April 23, 2007: Bringing visibility, profitability to a dealership

This series of articles recaps some of the opportunities that were uncovered by Gart Sutton & Associates’ powersports specialists during consulting visits.
These opportunities are followed by recommended actions. The goal of this series is to provide you with ideas on how to help you improve your dealership.
The focus for this dealership visit was to create proper categories to monitor inventory, develop inventory tracking systems and improve efficiency and profitability in the P&A Department; provide training on the value of offering F&I products to all customers; and install the processes necessary to make these departments profitable contributors to the dealership’s bottom line.
This is the first of four articles that will focus on this dealership.
Dealership Details
This small, multiline dealership is located in a rural market that is a popular destination for year-round motorized and nonmotorized recreation. They have recently completed a multi-phase dealership remodeling project. Their volume is less than 500 units annually. They reported gross sales of nearly $4 million, but they ended up losing money. The owner was particularly concerned about the P&A department, where the gross profit margin hovered around 25 percent. Very few of the profitable F&I products were being offered to customers.
The facility’s exterior
The dealership is tucked away in an industrial park. There is no visibility of the dealership from the main highway. If you look closely as you drive by, you might notice the dealership signs on the roof. Thus, there is little chance of attracting drop-in business. There is limited window area, but there are no displays other than units sitting on the floor.
Recommended actions

  • The dealership owns a warehouse that can be seen from the highway. Installing the major dealership signage on this building will help attract additional traffic.
  • Installing large windows on the upper level of the warehouse and creating lighted unit displays that can be seen from the highway also will increase traffic.
  • Developing elevated unit displays for the windows in the showroom and highlighting these displays with spotlights that remain on after the dealership closes will increase visibility.
    The facility’s interior
    Once inside, there is a good “wow” factor because of the newly remodeled showroom. Signage for the departments is good.
    Although there is a small showroom, it is adequate for the market. There is room for good accessories displays around the showroom. Although there is a small customer waiting area in the showroom, there are no refreshments available there.
    There is an excellent parts counter, but most of the inventory is located upstairs. This results in the parts person leaving the counter area frequently to retrieve parts. There is an area near the counter that could be used for stocking fast-moving parts. Security of the dealership’s data is critical. However the server is located in an open office near the showroom.
    Recommended actions

  • Adding refreshments, such as coffee and soft drinks, to the customer-waiting area will promote customer satisfaction and help occupy them while they view the unit and accessories displays.
  • Rearranging the area behind the parts counter wall to accommodate multi-drawer cabinets and bins for fast-moving parts will increase efficiency and ensure the parts staff remains in the counter area more of the time.
  • Utilizing a secure, locked closet for the server will reduce the possibility of damage or loss because of vandalism or theft.
    Service Reception Area
    The access and signage for the write-up area is good. It is clean and orderly and is isolated from the smoke and noise from the shop. There is no menu board listing common services. There are no clothing or accessories displays in the write-up area. Technician diplomas are not posted.
    Recommended actions

  • Developing and posting a menu of common services that are priced based on market value will promote additional service business and increase profitability.
  • Displaying seasonal clothing and accessories in the write-up area will promote additional sales of these high-profit items.
  • Posting technician diplomas helps to increase the perception of value for the prices that you charge for your service work.

    Author, speaker and educator, Gart Sutton has been retained by every major powersport manufacturer/distributor. He is a frequent keynote speaker for national motorcycle conventions and state motorcycle dealer association events. Visit www.gartsutton.com

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