Plugging Profit Leaks to Keep Your Dealership Afloat in 2026

The heavy equipment dealership landscape is shifting fast, and the pressure is on. Inventory imbalances, tightening margins, labor shortages, and rapid digital disruption are forcing dealers to rethink how they operate. When the current storm passes, the dealerships that survive and thrive will look very different from those that came before.

The good news? You don’t need massive change to protect your bottom line. Most dealerships are already leaking profit in small, preventable ways across service, parts, sales, and overhead. Left unchecked, those leaks add up. Fixed strategically, they can become a powerful source of stability and growth.

This guide breaks down where profit leaks typically occur and how you can start plugging them today, so your dealership isn’t just prepared to weather the storm, but positioned to come out stronger on the other side.

Key Takeaways:

• Heavy equipment dealerships face many challenges, making efficiency and cost control critical for survival and future growth.

• Profit leaks across service, parts, sales, and overhead add up quickly, but small fixes can create meaningful financial impact.

• Service and parts become the profit backbone when equipment sales slow, offering stable revenue through labor, maintenance, and inventory management.

• Leveraging your DMS, automation, and team alignment is essential to reduce inefficiencies and weather the coming downturn.

Let’s dive into the details.

Current Heavy Equipment Industry Challenges

• OEMs have had an inventory surplus, or in some cases, an inventory shortage. 

• Commodity pricing is lower than it usually is for this time of year. 

• The shortage of skilled labor is ongoing.  

• Tariffs and trade wars are causing uncertainty and disruption within the marketplace.  

• Technology disruptors: The digitization of the industry and the corresponding expansion of the market is changing the business. Dealerships that aren’t utilizing digital tools like AI could miss out on opportunities. The customer service experience has changed, and customers rely on a new level of communication and online connectivity (e.g. ordering their parts online).  

With these challenges, you should be taking any opportunity to plug profit leaks across all departments at your dealership, so you can take on the headwinds.  

Plugging Common Dealership Profit Leaks

Each department has opportunities to help improve efficiency and profitability by plugging profit leaks. 

Service:

• Increase service work when machines sales decrease.  

• Are you rounding up each labor punch to the quarter hour? This can lead to extra hours per technician each month, which truly adds up. Pay attention to this.  

• Promote service maintenance plans.  

• Inspect every machine as it’s repaired to add billable lines.  

• Ensure your staff is aligned with the same goals (e.g., incentive plans).  

• Track every part that goes into your repair line. 

• Ensure all rental equipment is inspected for damage and repair as soon as it’s back at your dealership to offset costs to the renter.  

• Utilize the automated billing system in your DMS. 

Parts:

• Move deadstock and overstock between branches before ordering these same parts. 

• Perform regular cycle counts rather than annual counts.  

• Accurately track, bill and replenish any parts used in service trucks. 

Sales:

• Inspect all used equipment prior to providing trade-in value. 

• Incentivize the movement of older equipment.  

Overhead Items:

• Review your DMS bill to match user licenses and add-on products with your current needs. Ensure your bill matches your current needs! 

• Take a closer look at your operational contracts (e.g. lifts, hoists, oil disposal) to see where you can save costs. 

Teamwork is Essential:

To make it through the storm, it’s more than just dollars and cents; it’s about the people who can get the business through the tough times and onto the other side.  

Taking the time to have short daily meetings to bring your department’s team in for a few minutes can ensure everyone is aligned with the department’s goals and expectations to know where priorities lie. It opens the dialogue to ensure that everyone is being heard, problems are being addressed, and everything is on the right track to perform quality work and maintain your department’s efficiency to benefit the dealership.  

Dialogue on the service side has never been more important. Utilize a sales script at the parts counter.  

Conduct an audit on your services and parts customers to examine the overlap between these lists. If a customer buys parts, but isn’t buying service from you, it’s a good time to find out why they’re buying parts but not service.  

Make the Most of Your DMS:

Your DMS is a great tool for navigating the storm ahead and can help your business grow afterwards. Examine everything that your DMS has to offer. Take advantage of additional training, for all who use it at your dealership, to be aware of all that your DMS is capable of. Automate everything you can—from service scheduling to technician support in the field—in your service department to improve efficiency. Use your DMS to track key performance metrics for actionable insights to help make impactful business decisions.  

At the end of the day, there’s no silver bullet solution. It’s taking these ideas, taking a closer look at each department’s efficiency, understanding the industry trends and being aware of customer expectations that can help weather your business in the coming storm.    

Start Where the Impact Is Greatest: The Service Department

The service department remains one of the biggest opportunities for efficiency gains and margin improvement. Manual processes, disconnected systems, and delayed communication all create friction—for both staff and customers.

DIS Service 360: A Holistic View of Service Operations

Service 360 is designed to bring service activity into one cohesive view, helping dealers:

• Track service workflows more efficiently

• Improve internal coordination between departments

• Reduce administrative bottlenecks

• Deliver faster, more predictable service outcomes

Rather than being a “demo feature,” Service 360 represents a mindset shift: automate what can be automated so technicians and service teams can focus on higher-value work.

Learn more about Service 360 here.

Communication Is the New Competitive Advantage

Customer expectations have changed. Emails pile up unread, but text messages get answered in minutes. Customers now expect the same clarity, speed, and transparency from their equipment dealer that they get when ordering coffee or shopping online.

DIS Notify 360: Modern, Relevant Customer Communication

DIS Notify 360 enables proactive, timely communication with customers through modern channels such as text messaging. Its value lies in:

• Delivering real-time service updates

• Sending payment, pickup, or status notifications

• Reducing inbound calls by answering questions before they’re asked

The takeaway is clear: customers expect relevant updates at the right time, not radio silence.

Learn more about Notify 360 here.

Data That Drives Better Decisions

Dealers don’t suffer from a lack of data—they suffer from a lack of usable insight.

Dealer Analytics: Turning Information Into Action

Dealer Analytics tools help dealers:

• Identify inefficiencies across departments

• Track performance trends over time

• Make informed decisions backed by real operational data

Instead of reacting to problems after they appear, analytics allow dealers to anticipate issues, improve planning, and measure what truly matters.

Learn more about Dealer Analytics here.

Rental Operations Are Evolving Too

Rental departments are no longer side businesses. They are profit centers that demand structure, visibility, and efficiency.

RentHub: Simplifying Rental Management

RentHub, DIS’s newest product, focuses on modernizing rental operations by:

• Streamlining rental workflows

• Improving asset utilization

• Reducing administrative complexity

• Enhancing rental profitability

As customer demand for flexibility grows, rental systems must be as polished and responsive as parts and service systems.

Learn more about RentHub here.

Efficiency is the Way