Last month we looked at the 2009 year-end national norm numbers. This month, we’ll explore the year-end numbers for the TBOC.
In chart 1 you can see that these dealers were getting close to 25% gross profit and actually showed over 2% net for the year. This is primarily due to the huge effort they have made to get expenses in line with benchmarks.
Chart 2 shows the effects of reducing new motorcycle inventory. Flooring expense was still high. Advertising was coming down as dealers focused on shows and events. ATVs and pre-owned sales were areas of profitability. I’ve been extolling the virtues of pre-owned in this column for some time, and these numbers show why it is important to grow this area of your business.
Chart 3 reveals P&A gross profit per vehicle sold is very strong. This is due to reduced unit sales and the focus on maximizing P&A sales. I hope this effort won’t be lost when the market returns. Surveys prove that customers who purchase more P&A at the time of the vehicle sale return higher CSI scores.
The service end of the business remains strong. Dealers are learning to concentrate on maximizing technician work time and eliminating non-producers. As a result, the gross profit is up.
F&I is weak due to poor finance approvals and credit limitations. Yet, this is an importance profit center; be sure you have the strongest performer you can find in this position — look for them now.
As you can see, it is not all "gloom and doom" out there. Dealers are making money by controlling expenses and hiring top quality employees. As I have said before, there is no reason to have "B" and "C" players when there are "A" performers looking for jobs.
Track your numbers, keep your inventory under control, hire the right people and provide exceptional customer service. These are still the keys to success.
How to Grow and Excel in Digital Retailing
This recorded AIMExpo education track discusses the world of digital retailing and why you need to be there.
At AIMExpo 2024, Meagan Kusek, editor for MPN, moderated the marketing panel in MPN's Dealer Excellence education track. The panel consisted of Johnathan Aguero of Transax, Jason Nierman of Rollick, Mike Wyrzykowski of Blackpurl, Troy Snyder of Trader Interactive and Martine Nuera of DX1.
In this session, Kusek and the panel discuss what digital retailing is, why dealers need to be in the digital space and how they can excel there. The panel relates how the digital user experience has changed, how to manage digital leads, best digital retailing practices and even how artificial intelligence (AI) might affect dealers in the future.
NPA Pre-Owned Market Update: February 2024
Average wholesale prices continue to improve, reflecting dealer sentiment and demand for pre-owned.
Establishing the Right Pay Plan for Your Dealership’s F&I Team
In an industry where skilled F&I professionals are in high demand, an attractive, fair and equitable pay plan becomes a key tool.
Maximize Every Sale With F&I and PG&A
This recorded AIMExpo education track discusses how the bike is just the start of the sale.
Elevating Your Sales Game Through Parts Packaging
Breaking down the art and science of a well-designed, customer-focused, profit-friendly parts package.
Other Posts
Unleash Your Experts: How to Be a Long-Tail Resource for Powersports Enthusiasts
Closing deals and providing service are a dealer’s bread and butter, but your dealership has far more to offer.
Building a Growth Stategy With a Powersports Playbook
Success isn’t a fluke, and it’s not luck. It’s a strategy.
Fostering an F&I Culture That Sells
Dealership success hinges on the ability to cultivate a strong F&I culture.
Increasing Profits Through Accessorizing
Go out and find the units to dress up — there’s lots of extra profit to be made.
