2022

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Dealer Development profit

to labor rates than parts margins, though auto parts shortages in 2022 likely didn’t help.

In 2022, the building blocks within the mix of business changes made throughout the year showed up rather profoundly.

The average sales dollars per invoice increased to $348 per invoice, a 13% lift. Gross profit dollars per invoice cruised to $181 per invoice, a 14% lift.

All told, the total gross profit percent for members of the Dealer-to-Dealer Development Group jumped an entire percentage point from 51% to 52%.

While a 1% change in gross profit percent may not sound like much, it’s a huge shift when taking into consideration the average spread across 300 locations.

Also consider that the average sales per location for a member of our group came in at $2.62 million, a 5.2% lift year over year.

Altogether, on average, that 1% gross profit lift gave members an additional $150,000 per location to play with. That average was with almost all members seeing significant improvements.

So how did our members spend those extra dollars? Whether by choice or force, pay rates increased — and thankfully so.

We benchmark payroll as a percent of gross profit — not sales or labor.

We view team members as the most important and significant piece of any tire dealer’s business. It just makes good sense.

In 2022, we saw the average payroll percent of gross profit remain relatively flat, indicating that those additional gross dollars we discussed earlier landed in team members’ pockets, as they should.

From a non-payroll operating expense perspective, we saw some operational discipline even in the face of inflation, as a percentage of sales that was quite flat year over year, coming in at 20% of sales.

This is a healthy equation for a healthier net line — and that’s exactly what happened.

While the markets over the past few years have given us plenty to wonder about, most of us — certainly those who are utilizing the strength of other independents around them to help build their businesses — proved that 2022 was a really solid year for the independent tire dealer.

Here’s to making 2023 the best it can be! ■