalk labels it, is that rate expressed as an annual turn number.

He also mentions a third figure, lot ready turn, which measures sales against the units actually photographed and ready for sale. A store with 100 units but only 80 fully photoed, selling 80 a month, has a 12 lot ready turn and a 10 sold turn. The gap is your transport and service pipeline. For a target, see used car turn goals.

The live store: turn up, sales down

The screen share is the heart of this tip. Jasen pulls up a real dealer's trend lines. The green line, inventory-tool turn, sat at 16 in late May, dipped to 14, then climbed to 17 through June. Looks like a store getting more efficient. The sold turn line went the other way, from 15 down to 11. Sales were trailing off while the tool reported improvement.

The explanation is in the first age bucket. Since early June the store had grown its 0 to 15 day inventory from 63 units to 93. Fifty fresh cars pulled the average age down to 21 days, and the tool rewarded them for it. But the cars were not selling by day 30. They were selling later in the cycle, and the fresh units were masking it.

All it tells you is whether you have clean inventory, which means you have a good aging policy. That's all it means.Jasen Rice, LotParty Quick Tip

Why a rolling 30 days lies to you too

This is where Jasen makes the case for two weeks over a rolling 30. On May 25, the store had sold 83 units in the prior two weeks with 144 in stock. Doubled, that is a pace of 166 and a two-week sale rate of 58%. A month later the pace was 164, only two units lower. Any rolling 30-day view would say nothing changed. But stock had grown to 192 units. The two-week sale rate was now 43%. The store was 14 units off pace in the two-week window, 28 for the month, and the rolling number was blending in the strong finish to May and hiding all of it.

Finding the 14 units

Knowing you are 14 off pace is only useful if you know where to look. Jasen's method is to isolate a bucket and run the same math on it. Jeeps at this store: 23 in stock, on pace to sell 8, which is 15 units heavy. There are your 14 units in one make. He finds the same story in 2022s, 2024s, cars over 25,000 miles, and the 31 to 45 day bucket (31 units, pace of 20, 10 off).

Then he goes after both sides. On the inventory side, photos, descriptions, and price relative to how the store sells Jeeps and how the market does. On the lead side, he pulls a 36-day-old lead on a Jeep still in stock that nobody has touched in seven days. The CRM cadence says old leads get a weekly touch. Jasen's view is that the lead is on a car you are heavy in, so the contact ratio goes up regardless of lead age. More often than not, he says, the sale rate problem is a lead management problem. That is the discipline behind a good weekly inventory meeting and follow-up tracking tied to cars in stock.

Three moves for Monday morning.

Run the two-week math before you open the inventory tool

Count units sold in the last 14 days. Divide by units in stock. Double it. That is your monthly pace and your sale rate. Compare it to your goal and write down how many units you are off. Do this every Monday and stop reading the turn tile as a sales number.

Isolate the bucket that holds the missing units

Run the same math by make, by model year, by mileage band, and by age bucket. The bucket with the biggest gap between stock and pace is where your off-pace units live. Jasen found 15 of a 14-unit gap in one make.

Call the in-stock leads on that bucket first

Pull every open lead on cars in the problem bucket that are still in stock, regardless of lead age, and raise the contact ratio this week. Then check photos, descriptions, and price on the units in that bucket with no leads at all.

Where LotWalk fits.

You can run this math on a whiteboard every Monday, and plenty of good stores do. LotWalk shows it live on the desktop Scoreboard, where Inventory Turn is broken into three numbers side by side (Avg Age Turn, Sold Turn, and LotReady Turn), so the gap Jasen shows in this video is visible every day instead of once a quarter. The At Risk view runs the sale rate by age bucket and by segment (Franchise, Non-Franchise, Trade, Purchase) against your monthly goal, and the Daily Action Plan turns the heavy bucket into the list of cars to work and leads to call.

Read the whole tip.

Show transcript (lightly edited for readability)

What "turn" in your inventory tool actually measures

Jasen Rice here with another LotParty Quick Tip. My subject today: stop looking at turn in your inventory management tool and start looking at your two-week sale rate. If you've watched any of my videos, I always talk about looking at two-week sold cycles instead of a rolling 30. Let me go over why looking at turn in your inventory tool could be throwing things off.

Just so you understand what the inventory management tools typically do, and I say typically because there are a dozen of them out there and I'm talking about the major ones: when you look at the turn metric inside your inventory management tool, it's typically based off the average age of your current inventory. The easy math is if the average age of your current inventory is 30 days, it's going to say you turn your inventory 12 times a year, because your average current inventory is only a month old. So you're assuming you turn your inventory every month. That's not the case.

