Regardless of market conditions, there are always opportunities

Yard & Garden, Sep/Oct 2009 by Wartgow, Gregg

Aren't you glad you're a servicing dealer these days as opposed to a lawn and garden manager for Home Depot? I mean, unless you have some sort of fondness for orange aprons, you're probably thankful for that any day of any year. But as of late, with more consumers looking to repair rather than replace, it sure is nice to have a parts and service operation to rely on.

And it's not just nice from a "keeping busy" standpoint. The effect on dealership profitability can be dramatic. Let's say you're a servicing dealer that does $1 .5 million a year in total sales. Statistics show that, in most instances, a dealer this size will see 60% of sales coming from equipment, and around 25% coming from parts.

Now let's say you earn an average 18% gross margin on equipment and a 40% gross margin on parts. If the current economy has caused your revenue mix to shift from 60/25 to 50/30, you're actually earning more profit dollars. And because you're likely performing more service than in typical years, you're making additional profit there.

That's why this issue of Dealer Success Guide has a strong emphasis on parts and service. There are tips on how to become more efficient, improve communication and increase add-on sales. There's also an article on how to get tougher on collections, because in economies such as this one, latepaying customers typically grow in number for just about any service business.

It's also important to remain upbeat in economies like this. You want to become a more valuable partner and resource for your customers, especially commercial cutters. You need to make good use of your marketing dollars. And more than ever, it's enormously helpful to become active in your community. You can read all about these topics in this volume of Dealer Success Guide, as well.

And don't forget, there are tons of great tips and advice in each of the previous 18 volumes, which are available for free download at YardnGarden. com. Have at it!

Gregg Wartgow

Yard & Garden Magazine

1233 Janesville Ave.

Fort Atkinson, WI 53538

800-547-7377 xl614 * 920-328-9011 (fax)

Gregg.Wartgow@cygnuspub.com