PG&A profitability

swadminJune 24, 2009

Take away the cost of a facility, consider all items under the roof and then ask yourself: What then would be a dealer’s largest capital investment? For some it could be their pre-owned inventory. But for many others, it’s their parts and accessories department inventory, says Kent Meadows, a regional vice president of training for Assurant Solutions.
For that reason, the Powersports Business Conference & Expo is taking a hard look at the PG&A department with three separate seminars all aiming to improve dealership profitability in this key arena.
“A parts manager is the dealership’s wealth manager,” Meadows says.
What dealer principals and their general managers should expect from their parts manager will be part of this seminar from Meadows. In general, some of those expectations include:

40-percent margin on all sales, with getting more than that percentage being the ideal;

25-percent contribution to the dealership’s bottom line.

Three turns for each item in stock.
Meadows says achieving that last item should produce several positives for the store, including providing better return on investment and more flexibility to address changes in market conditions and customer demand.
“It’s one of the most profitable departments in the whole store,” he says, “and it should be run that way.”
To learn more about profitability in the PG&A department, make plans to attend the Powersports Business Conference & Expo. Under the theme of “Profit Xcelerator,” the two-day training event will be held Monday and Tuesday, Aug. 31 and Sept. 1, in Indianapolis. It will follow the Indianapolis MotoGP, an event that drew more than 90,000 motorcycle racing fans in 2008 in addition to a large dealer audience.
Profit Xcelerator will feature seminars from not Meadows and other leading training consultants and industry experts. Each day, two tracks of seminars will touch on a number of key dealership profit centers, including parts and accessories, pre-owned units, service department and new unit sales.
Industry leaders and dealers also will be featured on panels that will explore several timely issues, including e-commerce and marketing.
The Powersports Business Conference and Expo also will include nearly 14,000 square feet of exhibition space for leading industry suppliers.

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