5- PROFIT CENTER MANAGEMENTHow to Divide & Conquer

Your Departments for Maximum Profitability

By Gart Sutton

WORKSHOP TAKE-AWAYSIn this workshop you will learn:1. Strategic-thinking that will ensure greater profitability. 2. Benchmarks you need to provide direction and focus. 3. Best practices and must-dos you need in order to make

it happen.

FUNDAMENTAL #1: MEASUREMENTS

You must maintain an overall dealership 25-30% gross margin so you can pay the bills and drive something to the bottom-line.

OVERALL DEALERSHIP

GROSS PROFIT BENCHMARK

Sales Cost-of Sales 25-30% Gross Margin

FUNDAMENTAL #2: ACCOUNTABILITY

What department is helping you and what department is hurting you in achieving your 25-30% overall gross margin goal?

HELPING OR HURTING YOU?

NEW UNIT SALES DEPARTMENT GROSS PROFIT BENCHMARK

*Price

reductions,

trade over-

allowances, free

accessories &

free apparel

Sales minus Cost-of Sales minus Concessions* equals New Unit Gross Profit

HELPING OR HURTING YOU?

PRE-OWNED SALES DEPARTMENT GROSS PROFIT BENCHMARK

*Price

reductions,

trade over-

allowances, free

accessories &

free apparel

Sales minus Cost-of Sales minus Concessions* equals Pre-Owned Gross Profit

HELPING OR HURTING YOU?

FINANCE & INSURANCE DEPARTMENT GROSS PROFIT BENCHMARK

F&I Gross Profit divided by Total New/Used Units equals F&I Per Vehicle Sold

$450 to $1,000 PVS

HELPING OR HURTING YOU?

PARTS, ACCESSORIES & APPAREL DEPTGROSS PROFIT BENCHMARK

Sales minus Cost-of Sales minus Concessions* equals Parts Gross Profit

*Price reductions, clearance, giveaways

30% to 35%Sales minus Cost-of Sales minus Concessions* equals Accessory Gross Profit

34% to 38%

*Price reductions, clearance, giveaways

HELPING OR HURTING YOU?

SERVICE DEPARTMENT GROSS PROFIT BENCHMARK

Labor Sales minus Tech Pay equals Service Gross Profit

70%

QUESTIONS & ANSWERS

5- PROFIT CENTER MANAGEMENTHow to Divide & Conquer

Your Departments for Maximum Profitability

Gart@GartSutton.comwww.GartSutton.com