Dealer profits hit hard

SIOUX FALLS, S.D. – Net profits were down almost 50 percent for the average dealer tracked by Spader Cos. during the four-month period ended April 30, compared to the same period of 2006, the company reported in a recent statement.

The average dealer earned a net profit of 4.5 percent of sales or $42,127, compared to a net profit of 8.8 percent of sales or $82,896 during the same period of 2006.

The silver lining is that new boat sales were up 1.8 percent, having increased to $2,369,028. Used boat sales were up 26.6 percent to $370,864.

Total dealership sales were up 5.1 percent to $3,488,958 for the average dealer during the first four months of the year, compared to the same period of 2006, reported Spader.

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 inventories, which were up in 2006, continue to run higher in 2007. For the four-month period ended April 30, they were up 8 percent to $4,309,924, compared to the same period of the previous year, as were the average dealer’s used boat inventories, which have jumped 12.4 percent to $436,398.

The unit gross margin percentage was down 1.2 points to 17.3 percent, while total company gross margin percentage was down 1.3 points to 27 percent.

Spending was up both in terms of dollars and as a percentage of gross margin, having increased by 4.3 percentage points to 95.5 percent. Personnel, floor plan interest, semi-fixed and fixed expenses all were up, while advertising expenses were down slightly so far this year, according to Spader.

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