Tag: Powersports Business

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Business Growth

Where Are You Making Your Money?

While February numbers showed major unit sales up 13.4 percent, March 2022 numbers from CDK Lightspeed DMS revealed revenue from new and pre-owned sales declined by more than four percent as compared to March 2021, based on composite data from 1,700 dealerships in the U.S. The only positive number in the CDK data was a 4.7 percent increase in service department revenue, countered by an 8 percent decrease in parts revenue. Clearly, consumers are choosing to repair their current bike – if they can get the parts!

Supply chain challenges continue to plague the powersports industry. From new units to used units to parts, 86 percent of dealers said their inventory was too low in the first quarter of 2022. According to the Q1 2022 Powersports Business/BMO Capital Markets Dealer Survey, low inventory woes have increased from Q4 2021. And the pain is being felt across all powersports segments.

While inventory levels may remain dismal for several months, there are strategic opportunities to generate revenue. Let’s consider three tactics that generate profit and strengthen customer engagement.

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Categories
Dealership Training

Subscription Training Delivers Profit

May closed out with powersports dealers feeling pretty good about the state of their business. According to a Powersports Business Online Learning Series poll, nearly one-third of responding dealers ranked the success level of their dealership as a 9 or 10 (on a scale of 1-10). It’s no wonder! April numbers continued their meteoric rise, with major unit sales rising 39.2 percent in April 2021 versus the previous year. With Spring in full swing and Summer just around the corner – and the rain subsiding for many – the forecast for the first half of 2021 remains very strong for both new and used units.

Despite continued inventory constraints and some concerns about labor and inflationary numbers, it looks like the powersports industry will have a banner year. But what if there was some additional profit to be had from unit sales? And not just small change, but measurable PRU? Those profit opportunities can be found in training.

This month, EFG launched a subscription-based training model which includes both digital and in-person options, delivering timely tools in a learning environment that works best for each employee. The service also supports the new digital retailing model now used by many powersports dealers. Dealer management can select their preferred subscription package across a wide variety of curriculum, benefiting from up to a 20 percent discount from standard training rates.

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Categories
Business Growth

Tired of Chasing Inventory?

While monthly sales numbers have certainly brought good news to retail powersports dealers, there is a flip side to the story. Recently polled dealers who attended a Powersports Business Kenect event shared growing concern about new unit inventory, with 78 percent of respondents noting they were very or extremely concerned. In Q1, 85 percent of dealers said their inventory was too low. With 72 percent of dealers reporting double-digit sales growth in Q1, it appears that the 2021 will be a year spent scrounging for inventory.

We all know that the best option to tackle the inventory shortage is to target the trade-in, but how do you convince people to trade in with you?  While stimulus money is easing near-term financial worries for many consumers, much of that money will be targeted toward paying off debt, delinquent rent, and other expenses incurred due to lost employment income. Educate the customer that their trade-in vehicle has value which can be applied toward their next powersports purchase. Contact recent customers and discuss their current situation. Are they using their motorcycle or ATV, or are they contemplating a new side-by-side? Capture details on the trade-in remotely and provide trade-in options that get them closer to the sale.

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