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Business Management

Profits Trending Up For May and June

Some of the 20-group dealers are seeing increased net profits

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At GSA we track benchmarks through our involvement with dealer groups, such as the Best Operators Clubs. Some of the members have kindly consented to let us share their numbers from our real-time, web-based data reporting system.

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New this month we are adding National Norms data from our RPMG system. Currently, fourteen dealer groups are entering data in that system. Altogether, we have over 200 dealers to incorporate in our analyses and comparisons.

Last week I saw an article that discussed the improving RV business. It seems unreal that their business would be recovering sooner than ours, but it sure looks that way. After all, we offer viable alternative transportation that not only gets good gas mileage, but it’s fun, too!

Regardless, it seems I’ve discovered a significant positive trend in our industry. Net profits, what we refer to as net operating profit (NOP), have been improving over the last few months. This is true in the two Best Operators groups I checked, as well as in the RPMG National Norms.

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In Chart 1 we can look at the BOC numbers as well as the RPMG National Norms. The National Norms are a compilation of all dealers in the RPMG system. They are separated by metric and H-D.

 

 

LINGO

 

CY: current year

PVS: per vehicle sold

TBOC: average of the top five BOC members in this category

* Some rows and columns without data have been removed to reduce table sizes.

Chart 1


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In BOC-1, gross profit has risen as members continue to get a handle on inventory and expenses. NOP began severely in the red in January, but rose to a moderate profit in June. BOC-2 appears to have controlled their expenses earlier and has maintained a steady gross profit. Their NOP did not show quite as severe negative numbers; it rose to 4.3 percent in May and dropped a bit to 2 percent during June. The good news is that it was still a positive number. The overall trends here are important as they point to a steady recovery for these dealers.

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The RPMG numbers reveal a steady gross profit, if a bit on the low side. However, the NOP was consistently better and followed the same rising trend, except for a drop in June.

Just for comparison, I have included the H-D dealer National Norms. Chart 2 shows a strong, steady gross profit. NOP shows relatively little red ink, with only January being in the negative. This shoots down a lot of the rumors about how bad the recession has been for H-D dealers. While this may be low for H-D dealers relative to the “normal” or flush years, it is still good compared to what the metric dealers have suffered.

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Note: Our data reporting and analysis system is available for any dealership to use for a nominal fee. If you want more info on the Voyager IV data reporting system or BOC, please e-mail [email protected] or visit our website at www.gartsutton.com.

Chart 2


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I hope this has given you some optimism regarding the recession. Many of what economists call "precursors to recovery" are positive; things are looking better.

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In the meantime, maintain control of your expenses in relation to your revenue. Track and measure every aspect of your business. Compare these numbers to the benchmarks. Share this data with your managers. Hold your managers accountable for results.

If you are not in a group, we strongly encourage you to join a 20-group. It may be the most important thing you do for your business.

 

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