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Today's economy is confusing and difficult to manage. Sales might be going up, but many dealers are seeing unnecessary costs rising, which lowers their profits.
In this article, we'll cover common sources of revenue leakage and strategies to plug the holes.
Margin compression is very real for most dealerships. As companies continue to consolidate, competition can be reduced, prices go up and a take it or leave it attitude can prevail with some suppliers - giving dealerships even more headaches to contend with.
Expense categories where supplier consolidations have occurred:
Most business organizations find themselves involved in cost reduction initiatives from time to time. To sustain an organization over the long term, cost reduction efforts need to become deeply ingrained in the business structure itself and that is usually accomplished through a Spend Management or Purchasing Department. Purchasing is typically charged with sourcing, quoting, negotiation, implementation and supply base management responsibilities including compliance audits.
