Editor’s note: The Dealer LAB is a joint editorial project between Dealernews and PowerHouse Dealer Services, a consulting firm operated by Bill Shenk who is also owner of Destination Powersports in Punta Gorda, Fla. Financial information in this report is sourced from Destination Powersports’ Composite Report (prepared from the dealership’s monthly financial report) which is supplied to Dealernews by Shenk under an exclusive agreement. Shenk also provides Dealernews contributing editor Joe Delmont with exclusive access to select store and team meetings and other updates; Delmont uses this information as well as interviews with Shenk to develop the monthly Lab report in Dealernews and on Dealernews.com.
The financial information in this report is taken from the dealership’s Composite Report supplied by Shenk and prepared for the dealership’s participation in the PowerHouse Dealer 20 Group. The Composite Report is prepared from the store’s monthly financial report. In preparing these reports, Dealernews reviews the dealership’s unaudited P&L statement and balance sheet, as well as its Composite Report.
Our Dealer Lab dealership, Destination Powersports, in Punta Gorda, Fla., posted another profitable month in July, but perhaps the biggest news is that it was named a Polaris/Victory dealer. The products include the Victory motorcycle lineup and the RZR side-by-side machine portfolio.
Polaris will now have one outlet per county in the area around the dealership. Of the three counties running south to north — Lee, south of the dealership, Charlotte, where the dealership is located and Sarasota, to the north — Charlotte County has by far the smallest population, at 200,000.
“I feel that is a win/win for the consumer and the dealer body,” says Bill Shenk.
“We’re excited about having Polaris in our family of offering because Polaris/Victory makes us stronger at attracting the ‘fringe’ powersports wannabe to our facility,” Shenk says. “And we can do it without changing any of our basic operating procedures.”
In addition to expanding his capability to sell the new Polaris units, Shenk is stepping up his efforts to sell used motorcycles. He has been working with the Manheim Specialty Auctions to purchase used motorcycles through its auction facility in Daytona, Fl. (See “Five Questions,” page 10 – Editor).
NOT GOOD ENOUGH
The financial performance of Destination Powersports continues to outpace that of 2010, but it is not increasing as fast as Shenk wants. Consequently, he continues to make staff changes.
Year to date, the dealership is up 40 percent in unit sales: 288 versus 203 in 2010. January is up 15 percent (34 versus 30 units in January 2010), February is up 400 percent (32 vs. 8), March is up 22 percent (43 vs. 35), April is up 100 percent (66 vs. 33), and May is up 25 percent (45 vs. 36 units last May). June, though, was flat – (39 units in June 2011 and 39 in June 2010), so Shenk put his sales management team on probation.
July was up 20 percent, but the team was still on probation; and in the first week of August, he terminated one of the management team members. “The remaining sales manager is still on probation and has a very clear list of my expectations,” Shenk says. “He is a great person and powersports enthusiast, and I think highly of him and hope for his success. However, if he cannot get it done at the level that I am expecting, I will be forced to find someone who can.”
The dealership’s financial performance for the first seven months of the year is still well ahead of the same period in 2010. Through July, the dealership earned $158,173 on total revenues of $3.1 million, up $212,000 from the loss of $56,757 it posted for the same period last year on revenues of $1.9 million. Gross profit for the first seven months of this year is $834,254, compared to $570,759 for January-July 2010.
In July, the dealership sold 27 units, up from 22 last year, and generated unit sales revenue of $205,266, up from $159,610 last July. Payroll costs dropped from $20,623 last year to $11,352 this year, in part because staffing dropped from 6.0 to 4.25 persons.
“We were short staff in July and our customers were not given the attention I think necessary,” Shenk notes. “This is one of the issues causing the current probation situation. I feel we missed a business opportunity in July again, even though sales were up Y-o-Y. We did not prospect and follow up as I think necessary in today’s marketplace.”
In July, the picture for pre-sold maintenance was mixed. Seven packages were sold versus six in July 2010, but the revenue generated was only $2,643, compared to $7,393 last July. For the year, however, sales were ahead of last year, 71 to 25.
“This is another reason [staff is] on the probation list,” Shenk says. “We are now making a shift to selling a more stripped down version of our pre-sold maintenance. This should allow for greater penetration (tying more customers to us) and should give us the opportunity to upsell to the premium features, creating stronger relationships and more profit long-term.”
This story originally appeared in the Dealernews October 2011 issue.