June '19

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50 THE SHOP JUNE 2019 O wning a car dealership and under- standing how to operate profit cen- ters through the different depart- ments (parts, service, sales, etc.) can be a very lucrative business. If you are savvy and understand the car business, you can make a lot of money owning car dealerships. I have been fortunate enough in my 14 years as a restyler/expeditor whose core business is to call on car dealers to forge some very good relationships with the owners of various dealer groups in my market. A DEALER'S FRIEND Auto Action has had the opportunity to help car dealers add profits to every aspect of their stores through our diversified product lines. These include everything from hard-add products that we are all accustomed to like remote starts, leather interiors, etc., to warranty products like tire and wheel warranties, Etch programs and GAP protection—products typically sold through the finance department. In some cases when an owner group is really tuned into how to add aftermarket profitability to their dealership, we will show them departmental profits. What I mean by this is, Auto Action will sell a remote start, for example, to the dealership in a box to the parts depart- ment. The parts department will mark it up (realizing its profit) and then it will go to the service department. Service can either have us train its techni- cians on the installation process or can call us for a labor-only service when needed. Service can then mark-up our labor or simply produce profit from actually per- forming the installation once we've trained the technicians. Typically, a dealership is initially gung-ho on having us train its techs, only to discover the sustainability of the knowledge can be a challenge. They therefore concede to asking us to perform the labor, (which happens about 80 percent of the time). The installed product then makes its way to the sales floor, where it has a similar cost to calling an outside vendor. The dif- ference is that the dealership has already made money on this product if and when the salesperson needs to "throw it into" the deal to close the vehicle sale. OPPORTUNITIES IN USED CARS Today, new-car dealerships are experi- encing unprecedented margin erosion due Group Effort 50 THE SHOP JUNE 2019 The aftermarket has the opportunity to help car dealers add profits to every aspect of their stores through diversified product lines. Tips for enhancing your dealership profits. By Jared Cohen Many dealer groups understand the profit potential pro- vided by aftermar- ket offerings, and particularly safety products.

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