EDITOR'S NOTE: The Dealer LAB project is a joint effort between Dealernews and PowerHouse Dealer Services, a consulting firm run by Bill Shenk, detailing his efforts to return a Florida powersports dealership, renamed Destination Powersports, to profitability. The financial information in this report is taken from the dealership’s Composite Report supplied by Shenk and is prepared as part of the dealership’s participation in the PowerHouse Dealer 20 Group. The Composite Report is produced from the store’s monthly financial report. In preparing these Dealer LAB reports, Dealernews reviews the dealership’s unaudited P&L statement and Balance Sheet and its Composite Report.
NET INCOME AT OUR Dealer Lab dealership, Destination Powersports in Punta Gorda, Fla., jumped more than $24,000 in August, driven in large part by strong machine sales. Total Net Income for the year still trails last year, however, by about $23,000. The dealership earned $126,536 through the first eight months of 2012, down from $149,171 earned in the same period last year.
Unit sales were more than double those of August 2011: 57 units, compared to only 21 units last year. The big seller was in PWC: 17 units this year, up from only four units last August.
Year-to-date unit sales were 406, up from 309 January-August 2011. Revenue jumped by nearly $300,000, climbing to $457,637 from $160,626.
Gross Profit on unit sales in August was up more than $40,000, increasing to $58,227 this August from $17,876 in August 2011. Gross Profit on unit sales for the year through August was $422,666, an increase of $84,251, or 24.8 percent, from the $338,415 posted in the first eight months of last year.
Sales per employee in August jumped to $76,273 from $30,595, and Gross Profit per Sales employee nearly tripled, climbing to $12,897 this August from $4,794 in August 2011.
Margins were up, too, as well as F&I income on a Per-Vehicle-Sold (PVS) basis.
“If my memory serves me, we said last year at this time that I felt as though we had slipped into the average dealership mode of administrating sales, not creating sales,” said Bill Shenk. “When you ‘administer’ sales, as we were last year, you wait for a potential customer to contact you. Then you give them courteous attention and work every deal for every dollar (often called ‘strong desking’). That’s where I believe we were last year.
“This year, we are back on the FasTrak process: Make a friend, Diagnose, Prescribe, Ask To Buy,” he added.
Destination Powersports is prospecting its previous leads much longer and more proactively — and it’s approaching more Parts and Service customers. (Continued)