South Sound prioritized the purchase of used motorcycles, ATVs and side-by-sides from various sources including trade-ins, street purchases, auctions and buy-backs from existing customers. The dealership’s pre-owned sales drove a record year in both gross sales and profits in 2021. The shop’s service department evaluated used units and alerted the used sales manager, and they refurbished every unit obtained.
It all begins with obtaining units, and the dealership successfully brought in units early in the year with NPA auctions. “We use all ways to chase down used units,” said Jeff Reiner, president of South Sound Honda. “Street purchases are what we call the units we find from customers, whether through Craigslist and a wide variety of sources.”
The dealership also reached out to car dealers, encouraging them to trade instead. The dealership increased its purchases from licensed dealers by 25 percent in 2021. They contacted previous buyers, and parts and service customers, and they were able to buy back 15 percent more units in 2021 over previous years. The business saw an overall growth of 14 percent in 2021, much of it through pre-owned unit acquisitions and sales.
“There’s nothing difficult about selling preowned units right now,” said Reiner. “They’re our easiest thing to sell. The most difficult thing is getting enough of them. We have plenty of room for stocking and storage.”
Looking ahead to the 2023 sales season, Reiner sees a slowdown in used sales profitability. “The only thing is making sure we don’t carry units too long because prices should be coming down at some point. They’ve been at historic highs. The challenge is, if you’re buying too high then you’re not going to have a profit margin. The car dealers are feeling this right now. It hasn’t hit us yet because our new-vehicle supply is still short. I’m just being careful I’m not getting too high priced into them.”
Powersports Business looks forward to recognizing dealerships with best practices at the 2023 Accelerate Conference in Dallas, Texas this November. Nominate your dealership for a Best In Class award!