By: Myril Shaw - Dealer Profit Services
We are in the season of celebration. This has been a very different year – and for those of us in the recreational industry, it has mostly turned into a spectacular year…at least in terms of unit volume.
How has your profit been?
Not gross profit…that has almost certainly been up. Have you made as much profit as you could have on your F&I Profit?
"Oh, that…it doesn't really matter as long as we are making a solid profit", is a common response.
Well, let's look at some real numbers.
Here are some sample numbers – you can do the math to see what this could mean to you.
Let's say that you are selling $10M per year in unit sales. Are you making $400K on your F&I Profit (Net – after salaries and other costs)? Oh, you don't know – well go dig in and look. The odds are that you are not.
If you are a $5M unit sales store, then you should be doing better than $200K of F&I Net Profit.
These are not numbers that you typically spend a lot of time looking at. You should! You are probably making a Net Profit on your Unit Sales (absent F&I) of just 3% or a little more. You could be doubling that Net Profit with the right F&I practices.
Wouldn't you like to be even merrier next year at this time? Wouldn't you like to double your net profit? Well, you can!
It starts early. Make the fact that you offer financing visible on your website, at your store, in your advertising. Everyone needs to know that you are a one stop shop when it comes to buying and financing.
Introduce F&I early, although not by that name. F&I has lost luster through automotive. Rename F&I as Business or Delivery and introduce them to your customer BEFORE the shopping process even starts – let your customers know that these are folks that will make their lifestyle experience happen and that they will be talking to them once they have decided on the unit of their dreams.
Train your F&I folks (okay, Business Managers or Delivery Coordinators) in the two basic premises of F&I best practices:
• The Hypocratic Oath of F&I – First do no harm – No matter what, never cost the sale
• You never get more than what you ask for the first time – Always try to maximize profit while having a graceful (not just "Oh, okay, I'll back down") plan and conversation about backing away from the maximum in mind and ready
100% Turnover is the big thing in maximizing profit. Every customer, every time, gets introduced to your Business Manager (okay, F&I Manager renamed) so that they have the opportunity to switch to finance and then to purchase protective products. You'll never achieve your goals without 100% turnover.
Do you want a merrier New Year? We will toast to that! Follow the guidelines that we have laid out and you will be oh so jolly next year!
Dealer Profit Services - Driving Profit Through Fun and Inspiration
Dealer Profit Services, LLC can help you achieve F&I excellence - no matter where you are in the development and/or maturity of your store or stores F&I success model. As the industry's best Finance Solutions Provider and the only one to take your customer to Fun and Inspiration with a Free and Idyllic lifestyle through F&I, thus driving industry-leading levels of F&I profit, Dealer Profit Services can and will equip you with what you need to take that next step in your F&I success - regardless of what that next step might be. Whether you want someone to help you take over take over your F&I and with our experienced personnel just help you drive profit to your store, provide help to you some of the time, need some quick advice, or just provide F&I Training/Consulting, we are here to help you. If you are not fully equipped with all of your Compliance Manuals and Training, Dealer Profit Services can do that too. Contact us anytime at info@dealerprofit.com or give us a call at (470) 326-0966.
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