SUCCESSFUL P&A INVENTORY MANAGEMENT

2. SUCCESSFUL P&A INVENTORY MANAGEMENT Presented by: STEVE JONES

3. WELCOME! • Who is Steve Jones? • Started in dealerships 100 years ago • Worked in most dealership positions • Rider/racer (20 years of broken bones) • Worked for OEs as a Field Tech Advisor and a DSM • Dealership on-site consultant and trainer • Write column for MPN mag and edit other GSA columns & articles • Senior Projects Manager for GSA SUCCESSFUL P&A INVENTORY MANAGEMENT

4. WELCOME! • Who is GSA? • Powersports consulting & training company • Dealership on-site assessments and training • Develop training solutions for all of the major powersports manufacturers • Conduct market research for industry clients • Largest provider of 20-group services in the powersports industry • Collect and analyze industry data • Keep current with best business practices • Over 30 years of experience in this industry SUCCESSFUL P&A INVENTORY MANAGEMENT

5. Current Benchmarks (Metric) • Road Signs to Profitability • Parts Gross Profit Margin 36% • Accessories & Clothing Gross Profit Margin 32% • Total P&A GP PVS $700 -800 • Personnel Exp. % of DGP 34% SUCCESSFUL P&A INVENTORY MANAGEMENT

6. Benchmarks (cont’d.) • Road Signs to Profitability • Monthly GP $ per Employee $10K + • % of Inventory Obsolete 15% or less • Parts Inventory Turns 4-5 • Access. & Clothing Inv. Turns 2-3 SUCCESSFUL P&A INVENTORY MANAGEMENT

7. Six Steps to Reducing Losses & Improving Profits • Stock what sells • Categorize it so you can measure it • Increase efficiency • Use bin locations • Reduce shrinkage & improve inventory accuracy • Implement cycle-counting • Control the inventory dollars • Implement an open-to-buy system SUCCESSFUL P&A INVENTORY MANAGEMENT

8. Six Steps (cont’d.) • Open-To-Buy Example SUCCESSFUL P&A INVENTORY MANAGEMENT

9. Six Steps (cont’d.) • Identify & control obsolescence • Slow-movers report • Non-movers report • Obsolete Parts, Clothing & Accessories don’t go up in value! • What options do you have for selling it? • 3D:Discount it, Donate it, Dumpster it • Turn this into fast-moving stock to increase your profitability SUCCESSFUL P&A INVENTORY MANAGEMENT

10. Six Steps (cont’d.) • Measure it so you can manage it: • % of inventory obsolete • Total inventory valuation • PC&A GP % (separate if possible) • Total GP $ PVS • Personnel expense % of DGP • GP $ per employee • PC&A inven. turn (separate if possible) • Compare YTD with previous year SUCCESSFUL P&A INVENTORY MANAGEMENT

11. Thank you!! Contact: Steve Jones 208-922-5995 steve@gartsutton.com www.gartsutton.com SUCCESSFUL P&A INVENTORY MANAGEMENT