Dec 30, 2015
GrowStrategically
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% Svc
% Parts
% Units & F&I
% o
f G
M f
rom
Par
ts,
Sal
es a
nd
Ser
vice
Low Focus on Major Unit Sales--->
4% of dealers greater than 80% Sales
12% of dealers less than 10% Sales
Percent of Total Store Gross Margin Contributed by Each Department58 Dealerships, $479 million in sales, January 2010 to August 2011
Ordered by Units + F&I Departments Contribution Margin Rate
High focus on Major Unit Sales
Grow Strategically
by
Hal EthingtonADP Lightspeed
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% Units & F&I
% Svc
% Parts
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f G
M f
rom
Par
ts,
Sal
es a
nd
Ser
vice
Low Focus on Parts Sales--->
1 dealer at 70% of Total Margin from Parts
5 Dealers less than 14% of Total Margin from Parts
<---High Focus on Parts Sales
Percent of Total Store Gross Margin Contributed by Each Department58 Dealerships, $479 million in sales, January 2010 to July 2011
Ordered by Parts Department Contribution Margin Rate
Grow Strategically
by
Hal EthingtonADP Lightspeed
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% Units & F&I
% Parts
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f G
M f
rom
Par
ts,
Sal
es a
nd
Ser
vice
Low Focus on Service Sales--->
1 dealer at 65% of Total Margin from Service
3 Dealers less than 10% of Total Margin from Service
<---High Focus on Service Sales
Percent of Total Store Gross Margin Contributed by Each Department58 Dealerships, $479 million in sales, January 2010 to July 2011
Ordered by Service Department Contribution Margin Rate
Grow Strategically
by
Hal EthingtonADP Lightspeed
Grow Strategically
by
Hal EthingtonADP Lightspeed
Average $ Parts Counter Ticket109 Dealerships, 19 months ended July 2011
$0
$50
$100
$150
$200
$250
$300
$350
$400
$450
6% of dealers over $200 per Ticket
6 % of dealers average $58 per Ticket
48% of dealers average $81 per ticket
40% of dealers average $144 per Ticket
<------ Dealerships ranked high to low ------>
Grow Strategically
by
Hal EthingtonADP Lightspeed
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10% of Dealers below 25% Gross Margin
Average Gross Margin % Parts Counter Tickets
109 Dealerships, 19 months ended July 2011
10% of Dealers above 60% Gross Margin
27% of Dealers between 40 – 60 % Gross Margin
53% of Dealers between25 – 40 % Gross Margin
<------ Dealerships ranked high to low ------>
Recast Ticket Count Avg Sale Avg GM $ Sales $ Margin $ Margin
Per Store
Low at Low 327,000 $ 58 29% $ 18,898,000 $ 5,403,000 $ 50,000
Low at High 327,000 $ 144 54% $ 47,251,000 $ 25,318,000 $ 232,000
Difference $ 87 25% $ 28,353,000 $ 19,915,000 $ 183,000
Recast Low Group at High Group Rates for Average Parts Ticket and Gross Margin %
(What If…?)
Or, $9,600 per month per store.
Session Title
Low stores, selling at the average rate of High stores, would (with no new customers) each produce
$9,600 More per Store Per
Month.
in Gross Margin for the 19 months.
Hmm…
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43.9
9.6
4.2 2.5 1.4
Av
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urs
pe
r R
O
7 Coastal Dealers, Ocean-going Vessels Avg 23.8 hrs/ro
15 inland dealers, top per-formers. Avg 6.1 hrs/RO
40 Mid-range inland dealers. Avg 3.3 hrs/RO 21 dealers at
2.2 hrs/RO
Average Hours per Repair Order84 Dealers, 132,000 Repair Orders, $82 million in Sales
January 2010 - August 2011
Grow Strategically
by
Hal EthingtonADP Lightspeed
RO Count Hrs/RO Lab Sales Lab $ GM $ GM/Store
Low at Low 37,327 2.2 $12,300,000 $6,745,000 $80,300
Low at High 37,327 6.1 $34,000,000 $18,700,000 $223,000
Difference 3.9 $21,739,000 $12,000,000 $142,000
Recast Low Group at High Group Rates for Average Hours sold per Repair Order
(What If…?)
Or, $7,500 per month per store.
Grow Strategically
by
Hal Ethington ADP Lightspeed
-
0.5
1.0
1.5
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2.5
3.0
0.6
2.5
1.2
0.7
0.4
Ra
tio
of
Pa
rts
to
La
bo
r
Oce
an G
oing
Dea
lers
20 top Dlrs avg ratio 1.7 : 1
36 Mid Dlrsavg ratio 1:1
20 Low Dlrsavg
ratio .59:1
Marine Dealers Parts to Labor Ratio84 Dealers, 132,000 RO’s, $82 million in Sales
January 2010 to August 2011
RatioPts to Lab
Lab Sales Parts SalesParts
MarginPts MarginPer Dealer
Low at Low .59 to 1 $10,500,000 $6,200,000 $2,500,000 $ 29,400
Low at High 1.7 to 1 $10,500,000 $17,900,000 $9,700,000 $ 115,000
Difference $11,700,000 $7,200,000 $ 85,700
Recast Low Group at High Group Rates for Parts to Labor Ratio on Repair Orders
(What if…?)
Session Title
Low Stores are currently selling 59¢ in parts for each $1 in labor. High stores are
selling $1.70 in parts for each Labor dollar.
If Low stores can improve to the High Store rate, they will sell $11.7 million more
in parts, and earn $7.2 million more in margin.
That’s $85,700 in 19 months per store, or $4,500
in margin per month.
Hmm.
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Mid Group31 dlrs, avg 13% GM
Low Group28 dlrs, avg 8% GM
<--- Dealership GM % from High to Low --->
Top Group20 Dlrs, Avg 23% GM
New Major Unit Gross Margin %94 Dealers, $365 million in Sales
January 2010 to August 2011
Grow Strategically
by
Hal EthingtonADP Lightspeed
Unit Count
Tot Sales Tot CGS Tot Margin GM %
Low at Low 7,653 $98,200,000 $90,600,000 $7,600,000 7.8%
Low at High 7,653 $118,300,000 $90,600,000 $27,700,000 23.4%
Difference $20,100,000 $20,100,000
Recast Low Group at High Group Rates for New Major Unit Gross Margin
(What if…?)
Per Dealership Gross Margin up $11,200 per Month
Low stores, selling at the average rate of High stores, would (with no new customers) each produce
$11,200 More per
Store
in Gross Margin each month.
Session Title
Do the math…
In Parts, from improvement in Average Ticket and Gross Margin %, you get
$9,600 more Margin
Per month
Grow Strategically
by
Hal EthingtonADP Lightspeed
Grow Strategically
by
Hal EthingtonADP Lightspeed
In Service, from improvement in Hours per RO and Parts to Labor ratio, you get
$4,500 more Margin
Per month
Grow Strategically
by
Hal EthingtonADP Lightspeed
In Major Units, from improvement in Gross Margin %, you get
$11,200 more Margin
Per month
Grow Strategically
by
Hal EthingtonADP Lightspeed
Do The Math:
Parts $ 9,600Service 4,500Unit Sales 11,200
Total Store: $ 25,300
In additional Gross Margin per Month.
Session Title
…and take it home.Do the math,