100% Absorption

What is 100% absorption? I looked up in Wikipedia and found that it has more to do with atoms than dealerships. To a dealer owner, absorption is something quite different. Dealers call it a percentage of total running costs by fixed operation income. That means, the higher the better. Parts and service should be able to support the entire dealership.

Sales income becomes gravy. So why when sales are down, dealers panic? It’s because dealers do not have a good absorption rate. Too much overhead can kill your absorption rate.

When a dealership achieves a 100% absorption rate, they are essentially bullet proof from car sales dips.

How do you achieve your 100%?

George Bailey and Henry Potter used social networking

It has occurred to me that this social networking is not new. There is just new technology. Back in the day, 1947, there were people. And people knew people. Many times they were friends. You could count on each other recommending another friend. This network was usually limited to the distance your car could go on one tank of gas. George Bailey from “It’s a Wonderful Life” used social networking to help friends. George was honest and everyone knew it.

Henry Potter was also into social networking. Elite social network helped him control the peasants of his ghettos. His tool was a telephone. His social network was much larger and could crush George at anytime. If George had a better network, Henry would not have been able to push him around.

Today, the level of information at each person’s fingertips could easily bring Mr. Potter to his… chair. The invention of social networking is as old as flame. The marriage of Technology and “word-of-mouth” created this phenomenon. We all know everything, faster then we can decipher it.

DealerNERD to open 2/20/2010

I think I understand the basics of setting this WordPress up. I don’t have a following yet so we will see what happens Saturday.

Registration is open, if you are an IT janitor at a dealership, let me know. You will be given elevated rights, since this is our page.

Vendors, I will honor a log in but any advertisements will be removed. If you are looking to place an ad, please contact me.