• September 2, 2016 at 1:25 pm #64934

This series includes 24 Key Numbers. If you work on getting all of them in the ranges mentioned, your shop should be solidly profitable.

Key Numbers 101 Series – Key # 2 Parts Cost

For this key number we want to know what percent of total sales is spent on parts.

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%.

There is a fill in the blank form for this number in our Business Calculators area available to Premium Members.

Definitions:

Cost of parts: Includes the cost of all types of parts, shop supplies and tires if we are looking at a typical independent shop where tire sales are less than 5% of total sales. (Tire shops and others selling a large number of tires should deduct tire sales before doing the calculation.)

Total sales: Includes all parts, shop supplies, labor, sublet and tires.

#autoshopcostofparts

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