Daylight savings time is here, and spring is just around the corner! With spring comes optimism for a successful quarter. (Although some may still be battling winter storms, hope springs eternal!)
It’s a good thing that powersports dealers are an optimistic, passionate bunch in general. Fueled by their love of sport and the outdoors, many say they have the best job ever. Granted, owning a business is not without challenges, and managing the financial obstacles can dampen the daily thrill. But what if I told you that you might be leaving money on the table every day and impacting your ability to MAKE MORE dealership revenue and overall personal wealth?
Contributing Author: Glenice Wilder Vice President EFG Companies
Did the first half of this year leave you cautiously concerned or hopefully optimistic? Depending on your product mix, you either experienced strong sales in the off-road powersports area or a soft market for new retail bikes. Several OEMs also reported single digit declines, and the average wholesale price for on-road vehicles was down about three to six percent. However, the average wholesale price for off-road vehicles remained strong, showing a four percent increase. With this level of uncertainty, what steps should you take to ensure a successful second half of the year?
Savvy dealers will focus on maximizing every possible sale. And that means maximizing profit per unit – PRU. There are many factors involved in calculating the PRU including overhead, OEM rebates and marketing charges, etc. But one clear way to increase PRU is through maximizing F&I and funding as many deals as possible. So let’s look at the deal after the customer says “I’ll take it!”
Where the Real Work Begins
It’s likely that a customer has entered your dealership to purchase a bike – not a maintenance package or a vehicle service contract (VSC). Chances are, they don’t even know these products exist – or any of the other F&I products you have to offer. The concept of protecting their purchase has probably not crossed their mind. They are simply interested in getting on that shiny bike and hitting the road.
Maximizing the PRU requires giving the consumer a view of the broader picture. Whether you offer simply a VSC and GAP, or also tire protection and overall maintenance, give the customer a clear description of all the products available – and why they are important to them. A menu is a useful way to disclose product offerings effectively and compliantly, increasing product penetration and PRU.
