Unproductive Expense: The Silent Killer of Store Profitability
Payroll Without Performance
It’s easy to spot the big problems.
The used car that aged out.
The front-end gross that came in too thin.
The F&I manager who missed back-end product on five straight deliveries.
But what most General Managers miss — or worse, tolerate — is the slow bleed that lives in plain sight.
It’s called unproductive expense.
And if you don’t find it, measure it, and kill it…
it will quietly drain the life out of your store’s net without ever showing up in a memo.
What Is Unproductive Expense?
Unproductive expense isn’t just waste.
It’s anything that:
Costs money
Consumes time
Occupies headcount
—without producing an equal or greater return in sales, service, retention, or brand value.
It hides in line items.
It hides in people.
It hides in process.
And it survives because GMs are often too busy chasing top-line growth to spot bottom-line erosion.
Where It Lives
Here are just a few of the most common places I’ve seen unproductive expense hide in a dealership:
1. Underused Software Subscriptions
That CRM add-on you bought but never implemented.
The video tool that only two salespeople use.
The SEO package that delivers reports but not leads.
If it’s not being used daily — and producing measurable value — it’s not a tool.
It’s an invoice.
2. Low-Yield Marketing Spend
Are you spending money on platforms that no longer drive traffic?
Have you matched your digital strategy to actual buyer behavior?
Are your vendors earning their check — or just updating their decks?
Unproductive marketing isn’t just about poor ROI.
It creates noise. It pulls attention. It burns time.
3. Payroll Without Performance
Every GM has faced this:
A department or individual that’s “been here forever,” but isn’t driving results.
Unproductive labor isn’t just a financial issue.
It’s cultural.
It tells your top performers that performance doesn’t matter — tenure does.
You can’t scale excellence if mediocrity pays the same.
4. Processes That Protect Comfort, Not Conversion
Do you have systems in place that serve no purpose but tradition?
Is your recon loop tighter than your sales follow-up strategy?
Process without performance is just delay.
And delay costs gross.
Why It’s a GM’s Job — Not Just the Controller’s
You might think this is a finance issue. Or an ops issue. Or something that’ll get sorted out during the next budget review.
It’s not.
It’s a leadership issue.
Because culture doesn’t form from what you say.
It forms from what you fund.
If you allow dollars, time, and energy to be spent on things that aren’t producing — your team will learn to do the same.
And worse: your future leaders will think that’s how the game is played.
The Hidden Cost of “Leave It Alone”
Every time you let a small, unproductive expense slide, you’re doing more than burning margin.
You’re signaling that discipline is optional.
That’s how standards drop.
And when standards drop, the store stops growing — even if the numbers look fine for a while.
Because margin hides a lot of sins…
until it doesn’t.
The Fix: Run a Net-First Operation
This doesn’t mean you cut aggressively.
It means you lead with intentionality.
Here’s what I challenge every GM to do once per quarter:
Walk your pay plan vs performance. Who’s getting paid without producing? Why?
Audit your tools. If it’s not used or measurable, it’s cut.
Review your ad budget with your gut off. Don’t defend what hasn’t converted.
Ask every department manager one question: What are we doing out of habit that no longer helps?
And then make a decision.
Because nothing slows down a great store faster than dragging dead weight through a growth plan.
Final Thought
You don’t build great stores with hype.
You build them with focus.
The best-run dealerships don’t tolerate unproductive expense — they eliminate it.
Because the moment you start defending inefficiency, you stop leading.
And for a General Manager, that’s the beginning of the end.