• 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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