When I worked for one of the inventory management tools for a decade, from the beginning, I'd go into dealerships where the turn was 12, 13, 14, 15. Say it was 12 for easy math and they're carrying 100 units. I'd walk in and ask, you guys on pace to sell 100? Oh no, we're on pace to sell 75. That didn't make sense, because the inventory tool was saying they turned their inventory 12 times, and they weren't. They were only selling 75% of their inventory.

You do this naturally by setting monthly goals. If your goal this month is to sell 100 cars and you look at what you're on pace for by the 19th and you're only on pace to sell 75, you know you're 25 units off pace. Your ultimate goal should be to sell 100% of your inventory. Dealers come to us when they struggle to sell 100% of their inventory, because we help them do that with gross profit. Average age of your current inventory is important, I get that, because you don't want an aging problem. But what you want to look at is your current sale rate, and calculate your turn that way.

Three turns on one screen: inventory, sold, and lot ready

I'm going to share my screen. In our system we actually have three different turns. I'll explain all three, but I'm really going to go over two. This is a live store. The green line is their inventory tool turn. May 20th they're at 16 turns, dropped down to 14 turns, and then since June 10th it's gone from 14 turns to 17 turns. Just looking at their current inventory and its average age, it's looking better. They're turning inventory more efficiently.

Now look at what we call the sold turn. Sold turn is: what are you carrying? Let's say 100. What have you sold in the last two weeks? 50. If you sold 50 in the last two weeks and stay at that pace, you should sell another 50 in the next two weeks. For a full four-week period, a month, you should be turning your inventory 100%. Back here their sold turn was at 15, but now it's trailing down to 11. Their sales are trailing down, yet their inventory turn is going up from 14 to 17. How does that happen?

The third one, the yellow line, is lot ready turn. Let's say I have 100 cars and I'm only on pace to sell 80. If I look at what's fully photoed and ready for sale, maybe only 80 of the 100 are ready. The other 20 are in transport, in service, whatever. I'm actually turning what's ready. If I've got 80 fully photoed and I'm selling 80, that's a 12 lot ready turn, but it might only be a 10 sold turn.

Why a rolling 30 days hides the problem

So how did their inventory tool turn go from 14 to 17? Their current in-stock average age is 21. If you look from June 9th, they went from 77 units in the first bucket to 93. Since June 3rd they went from 63 units 0 to 15 days old to 93. That brings down the average age of your current inventory, which looks good. The problem is they're not selling by day 30. They're selling later in the cycle.

Here's why you don't want to look at a rolling 30 days of sales, just the last two weeks. Go back to May 25th. They sold 83 units in two weeks. Times that by two and they're on pace to sell 166 units with 144 in stock. Follow the gray line, that's their sold percentage. They were selling 58% of their inventory in two weeks. Now they're only selling 43%. They're still on pace to sell 164, only two units off the earlier pace, but they've added 50 more units. They had 144 units. Now they have 192.

This is why you don't want a rolling 30 days. Thirty days ago the sale rate was great. I was on pace to sell 166, I'm on pace to sell 164, everything looks great. No. You've added more inventory. What percentage of your inventory are you selling in a two-week window? They're only selling 43%. They are 14 units off pace in that two-week window, so 28 units off pace for the month. If I roll back 30 days, it grabs some of that strong finish to May, when they sold more with less inventory, and it makes me look like I'm doing a great job now when I'm not, because I've added 50 more units. And by adding 50 fresh units I brought my average age down, which makes the turn in my inventory tool look better, like we're doing a better job. It's very misleading. You can't get tied up in that.

Find the 14 units: isolate the problem, then attack it

You're 14 units off pace. You need to find those 14 units. How do you do that now? Would you go into your inventory tool, sort oldest to newest, highest price to market, lowest price to market, and start making adjustments? Maybe attack the ones without leads, or the ones not converting online? Those are ways to do it. But we like isolating issues and attacking those issues.

Let's isolate some issues this dealer has. Jeeps. They're 15 units off pace on Jeeps. If I'm 14 units off pace, I can find 15 of them right here. They've got 23 in stock and they're only on pace to sell eight, which makes them 15 units heavy in Jeeps.

So stop looking only at your inventory management turn, because it's misleading. Look at your two-week sold percentage. This dealer is a perfect example. Selling 166, on pace for 164, looks good. No. They've added 50 more units. They're selling late in the cycle. They've got a 21 day average age inventory, but it's selling at 30. They're almost at that 12 real turn, but they're 14 units off pace.

That's what we do a little differently at Lotpop with LotWalk: isolate the problem and attack it. What's my problem? Jeeps. Let's go attack it. And not just the inventory. It might not be the inventory that's the issue. We need the leads on our Jeeps. Why don't we increase the contact ratio on our Jeep leads? Here's a 36 day old lead, the car's still in stock, and we haven't reached out in seven days. Why? The CRM will say, it's a 36 day old lead, we only reach out to those about once a week. We don't know where the customer is in their buying cycle. They're on a car still in inventory. I'm not selling enough Jeeps. Why don't I call my Jeep leads, especially the ones where the car is still in stock, and increase my contact ratio there?

