Dealer margins increased in 2010

SIOUX FALLS, S.D. — While the average dealer reported a decline in new boat sales in 2010, the average gross margin earned on those sales was up by nearly 2.5 percentage points. according to a 2010 year-end report from Spader Business Management.

New boat sales were 4.6 percent lower in 2010, compared to the same period in 2009. Total dealership sales at the end of 2010 were 1.5 percent greater than in 2009.

At the end of 2010, the average dealership reduced its new boat inventory by 23.3 percent and used boat inventory by 19.2 percent, which signals that most dealers are in a better inventory position for the start of the 2011 season. This should help dealers to continue to earn the higher gross margins as in 2010, which were up by 1.8 percentage points, according to the report.

The increased margins and better expense management have allowed most dealers to turn in a much-needed bottom line profit for 2010. The average dealer reported a net operating profit of 1.7 percent of sales for 2010, which equates to $224,164. In comparison, 2009 was a break-even year.

The average dealer reported year-to-date new boat sales of $3,237,789 compared to new boat sales of $3,393,955 in 2009 — a decrease of 4.6 percent. Total dealership sales were $7,945,809 compared to $7,831,690 in the prior year — an increase of 1.5 percent.

Pre-owned boat sales for the average dealer brought in $1,044,322 compared to $1,069,7456 in 2009, a decrease of 2.4 percent.

The Spader 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.

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