Dealer profits gaining ground

SIOUX FALLS, S.D. – The average dealer tracked by Spader Business Management is reporting a net profit of $17,198 for the five months ending May 31, compared to $146,039 during the same period of last year, a decline of 88.2 percent.

That may not sound like cause for celebration, but in contrast to last month’s report, which suggested Spader dealers’ profits were down 476 percent, compared to the same period of 2007, it’s a dramatic improvement.

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.

Total dealership sales for the average dealer tracked by Spader Cos. were down 21.6 percent to $3,790,655 during the five-month period, compared to the same period of 2007.

That’s largely due to a 28.8-percent drop in new boat sales and a 19.7-percent drop in used boat sales, as well as declines in revenue from parts and accessories, service, marina and F&I departments.

The good news is that the average Spader dealer’s new boat inventories were down 2.0 percent to $3,835,236, while pre-owned boat inventories decreased 0.1 percent to $397,634.

In terms of dollars, spending was down significantly across all categories for a total decline of more than $150,000, compared to the same time last year. But as a percentage of gross margin, spending was up by 9.4 percentage points, according to Spader.

The unit gross margin percentage was down 0.5 points to 16.8 percent, while total company gross margin percentage was up 0.1 point to 27.6 percent. This latter percentage is slightly higher than the total dealership gross margin percentage reported during the same period of 2007, largely due to higher margin products and services making up a bigger percentage of the total dealership revenue, according to Spader.

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