Wholesale Forecast Calculations

Calculating wholesale accurately is essential to running a smooth operation. Taking too much allocation in wholesale can negatively impact your flooring costs, while taking too little can limit your sales. And because Ford bases its allocation formula on both sales and availability, mismanaging wholesale will directly affect your ability to grow and earn more allocation in the future.

That is why having a clear plan before entering wholesale is critical for dealership success. In this article, we will walk through the process we use to determine how much wholesale inventory our dealers should take, using a simple, proven formula.

Wholesale Forecast Equation

What you’ll need

Starting Availability—The total available stock units per vehicle line, including FCTP.

eCommitment displays your availability across all statuses, including remaining allocation; however, it does not include FCTP, so those units need to be added by you separately.

Average Monthly Sales Rate—The rolling 12-month sales pace per vehicle line.

eCommitment provides your monthly sales history by vehicle line; use it to calculate the average, then adjust up or down to account for your recent trends.

Target Days of Supply—The number of days of supply you aim to maintain on your lot.

A common benchmark is a 90-day supply. Multiply your average monthly sales rate by three when targeting 90 days to determine your target inventory level for any vehicle line.

Production Month—The production month Ford is wholesaling for each vehicle line.

• Regional wholesale calls and emails provide this information.

Production to Delivery—The time it takes each vehicle line to go from production to your dealership.

• Most dealers assume 30 days from production to arrival and plan for an additional month (e.g., April production forecasted through May). However, most vehicle lines arrive in less than a month, with some reaching dealers in as little as two weeks.

We have calculated the typical timing for each Region by vehicle line, allowing you to create a more precise sales forecast — see the chart below.

What you will calculate

Calculating a forecast is simple—Starting availability less your sales equals your end stock. How short that is from your desired supply is the allocation you need in wholesale. How you get those numbers is where the variability comes in.

Quick Example

Today is February 24. We are in the March wholesale for May production. Dealer A in the Cincinnati region has 20 Bronco Sports available and sells an average of 3.4 per month. With a 21-day production-to-delivery timeline, these units will arrive around June 21. By then, the dealer will have sold approximately 3.9 months of inventory, or about 13 units, leaving 7 Bronco Sports on the lot if no additional units are accepted in this wholesale. To maintain a 90-day supply (10 units), the dealer needs to take 3 Bronco Sports in this wholesale.

Summary

You do not have to go into wholesale blindly. By using data you already have access to—such as availability, average monthly sales rate, and target days’ supply—you can approach wholesale with a clear understanding of what your dealership needs. This allows you to secure the right amount units, helping control costs while maximizing sales.

Dealerships that work with Precision get access to a report that forecasts sales and automatically calculates Wholesale numbers for each vehicle line based on their target days of supply. The Wholesale Guide Report is emailed to dealers monthly ahead of Wholesale and is also available on the PIM Portal.

If you want help in calculating wholesale, ordering the right vehicles to your lot, and on ground management support, book your demo today.