Dealer LAB: November gross profits up, but...

Publish Date: 
Jan 29, 2013
By Joe Delmont

(Click on the chart for a larger view.)

DO YOU REALIZE how important just one person is to the bottom line of your dealership?

The truth of that statement was evident to our Dealer Lab dealership, Destination Powersports, in November 2012.

The Punta Gorda, Fla., dealership was tracking $4,000 ahead of November 2011 in Gross Profit from unit sales until the last week of the month, when the sales manager went on vacation. In his absence, the sales team continued working hard and had a great collective attitude but just couldn’t seem to maintain the same level of sales.

Unit sales for November 2012 were $304,103 on 41 units, compared to $373,647 on 47 new and used units the previous November. The result: The dealership’s gross profit in the sales department ended up $8,433 behind November 2011, a swing of about $12,433 in gross profit for the month compared to the previous year. That translates to a $8,081 reduction in dealership net income for the month.

Owner Bill Shenk stresses that problems and solutions always involve people and processes. “In this case,” Shenk says, “it was people.”

For November 2012, the dealership earned $15,537 on total revenues of $408,997 — down from November 2011 when the dealership earned a net income of $26,380 on total revenues of $482,513.

Gross profit for the month was $113,250, down from $120,848 the previous year. That $12,433 in lost gross profit made a huge difference.

For the first 11 months of 2012, the dealership earned $140,225 on total revenues of $5,098,709, off from a net income of $190,740 on total revenues of $4,566,683 during January-November 2011. (Continued)