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Improving Operating Expenses in a Powersports Dealership

Managing operating expenses in a powersports dealership requires focused attention on service productivity, parts efficiency, payroll control, floorplan management, and disciplined vendor oversight. By benchmarking key expense categories and tightening operational processes, dealerships can protect margins without sacrificing performance. Consistent review, smarter systems, and proactive decision-making turn expense management into a competitive advantage.

Written by

Brian Kane

Published on

February 19, 2026

Operating expenses are one of the most controllable levers in a powersports dealership. In a seasonal industry with high inventory costs and variable demand, disciplined expense management can be the difference between average performance and strong, sustainable results.

Where to Focus First

Service Department Productivity
Service is typically the largest profit lever. Improve technician efficiency through better scheduling, clear job stories, digital inspections, and strong quality control to reduce comebacks. Optimize shop layout so techs spend more time wrenching and less time walking.

Parts Department Discipline
Reduce obsolete inventory and tighten ordering practices. Use turn-rate reports, improve special-order accuracy, and adopt just-in-time ordering for slow-moving SKUs. Strong parts-to-service integration prevents lost labor time.

Payroll Management
Payroll is usually the largest controllable expense. Cross-train staff, use seasonal staffing models, and tie compensation to productivity. Automating administrative tasks can also reduce overhead without hurting performance.

Floorplan Control
Turn inventory faster and review aging weekly. Price aged units before expensive interest windows hit, and use OEM flooring assistance strategically.

Marketing Efficiency
Shift to targeted digital strategies and track cost per lead and cost per sale. Eliminate underperforming channels quickly and leverage CRM automation to nurture existing leads.

Vendor & Software Audits
Renegotiate contracts annually, consolidate vendors, and audit monthly statements. Many dealerships overspend on software, subscriptions, and processing fees without realizing it.

Process Standardization
Standardized sales processes reduce discounting. Clear SOPs reduce rework, improve inventory accuracy, and help new employees ramp faster.

Operating Expense Benchmarks to Monitor

Healthy powersports dealerships typically operate within these ranges:

Total Operating Expenses: 65–75% of gross profit
Net Operating Profit: 5–10%
Total Payroll: 35–45% of gross profit
Floorplan Interest: 1–3% of total sales
Marketing: 1–3% of total sales
Occupancy Costs: 8–12% of gross profit
Admin & General: 5–10% of gross profit

High-performing dealerships often operate leaner, closer to 60–65% total expense ratios.

The Bottom Line

Expense control is not about cutting blindly. It is about improving efficiency, increasing productivity, and eliminating waste. When dealerships manage service performance, parts discipline, payroll structure, inventory aging, and vendor contracts proactively, they protect margins and create stronger, more resilient operations.

Small operational improvements compound quickly. The dealerships that review their numbers consistently, benchmark against targets, and act decisively are the ones that stay ahead.