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3 min read

4 Reasons Dealerships Should Be Leveraging Fixed Ops to Diversify Their Revenue Stream

4/13/23 1:16 PM


In the highly competitive automotive industry, diversifying revenue streams is crucial for dealership success. While new vehicle sales are often the main focus, fixed operations (Fixed Ops) can be a key revenue source that dealerships can leverage to create a stable and consistent income stream.

By maximizing the potential of Fixed Ops, dealerships can reduce their dependency on new vehicle sales and create additional revenue streams. Here are some reasons why dealerships should consider diversifying their revenue stream by leveraging Fixed Ops.


1. Steady and Consistent Income

Unlike the fluctuating nature of new vehicle sales, Fixed Ops provide a steady and consistent income stream for dealerships. Vehicle owners require regular maintenance and repairs, which creates a recurring business opportunity for dealerships. By building a loyal customer base and providing quality service, dealerships can establish a reliable source of revenue that can help offset any fluctuations in new vehicle sales.


2. Higher Profit Margins

Fixed Ops generally have higher profit margins compared to new vehicle sales. Parts sales, accessories, and service labor charges can contribute significantly to a dealership's bottom line. By focusing on upselling and cross-selling opportunities in Fixed Ops, dealerships can increase their profit margins and overall profitability.


3. Customer Retention and Loyalty

Fixed Ops play a crucial role in building customer retention and loyalty. When customers have a positive experience with maintenance and repairs at a dealership, they are more likely to return for future services and recommend the dealership to others. Building a loyal customer base can lead to long-term revenue generation and increased customer lifetime value.


4. Diversification and Risk Mitigation

Relying solely on new vehicle sales can be risky as it is subject to market fluctuations and changing consumer preferences. Diversifying revenue streams with Fixed Ops can mitigate risks and create a balanced income portfolio for dealerships. This can provide stability during economic downturns or when there is a slowdown in new vehicle sales.


In all, diversifying revenue streams by leveraging Fixed Ops can be a smart strategy for dealerships to create a stable and consistent income source. By focusing on customer retention, upselling, and cross-selling opportunities, dealerships can increase their profitability and mitigate risks associated with dependency on new vehicle sales. Investing in the Fixed Ops department and providing exceptional service can yield long-term benefits and contribute significantly to a dealership's success.


Learn more about GSM’s Fixed Ops Marketing Solutions and Programs here.

Written by GSM

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