After an NATDA Dealer Success
Group meeting last month, a dealer
asked me for help. They had two
questions for me.
• How could they handle
the current backlog
enforced by most trailer
manufacturers?
• How could they mitigate the
negative impact of a potential
loss of sales?
We talked about several things.
Ultimately, we came to the same
conclusion. There’s really very little
that can be done.
No, I’m not a pessimist. After 30 years
in business, I’ve just discovered you
shouldn’t worry about things you have
no control over. Instead, focus your
energy on things you do.
The situation is going to get worse
before it gets better. However,
at some point in the future,
manufacturers will beg you to help
them move an abundance of trailers.
Why? Because, capitalism will,
ultimately, work its magic.
Manufacturers will continue
to build out their capability to
meet demand. But, as dealers
are forced to go to a different
manufacturer to find a
more accessible trailer
supply, the market will
fill. With a full market, the
demand will drop, prices
will go down and some
manufactures that were
in the market will
cease to exist. One
manufacturer that
you thought wouldn’t
fail will. One that
you’ve never heard of
will begin their rise to
the top. This happens
not just in the trailer
industry, but every
business that has
ever existed in a free
market economy.
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The question isn’t what you can do.
Instead, it should be how to protect
your business as the market adjusts.
In the beginning, like lemmings over
the cliff, dealers will put in more
orders and manufacturers will make
delivery promises they can’t keep.
Customers who promise they will
wait, won’t, and dealers will end up
with inventory they can’t sell when
the overabundance takes place.
The most important thing you can
do is take a deep breath. Focus on
what you can control, which is service
and parts. With a demand for new
trailers that can’t be met by the
manufacturers, the need to repair and
service existing trailers will become
greater. If you haven’t considered the
huge dollars your shop can produce
and ways you can increase your
service capacity, now is the time to
focus on that.
One technician, at $80 an hour, can
produce $100,000 of gross profit in
labor and parts sales if your shop is
running at just 85%. At a 15% GPM on
trailers, you would have to sell over
$650,000 of new trailers to make the
same amount of money. If your shop
runs at 100%, you will need to sell
over $750,000 in new trailers to make
the same profit just one tech can
produce out of your shop.
I’m not advocating you stop selling
trailers. However, now is the time to
change your focus on what you can
control and stop worrying about what
you can’t.
NATDA Dealership
Performance Training program
includes online modules and
documented processes, so
dealers can improve every
aspect of their dealership –
from the parts department
to trailer sales. For more
information and to sign-up,
please contact NATDA at
727-360-0304.
NATDA Magazine www.natda.org