First half of the year barely profitable for dealers

SIOUX FALLS, S.D. — The average dealer tracked by Spader Business Management reported a net profit of $5,447 for the first six months of the year, compared to $142,666 in profit during the same period of 2008, the company reported in a recent statement.

Decreases in sales and gross margins played a big part. And while the dealers reduced their spending in all categories, it wasn’t enough.

“Spending in terms of dollars continues to run about 20 percent lower than 2008,” the company stated. “However, with revenues down by nearly 30 percent, the bottom line still suffered.”

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 for the average dealer tracked by Spader Business Management were down 40.9 percent for the first six months of the year when compared to the same time frame in 2008, according to Spader. Sales dropped from $3,252,018 to $1,921,288. Pre-owned boat sales were down 8.4 percent to $538,535.

New boat inventory levels were down 17.1 percent for the first half of the year — from $3,558,407 to $2,948,799. Spader reported pre-owned boat inventory was up 7.3 percent to $431,842 during this period, resulting in a total inventory decline of 14.6 percent.

Total dealership sales fell 29.2 percent to $3,932,119 during the first half of the year, compared to the same period of 2008. F&I revenue fell 45.1 percent and service revenue dropped 13 percent, while parts and accessories revenue was down 9.3 percent, marina revenue was down 2.8 percent and other department sales fell 17.8 percent.

The total dealership gross margin percentage was up by 1.1 percentage points because with boat sales down, a greater percentage of revenue is coming from higher margin areas such as parts & accessories, service, finance & insurance and marinas, Spader explained. Unit gross margin percentages were down by 2.1 percentage points to 14.9 percent, compared to last year.

  • For more of the latest news, click here.

Leave a Reply

Your email address will not be published. Required fields are marked *