Dealer net profits less than half of 2007 levels
SIOUX FALLS, S.D. – Net profitability for those dealers that are tracked by Spader Business Management was down by 2.4 percentage points for the first six months of 2008, when compared to the same period of last year.
Through June of last year, the average dealer tracked by Spader, reported a net profit of $278,683, or 4.4 percent of sales; the same bottom line number in 2008 showed a total of $98,098, or 2.0 percent of sales.
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 gross margin percentages have fallen 1.3 percentage points below the 2007 gross margin percentages during that same period, while new boat sales total dollars were down by more than 27 percent. Total dealership sales were off slightly less, dropping 21.7 percent year-over-year, and the dealers managed to keep total dealership gross margin percentages level with 207 numbers, recording a 26.9 percent gross margin.
New boat inventory levels were down by 3 percent, and the average dealer reported a 14-percent reduction in spending over the first six months of 2008. However, Spader points out, that the average dealer is still spending a larger percentage of their gross margin earned. In 2007, dealers profited 16.4 percent of the total gross margin, whereas that number fell to 7.4 percent in 2008.
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