One effective and low-cost way to reduce some of your overhead expenses can be as simple as sending a short letter to all of the dealership’s vendors asking for cost concessions. A copy of a sample letter that we have successfully used with some of our dealer-clients is below.

Dear Valued Provider,

As we enter the new year, we would like to take this opportunity to thank you for the goods and/or services that you provide to our business. During the course of any given month, it takes well over one hundred different businesses working in unison to provide our customers with what we consider to be a world class buying and ownership experience.

Every year, in an effort to remain competitive, we are forced to examine and adjust margins and pricing. Given the current economic climate and rather than simply press those increases downward to our customers, we must ask our goods and services providers to shoulder some of that burden.

Rather than go though the arduous and time consuming task of re-bidding each of our goods and services, I would ask that each of our current providers make a unilateral reduction in their pricing of 10%. With the understanding that each of our providers operates under a unique business model any concession in pricing will be greatly appreciated.

Please respond, in writing, to the request within the next 30 business days. In your response, please indicate one of the following:

If you are willing to provide the requested 10% reduction,
If you are willing to provide any reduction and be included in a closed bid,
If you are not willing, or able, to provide any reduction.

Please immediately reflect the reduction (10% or your designated percentage) on your next invoice.