PSB’s 123s: How to save money at your dealership

How to save money at your dealership

1. Align your most valuable asset — your employees. “Most dealership employees I have encountered care a lot more about their store than we give them credit for as managers, and we do little to encourage them,” said Dave Waugh of Systematyx. That support could make all the difference.”

2. Think about what you’re rolling into and out of the dealership. “Those employees pushing the bikes are not making any money for the store,” said Mark Mooney of Mohala Motorsports Consulting. “In my dealership, it took two employees an hour in the morning and two employees an hour in the evening to roll bikes. Is that where your labor is best spent? Can you do a strategic exterior display that requires less payroll time?”

3. Leverage your own prospects list. “A lot of dealers buy lists of prospects for direct mail and e-marketing purposes, but the best list is the one that you create from all lead sources — online, walk-in, phone, shows, etc. — and enter in your lead management database for continuous, proper and effective follow-up,” said Bob McCann of ARI Network Services Inc.

4. Incentivize best ideas. “Schedule a regular company meeting and discuss ideas in an open format,” Waugh said. “Hand a $100 bill to the frontline employee with the best cost-cutting suggestion. Help them to truly understand the short- and long-term benefits that can be achieved if you all work as a team in identifying and addressing the issues in your store. Invite them to take an active role in cost cutting, and you may not feel so alone.”

5. Keep an eye on dealer incentives and rebates. “These are easily missed if you are referring to the dusty old binder that seems to never be updated with the pages you need,” said Dave Yeargin of Ziios. “OEMs incentivize dealers financially, to move specific units. The OEM sends this information to the dealer either by mail or email. These notices are to be printed and placed in a binder in the dealership’s sales office.”

6. Seek out competitive insurance providers. “One of our 20-group dealers reported saving $2,400 a month by using a different insurance provider for their garage liability, inventory, property and umbrella coverage,” said Steve Jones of Gart Sutton & Associates, Inc.

7. Utilize perpetual inventory. “It helps enormously with cash flow management,” Mooney said. “The parts department is a huge cash flow drain. Having the right parts, in the right quantities, at the right time is a substantial money-saver.”

8. Reduce P&A obsolescence. Reducing inventory that has not been sold in 12 months will free up money that can be reinvested in high-turn items. “The savings comes from the fact that obsolete inventory loses value the longer it sits,” Jones said. “In addition, this tied-up money costs the dealership since it is neither acquiring interest nor returning profits.”

9. Renew your URL for 10 years or more. “Renewing your Web address for 10 years or longer is more affordable than doing it every year,” McCann said. “The added bonus is that it will increase your search engine visibility. The longer you have a URL, the higher your credibility with search engines.”


10. Take your business to the cloud. “By running business applications such as your dealership management system over the Internet from centralized servers rather than from on-site servers, dealers can cut some serious costs,” Yeargin said. “Furthermore, while avoiding maintenance costs, licensing costs and the costs of proprietary hardware required to run servers on-site, a dealer is able to run a DMS application much more efficiently from a computing standpoint.”

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