I was recently asked to come into a very nice mid-size dealership that represents four manufactures and do a general evaluation to help them in their search for best practices.
When evaluating the parts and accessory department, I looked at the team, the parts operation and the accessory operation, both individually and as a whole.
The team members were very professional in their appearance. They were very knowledgeable about the products and services offered, and they took a great deal of pride and ownership in the operation.
The parts operation was well organized. Inventory was under control. Special orders were handled efficiently. Parts to service was well managed.
Based on the number of units the showroom is selling, and the mix of those products (street, cruiser, touring, dirt, ATV, and PWC) and the size and location of their customer base, their total parts sales volume was Top Gun caliber per type of vehicle sold.
The accessory operation was well merchandised. Great POP signage. Good mix of product based on their mix of units sold. However, their sales of accessories was only 60% of Top Gun performance.
How could this be with such a proficient, professional, and knowledgeable staff?
Upon further diagnoses, I noticed that the gross dollars per employee per month and the gross profit per employee per month were ABOVE Top Gun levels.
I thought maybe the team didn’t have time to sell anymore. So I checked the average ticket to customers and the lines per invoice to customers and these were BOTH BELOW Top Gun levels.
At last I had my answer. We needed more staff if we were going to sell more, not more customers; the customers already were there.
But why, you might ask, were they able to sell so many parts? Here’s the answer: Your customer will wait for something he must have in order to use his or her MC/ATV/PWC (parts) but they will not wait for things they do not need in order to use their toy (accessories).
REMEMBER: You are no better than your weakest link.
With a few quick calculations, it was discovered that without buying anymore inventory, or doing any additional advertising, they could increase their accessory sales by $370,000.00
That’s more than $7,000.00 per week in lost revenue. All because of simply not having the staff to handle their existing customer traffic therefore depriving their customers of the opportunity to purchase the additional items they desired to fully enjoy the products they already owned.
This was just another reminder of how running a Top Gun dealership is so much like racing. There is no magic. It truly comes down to the right combination of little things that make the BIG differences in your bottom line and customer satisfaction.
REMEMBER: you SELL accessories and ADMINISTER parts.
Bill Shenk of PowerHouse Dealer Services may be reached at 866.896.3759 or email Bill@phdservices.com.
Copyright 2005 Powersports Business