Dealer profits hit hard in 2006

SIOUX FALLS, S.D. – Net profits were down almost 23 percent for the average dealer tracked by Spader Cos. during the 12 months ended Dec. 31, compared to 2005, the company reported in a recent statement.

During 2006, the average dealer earned a net profit of 3.1 percent of sales or $303,847, compared to 4.1 percent of sales or $392,306 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 0.6 percent, having increased to $6,426,209 while used boat sales were up 2.7 percent to $1, 017,321.

Total dealership sales were up 2.4 percent to $9,903,306 for the average dealer during 2006 compared to 2005, reported Spader.

New boat inventories were also up, having increased 14.3 percent to $3,427,244, compared to the previous year, as were the average dealer’s used boat inventories, which jumped 13.4 percent to $347,443.

The unit gross margin percentage was down 0.8 points to 17.9 percent in 2006, while total company gross margin percentage was down 0.1 points to 28.5 percent.

Spending was up 6 percent in terms of dollars, and as a percentage of gross margins, it grew by 3.4 points. The largest increase came from floorplan interest, according to Spader.

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