The worst place to sell new units in the United States?
It’s really a bad line of thinking, but I’ll go there anyway simply because of its interest value.Where in the United States is it truly the worst place to be selling new units if you’re a metric dealer right now? It’s the West, and oh by the way, that doesn’t include California.
You see, for Powersports Business’ upcoming 2009 Market Data Book, our annual compilation of industry data, we’ve asked our friends at ADP Lightspeed to look at gross margin percentage on new units for both metric and V-twin dealerships.
For this study, ADP Lightspeed was able to examine data from more than 400 dealerships and then break the data up into six regions, including the Midwest, Northwest, Northeast, South, West and California.
The results were certainly compelling and unfortunately I can’t give them all away now. However, I can tell you that metric dealers in the West, in terms of their average gross margin percentage, were by far the worst, in fact more than twice as bad as those in the Northeast.
What was the average gross profit margin in the West? Throw out some guesses on this blog and if anybody comes close, I’ll come clean with the details.
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By Eric Neuer, July 16, 2009 @ 1:06 pm
I figure if it is worse than the Northeast (where I am) it would be less than 6 percent. I’d love to know how to make it more, or if I am even close.
Thanks, Eric
By Kimberlee Love, July 16, 2009 @ 1:37 pm
I’m going to take a wild guess – 9.6 percent – at the average GP margin in the West. But, hey! Does this include just new or new/used??
By JAMI SUMMEY, July 16, 2009 @ 3:43 pm
$630 IS MY GUESS
By Neil Pascale, Editor - PowerSports Business, July 17, 2009 @ 6:11 am
I’ll wait until the end of today to answer, but in reference to Kim’s good question: we’re referring to only new units now.
By Jeffrey Smith, July 17, 2009 @ 6:28 am
I’m guessing their selling them at cost to reduce inventory. So I guess their margains are holdback 5 percent if they are a Honda dealer, 4 percent for others.
By Neil Pascale, Editor - PowerSports Business, July 17, 2009 @ 2:36 pm
To end the drama … Eric was right. Slightly south of 6 percent.