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The Importance of Analyzing the Cost of Each Sale

Not all vehicle sales are profitable, so it is important that dealers analyze the cost of each and every transaction. Many dealers fail to do this, usually because their business management systems don’t provide this information in a clear and useful manner.

This analysis is possible if dealers register all costs associated with the sale of each vehicle, and is performed by analyzing the reports generated by the dealer management system.

Selling a vehicle comes with many expenses, some obvious and some not so much: warehouse space, insurance, meetings between the salesperson and the prospect, taxes & fees, possible discounts, and even marketing actions should be measured. If these expenses are not recorded, we can never know the true revenue obtained from each sale.

When our staff gets accustomed to registering all the expenses that arise throughout the sales process, the Sales Manager can then know the profitability of each transaction, and can reach conclusions that will allow for the detection of errors.

What can the Sales Manager detect?

  • Unsold vehicles in stock that generate high warehouse and insurance expenses.
  • Investments in marketing that generate prospects that never translate into sales opportunities.
  • Generous discounts offered to customers so as to close the deal but that affect the profitability of the transaction.
  • Time spent in meetings between the salesperson and the prospect.
  • Maximum discount that can be offered based on the incentives provided by the OEM.

Key report to determine the profitability of a sales transaction

Autologica DMS provides a report that presents the true revenue of each sales transaction, allowing the dealer to compare the vehicle’s purchase value with its sale value. It includes all the additional expenses for that vehicle, and thus offers an accurate overview of the profitability of each sale.