What is the most effective way to measure your dealership's profitability?

In my experience, I have observed that achieving a common goal among all departments is crucial for success. While the dealers excel in cost cutting and revenue streams, there is room for improvement in time management, inventory management, and calculating the cost of lost opportunities. By focusing on these areas, dealers can enhance their profitability and overall performance.

I like net to Gross , it’s easier for managers to understand. Give me 35% net to gross and I’ll have a nice smile on my face . Putting managers on net pay plans for their departments helps too.

How to measure your dealership's profitability. NET Profit to Sales is a great way. 5% net to sales in the Dealership world is pretty good.

How much it actually costs to bring in a qualified lead. Big difference between a qualified lead and an inquiry. Then it comes down to your sales process. What is your QL to sale closing ratio. Anything under 10% should be unacceptable to a dealer.

The 4-most effective way to measure your dealership's profitability are:- 1. Gross Profit Margin: Calculate the gross profit margin by subtracting the cost of goods sold (COGS) from the total revenue generated from vehicle sales. 2. Net Profit Margin: Determine the net profit margin by subtracting all operating expenses, including overhead costs, salaries, and marketing expenses, from the gross profit. 3. Inventory Turnover: Measure the efficiency of inventory management by calculating the inventory turnover ratio. 4. Customer Lifetime Value (CLV): Calculate the average profit earned from a customer over the entire duration of their relationship with the dealership.

Desde una perspectiva de eficiencia y productividad si considero un ratio de gran relevancia que proporciona información para la toma de decisiones a la hora de invertir ya sea en activos o inventario. Identificar correctamente aquellos activos que generan mayor valor a la organización para continuar en la búsqueda de mejora y mantener las eficiencias de la empresa.

Para crecer se requiere de apalancarnos con los diferentes instrumentos que el mercado nos ofrece, sin dejar de lado la rentabilidad que generamos con los fondos propios. Para obtener un apalancamiento financiero debemos demostrar la capacidad de gestion que tenemos con los fondos propios y la rentabilidad que generamos con ella, de ahi parte la solvencia en poder gestionar o administrar mayor capital. Según como se encuentre el mercado y teniendo en cuenta los objetivos que tenga la organización es mas rentable contar con capital prestado para aumentar la rentabilidad de la empresa.