Surviving A Slow Unit Sales Season

As we all know, not every sales season starts off with a bang.  There are a lot of factors that affect unit sales, such as local and/or global economic conditions, new model enthusiasm and availability, and let’s not forget the big one, WEATHER!  So what do you do to survive a slow start to the season or units sales that are below expectations?  Read how

Your bread and butter is found in your Parts, Accessories and Service departments.  Regardless of the viability of your unit sales, these three departments will always chug along.  Whether customers are in the buying mood for a new vehicle or boat, they will always need to summarize or winterize their units, need accessories such as clothing, water toys, lifejackets, chrome and the list goes on.  The DIY folks will need parts to do their own repairs and there is always that service job for the customer that can’t get their boat started or their motorcycle when it comes out of storage.

There is an old saying that comes from the auto industry called “Cracking The Nut”.  Some of you have heard me talk about this in past dealer conference presentations.  It is a formula that calculates the profit from your Parts, Accessories and Service departments as it compares to your overhead and expense.  The philosophy is, if you can cover your total expense by the profit from these three departments, then you can survive and be profitable under any unit sales condition.

We tend to be so focused on unit sales and the income they generate, that we don’t pay enough attention to these other three departments.  If you want to maximize your profit potential under any business conditions, look to your “back end” departments to cover your expense and use your unit sales as your gravy.

When you are preparing your business plan for the coming season give your Parts, Accessories and Service their due respect.  Consider the following in your plan:

• Maximize your profit potential for accessories through preseason booking order incentives.  Most suppliers will offer deferred terms or cash discounts, volume discounts, and end of season return percentages.
• The same applies for parts and particular attention should be paid to fast moving items such as filters, spark plugs, oil etc.
• Advertise early season service specials like tune ups and oil changes. 
• Dedicate some of your advertising dollars to monthly parts, accessories and service incentives and promotions
• Dedicate adequate space in your store to display your parts and accessories, including visible signage and promotional specials
• Remember accessories and even parts are very much an impulse purchase so have the hot sellers’ front and centre, not tucked at the back of the store.

If you can crack the nut or at least come close, then your unit sales will lead you to guaranteed profit regardless of whether you are up or down on your forecast for the season.  It will also substantially reduce your stress over unit sales volume and allow you to focus on maximizing your unit margins instead of panicking and falling into the dumping syndrome.

Need help with your plan?  Contact me.

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