Digital Dealer - October 2019 - 15
CHART 1
EXPENSE CATEGORY COST REDUCTION - NEW PROFIT OPPORTUNITIES
Below are some examples of supplies, services and processes where pricing was successfully
reduced and will generate new profits in the coming year.
Annualized
Savings - New
Profits
Area
Group Size
Expense Category
Strategy
West
8 stores
Shop Supplies
Quote and renegotiate, leverage to
one of the incumbent suppliers
$120K +
South
3 stores
Detailing Services
Renegotiate with incumbent supplier
$95K
East
10 stores
Small Package
Transportation
Use of new freight forwarder
$150K
Midwest
24 stores
Office Supplies
Requote with incumbent supplier
$90K
East
5 stores
Managed Print -
Copiers
Quote, new replacement equipment,
central printing
$130K
West
35 stores
P-Card
Altered existing
payment process
$170K
Midwest
6 store
Uniforms and Laundry
Purchased floor mats instead of leasing $90K
East
14 store
Lubricants
Leveraged to single source, brought in
unbranded bulk oils
$495K
Southwest
6 store
Utilities
New quotes for unregulated markets
$108K
expense categories to keep
their dealership(s) running.
Quoting and negotiating
with suppliers on a scheduled basis is always the
best way to find the "truth"
in the marketplace relative
to pricing and costs. Below
are some examples of
supplies, services, and processes where pricing was
successfully reduced and
will generate new profits
in the coming year. (See
Chart 1)
AUDIT & RECOVERY
OPPORTUNITIES -
FOUND PROFITS
Dealers pay fees for
health insurance, utilities,
DMS, taxes, etc. that are all
subject to over-payments.
Some suppliers charge for
services that you may not
have received. The examples on Chart 2 (see next
page) are dollars recovered
and new-found profits for
the respective organizations.
WHAT PREVENTS
DEALERS FROM USING
A CENTRALIZATION
STRATEGY?
Why haven't the majority of dealers across the
country already centralized
their purchasing or spend
management functions?
Why are they letting big dollars slip through the cracks
and minimizing their own
profitability?
There are numerous answers to this question that
apply across all brands, all
geography, and all sizes of
groups, from single points
to mega-groups.
1. GMs are incented on
profits, so they are trusted
to make the best supplier
decisions.
2. Groups are reluctant
to push GMs and locations
to leverage fewer suppliers
with better pricing because
D I G I TA L D E A L E R . C O M
they don't want to interfere
with profitable operators.
3. Many dealers know
they should centralize and
adopt a new approach but
feel they don't have the
time to do so with lean
staffing levels.
4. If internal employees
sense management is
squishy about this centralization strategy, they
will push back and find
countless reasons to resist
change and derail sensible
changes that move the
profit needle in a positive
direction.
Continued on pg. 16
OCTOBER 2019
15
http://www.DIGITALDEALER.COM
Digital Dealer - October 2019
Table of Contents for the Digital Edition of Digital Dealer - October 2019
Digital Dealer - October 2019
A Message from the Show Director
Stop This Leadership Foolishness
Build & Develop the Right Team — Your Success Depends on It
Evolution Revolution: A Word to Successors
Could You Use Another 1 percent in Net Profits This Year?
Budget – We Don’t Need No Stinkin’ Budget
DMS Conversion: Careful Planning & Management Are Essential
Interview with Monument Chevrolet
Digital Retailing Online Experience Versus In-Store Experience
10 Social Media Tips for Salespeople
Defining Your Advertising Target Is Your Best Brand Strategy
4 Secrets for Google My Business Success
How to Know if Your SEO Investment Is Paying Off
“Look, it’s not Rocket Science” By Anthony J. TaCito
A Balanced Approach to Customer Experience
The Power of Words
Value Is Important… So Are You Charging Too Much?
Digital Dealer - October 2019 - CT1
Digital Dealer - October 2019 - CT2
Digital Dealer - October 2019 - Digital Dealer - October 2019
Digital Dealer - October 2019 - Cover2
Digital Dealer - October 2019 - 1
Digital Dealer - October 2019 - A Message from the Show Director
Digital Dealer - October 2019 - 3
Digital Dealer - October 2019 - Stop This Leadership Foolishness
Digital Dealer - October 2019 - 5
Digital Dealer - October 2019 - Build & Develop the Right Team — Your Success Depends on It
Digital Dealer - October 2019 - 7
Digital Dealer - October 2019 - 8
Digital Dealer - October 2019 - 9
Digital Dealer - October 2019 - Evolution Revolution: A Word to Successors
Digital Dealer - October 2019 - 11
Digital Dealer - October 2019 - 12
Digital Dealer - October 2019 - 13
Digital Dealer - October 2019 - Could You Use Another 1 percent in Net Profits This Year?
Digital Dealer - October 2019 - 15
Digital Dealer - October 2019 - 16
Digital Dealer - October 2019 - 17
Digital Dealer - October 2019 - Budget – We Don’t Need No Stinkin’ Budget
Digital Dealer - October 2019 - 19
Digital Dealer - October 2019 - DMS Conversion: Careful Planning & Management Are Essential
Digital Dealer - October 2019 - 21
Digital Dealer - October 2019 - 22
Digital Dealer - October 2019 - 23
Digital Dealer - October 2019 - Interview with Monument Chevrolet
Digital Dealer - October 2019 - 25
Digital Dealer - October 2019 - 26
Digital Dealer - October 2019 - 27
Digital Dealer - October 2019 - 28
Digital Dealer - October 2019 - 29
Digital Dealer - October 2019 - 30
Digital Dealer - October 2019 - Digital Retailing Online Experience Versus In-Store Experience
Digital Dealer - October 2019 - 10 Social Media Tips for Salespeople
Digital Dealer - October 2019 - 33
Digital Dealer - October 2019 - Defining Your Advertising Target Is Your Best Brand Strategy
Digital Dealer - October 2019 - 35
Digital Dealer - October 2019 - 4 Secrets for Google My Business Success
Digital Dealer - October 2019 - How to Know if Your SEO Investment Is Paying Off
Digital Dealer - October 2019 - 38
Digital Dealer - October 2019 - 39
Digital Dealer - October 2019 - “Look, it’s not Rocket Science” By Anthony J. TaCito
Digital Dealer - October 2019 - 41
Digital Dealer - October 2019 - A Balanced Approach to Customer Experience
Digital Dealer - October 2019 - 43
Digital Dealer - October 2019 - The Power of Words
Digital Dealer - October 2019 - 45
Digital Dealer - October 2019 - Value Is Important… So Are You Charging Too Much?
Digital Dealer - October 2019 - 47
Digital Dealer - October 2019 - 48
Digital Dealer - October 2019 - Cover3
Digital Dealer - October 2019 - Cover4
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