Key #2 Parts Cost
Category: Costs
For this key number, we want to know what percent of total sales is spent on parts.
Highlight
Last month Acme Auto had total sales of $50,000.
Total cost of parts that were sold during the month was $11,000.
$11,000 ÷ $50,000 = 0.22
So, our key number is 22%
When looking at this number for a typical independent shop which is solidly profitable, this number will normally run between 21% and 24%.
Definitions
Cost of parts:
Includes the cost of all types of parts, shop supplies and tires when looking at a typical independent shop where tire sales are less than 5% of total sales. (Tire shops and others selling many tires should deduct tire sales before doing the calculation.)
Total sales:
Includes sales of all parts, shop supplies, labor, sublet, and tires.