Retail floorplan: Difference between revisions
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'''Retail floor planning''' is a type of short term [[loan]]s used by retailers to purchase |
'''Retail floor planning''' (also referred to as floorplanning or inventory financing) is a type of short term [[loan]]s used by retailers to purchase high-cost inventory such as [[automobile]]s. These loans are often secured by the inventory purchased as [[collateral (finance)|collateral]].<ref>http://theciada.com/wp-content/uploads/2012/08/State-Association-Floorplan-Training-Deck_Final-2012.pdf</ref> |
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Floor planning is commonly used in new and used car dealerships.<ref>http://www.sba.gov/content/what-floor-plan-financing</ref> Contrary to common perceptions, most car dealers do not own the vehicles on their lot. Even smaller dealerships can have an inventory of vehicles representing millions of dollars of [[capital investment]]. |
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Floor planning is commonly used in new and used car dealerships.<ref>[http://www.jdpa.com/studies_jdpower/pressrelease3.asp?ID=2005074 J.D. Power and Associates | Press Pass | Press Releases<!-- Bot generated title -->]</ref> Few dealers own the vehicles on their lots, most are floor planned by a bank or by the manufacturer such as General Motors Acceptance Corp. Floor planning costs can run into hundreds of thousands of dollars a month for a big multi-location dealer with large inventories.<ref>{{cite journal |title=How To Buy A New Car |journal=[[Popular Mechanics]] |date=October 2001 |url=http://www.popularmechanics.com/automotive/new_cars/1269781.html?page=4 |accessdate=2007-10-31 |publisher=Hearst Communications}}</ref> |
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Most car dealerships floor plan their vehicles, and factor the cost of financing inventory into their sale price. This also creates incentive for the dealers to turn around vehicles as quickly as possible. Floor planning costs can run into hundreds of thousands of dollars a month for a big multi-location dealer with large inventories.<ref>http://www.autodealermonthly.com/51/2358/ARTICLE/Taming-The-Floor-Plan-Monster.aspx</ref> |
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In the case of new vehicles, they are generally floor planned by the manufacturer, such as General Motors Acceptance Corp, or [[GMAC]]. With used car dealers, there are a number of specialty finance companies that cater to their industry. |
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Retail floorplans are also used in the design of retail premises. These can include 2d or 3D floorplans. |
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Rather than offering loans for specific vehicles, most floor planning companies supply dealers with a revolving line of credit<ref>http://www.dealertraining.org/dealer-floor-plans.html</ref> that they can use to acquire inventory, such as through [[auctions]]. |
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==References== |
==References== |
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Revision as of 18:49, 13 June 2013
Retail floor planning (also referred to as floorplanning or inventory financing) is a type of short term loans used by retailers to purchase high-cost inventory such as automobiles. These loans are often secured by the inventory purchased as collateral.[1]
Floor planning is commonly used in new and used car dealerships.[2] Contrary to common perceptions, most car dealers do not own the vehicles on their lot. Even smaller dealerships can have an inventory of vehicles representing millions of dollars of capital investment.
Most car dealerships floor plan their vehicles, and factor the cost of financing inventory into their sale price. This also creates incentive for the dealers to turn around vehicles as quickly as possible. Floor planning costs can run into hundreds of thousands of dollars a month for a big multi-location dealer with large inventories.[3]
In the case of new vehicles, they are generally floor planned by the manufacturer, such as General Motors Acceptance Corp, or GMAC. With used car dealers, there are a number of specialty finance companies that cater to their industry.
Rather than offering loans for specific vehicles, most floor planning companies supply dealers with a revolving line of credit[4] that they can use to acquire inventory, such as through auctions.
Dealers of recreational vehicles, boats and major appliances may also use floor planning for all or part of their inventories.
References
- ^ http://theciada.com/wp-content/uploads/2012/08/State-Association-Floorplan-Training-Deck_Final-2012.pdf
- ^ http://www.sba.gov/content/what-floor-plan-financing
- ^ http://www.autodealermonthly.com/51/2358/ARTICLE/Taming-The-Floor-Plan-Monster.aspx
- ^ http://www.dealertraining.org/dealer-floor-plans.html