Analysis Of Pete’s Cheap Car Sales And Recommendations For Increased Profitability
- December 21, 2023/ Uncategorized
Analysis of Stagnating Profits
“Pete’s Cheap Car Sales”, is a small second-hand car yard situated in Melbourne, Victoria. This small business consists of not more than four employees and facing a downward slope in their business activities. The purpose of this report is to analyse the performance of this business in regards to its profitability level, as well as staff performance, in order to help this business in achieving their goals of increased profits and reduced vehicle turnover time. In this report, the staff performance is also analysed as one of the senior salesperson has announced retirement so a junior salesperson will be promoted in that place. This report will help to understand the current situation of the business so that recommendations can be provided to make necessary changes in their business.
Analysis regarding the stagnating profits and review of sales staff
Analysis on the stagnating profits
From the given sales data of January to June 2018, the analysis has been carried out to find the total sales value of cars based on the manufacturing year. The table below represents the total value of cars sold as per the year:
|
Year |
Fleet |
private/retail |
Grand Total |
|
2004 |
$ 4,500.00 |
$ 4,500.00 |
|
|
2005 |
$ 3,500.00 |
$ 4,700.00 |
$ 8,200.00 |
|
2006 |
$ 3,500.00 |
$ 3,500.00 |
|
|
2008 |
$ 45,000.00 |
$ 45,000.00 |
|
|
2009 |
$ 29,300.00 |
$ 47,000.00 |
$ 76,300.00 |
|
2010 |
$ 73,052.00 |
$ 75,200.00 |
$ 148,252.00 |
|
2011 |
$ 98,800.00 |
$ 98,800.00 |
|
|
2012 |
$ 16,500.00 |
$ 153,499.00 |
$ 169,999.00 |
|
2013 |
$ 53,298.00 |
$ 78,649.00 |
$ 131,947.00 |
|
2014 |
$ 91,450.00 |
$ 164,250.00 |
$ 255,700.00 |
|
2015 |
$ 281,309.00 |
$ 575,406.00 |
$ 856,715.00 |
|
2016 |
$ 648,518.00 |
$ 1,293,925.00 |
$ 1,942,443.00 |
|
2017 |
$ 1,012,288.00 |
$ 1,825,386.00 |
$ 2,837,674.00 |
|
2018 |
$ 280,749.00 |
$ 623,288.00 |
$ 904,037.00 |
|
Grand Total |
$ 2,493,464.00 |
$ 4,989,603.00 |
$ 7,483,067.00 |
In the above analysis, it has been identified that cars manufactured in 2017 were being held more in the caryard and that that too it was Private/Retail type vehicles.
Analysis on the review of sales staff
In this analysis, the total profit achieved by the individual salesperson has been calculated. The table below represents the value of total profit generated by the four salesperson:
|
Salesperson |
Total profit |
|
SALES001 |
$ 259,234.00 |
|
SALES002 |
$ 261,091.85 |
|
SALES003 |
$ 400,926.10 |
|
SALES004 |
$ 104,607.50 |
|
Grand Total |
1025859.45 |
The above analysis depicts that salesperson “SALES003” (Jules Ng) has the most total sales with a value of $ 2,567,337.00.
Results of the Analysis
Results from analysis on the stagnating profits
The analysis being carried out with respect to the stagnating profits demonstrates that most of the cars which were being held in the caryard for more duration is manufactured in the year 2017 and that too those were of Private/Retail types. This means that the popularity of the Private/Retail types is less than the Fleet type cars. However, the most sales was achieved from the cars of 2017 year that is $2,837,674.00. From the count of vehicles being held in caryard, it has been determined that there is less demand from private/retail customers about $ 4,989,603.00 but the total sales was higher as compared to Fleet customers. Hence, it is recommended that the business should focus more on private/retail customers.
Results from analysis on the review of sales staff
From the analysis on review of sales staff, it has been identified that the salesperson “Jules Ng” is the most suitable salesperson for the position of senior salesperson. Jules Ng is considered appropriate for the promotion as the analysis shows “SALES003” has the most count of vehicles sold and it contributes to most of the sales being done by the business.
Discussion regarding other factors
The other factors that has to be taken into consideration before making final decision for the staff promotion is the behavior and other competitive skills. The technical skills along with the loyalty of that staff have to be analyzed and evaluated prior to promotion. The sales figure should not be considered as the single criteria for promoting to senior salesperson.
Conclusion
From the overall analysis from the provided sales data of “Pete’s Cheap Car Sales”, it has been identified that the main reason behind stagnating profits is sitting of certain cars in the car yard for longer periods of time. The review of staffs with respect to the total sales and count of vehicles being sold demonstrates that Jules Ng is the most suitable person for promotion to senior salesperson.
Recommendations
- The focus should be given on fleet customers so that the cars could be sold at increased rate and there is no stock overflow in the car yard.
- The sales figure only should not be considered while promoting the staff.
- The purchase of the vehicles from auction should be done more of latest vehicles rather than old make and model.
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