Isolate a problem, Jeeps, then attack both the inventory of those Jeeps and the leads on those Jeeps. More times than not it's a lead management problem. One, the in-stock leads on those Jeeps aren't being followed up consistently enough to get the sale rate back up. Two, we probably have a lot of Jeeps with no leads at all. Once a car doesn't have leads, how are the photos? How are the descriptions? Then how does my price match up to how I sell Jeeps, and then how does my price compare to other Jeeps in the market? It's a combination of things.

Figure out if you're on pace or not. If not, figure out how many units you're off pace. Then isolate the particular issues slowing you down. I picked on Jeeps for this store, but I don't care if they're selling 100% of their inventory a month, you'll find issues. They've got an issue with 2022s. They've got an issue with 2024s, or cars with 25,000 miles or higher. My 31 to 45 age bucket: I've got 31 units and I'm only on pace to sell 20. I'm 10 units off pace. I can find my 14 units there.

Turn tells you about your aging policy, not your sales

Not necessarily stop looking at the turn in your inventory tool. Just understand it's based on the average age of your current inventory. It has nothing to do with your sales, nothing to do with the average age of what you sold. All it tells you is whether you have clean inventory, which means you have a good aging policy. That's all it means. You could be wholesaling stuff and blowing it out at day 50 and losing gross.

Look at your two-week sold percentage. Whatever you're off pace, find those holes. And if you're above pace, there are still holes. I could show you dealers selling 120% of their inventory who still have a problem with Jeeps, or 2022s, or their 31 to 45 age bucket, or purchases versus trade-ins, or franchise versus non-franchise. Find a problem, isolate it, then attack both the leads and the inventory to get that sale rate back up.

Hope this tip was helpful. Dealers come to us when they're struggling to sell 100% of their inventory with gross profit, and we're the only ones out here combining both: isolating those issues, pointing them out, and helping manage both the lead side and the inventory side. If you'd like a demo, go to lotwalk.com. Have a great weekend.

Transcript lightly edited for readability from the live stream. Watch the video above for Jasen's screen share.

Questions dealers ask about turn and sale rate.

How do you calculate a two-week sale rate for used car inventory?

Count the units you sold in the last 14 days and divide by the units you currently have in stock. Double the result for your monthly pace. If you carry 100 units and sold 50 in the last two weeks, your two-week sale rate is 50% and you are on pace to sell 100% of your inventory this month. Jasen recommends running this every week rather than looking at a rolling 30 days.

What does turn mean in an inventory management tool?

In most inventory tools, turn is calculated from the average age of the inventory you have in stock right now, not from what you sold. An average age of 30 days shows as 12 turns, an average age of 21 days shows as roughly 17. It tells you whether your aging policy is keeping the lot clean. It does not tell you whether you are selling your inventory, which is why a store can show 12 turns while only selling 75% of its cars.

Why shouldn't I use a rolling 30 days of sales to measure pace?

Because a rolling 30 blends a strong two weeks with a weak two weeks and hides the change. In Jasen's live example, a store's monthly pace went from 166 to 164, which looks flat, but stock had grown from 144 to 192 units. The two-week sale rate had dropped from 58% to 43%, leaving the store 14 units off pace in the current window. Only the two-week view showed it.

What should I do when my store is off pace for the month?

First, put a number on it: how many units short. Then run the same two-week math on smaller buckets (make, model year, mileage band, age bucket) until you find where the gap lives. In the video, a 14-unit gap showed up as 15 heavy units in one make. Attack that bucket on both sides: raise the contact ratio on open leads for cars in that bucket that are still in stock, and fix photos, descriptions, and price on the ones with no leads.

Why is your inventory "turn" going up while sales go down?

Five things to take from this tip.

What Jasen covers in twelve minutes.

What the turn number in your inventory tool actually measures

Two-week sale rate, defined the way Jasen uses it

The live store: turn up, sales down

Why a rolling 30 days lies to you too

Finding the 14 units

Three moves for Monday morning.

Run the two-week math before you open the inventory tool

Isolate the bucket that holds the missing units

Call the in-stock leads on that bucket first

Where LotWalk fits.

Read the whole tip.

What "turn" in your inventory tool actually measures

Three turns on one screen: inventory, sold, and lot ready

Why a rolling 30 days hides the problem

Find the 14 units: isolate the problem, then attack it

Turn tells you about your aging policy, not your sales

Questions dealers ask about turn and sale rate.

More Quick Tips

Why does a used car that sits cost you $1,000 every two weeks?

You manage age buckets. What about the other five?

Aged inventory does not start at day 60. It starts in the middle bucket.

Want someone to walk your lot with you?