Dealers’ profitability taking a hit

SIOUX FALLS, S.D. – Net profits were down almost 18 percent for the average dealer tracked by Spader Cos. during the seven months ended July 31, compared to the same period of 2005, the company reported in a recent statement.

As of the end of July, the average dealer earned a net profit of 5.1 percent of sales or $352,299, compared to 6.3 percent of sales or $428,822 in 2005.

The training and consulting firm tracks North American boat dealers, both large and small, to compile an average profile, then compares year-over-year trends in a number of different categories.

New boat sales were up 1.1 percent, having increased from $4,584,308 to $4,637,006 while used boat sales were down 8.6 percent to $682,024.

Total dealership sales were up 1.2 percent to $6,919,686 for the average dealer during the seven months ended July 31 compared to the same period of 2005, reported Spader.

New boat inventories were also up, having increased 17.1 percent to $3,437,128, compared to the previous year, as were the average dealer’s used boat inventories, which jumped 12.6 percent to $364,807.

The unit gross margin percentage was down 0.3 points to 18.2 percent so far this year, while total company gross margin percentage was up 0.3 points to 26.9 percent.

Spending was up almost 9 percent in terms of dollars and nearly 5 points as a percentage of gross margins.

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