• September 14, 2011 at 1:36 pm#64079

    What is your target percentage for parts gross profit (also called margin…NOT markup)?

    _____ 30-35%

    _____ 35-40%

    _____ 40-45%

    _____ 45-50%

    _____ 50-55%

    _____ 55-60%

    _____ 60-65%

    _____ 65-70%

    AutomotiveManagementNetwork.com
    [email protected]
    616-340-2380

    September 15, 2011 at 6:50 pm#72305

    60-65 % We get 55-60% AVG

    update 11-15-11 50-55 new avg as of the last few months

    September 15, 2011 at 6:53 pm#72306
    the1tom
    Member

    We have a tiered parts matrix and measure the margin weekly. A week with an engine or transmission will generally drag down the percentage a bit. Overall we average 53%. A low week is 48% and a high week is 56%

    September 15, 2011 at 7:08 pm#72308
    nctransmission
    Participant

    Parts margin we shoot for is 40%

    with supply charges added in, we average 35%. we will mark down parts

    instead of labor because of the damned taxes.

    Overall I trade at 65% MARGIN on parts and labor.

    September 15, 2011 at 7:34 pm#72309

    I shoot for 50-55%. this year so far 51.5% down from previous years.more engine and trans jobs this year,and also buying more parts from the dealers because of quality, mostly engine sensors. What kind of profit margin on dealer parts is everyone getting.I am at 42%

    September 15, 2011 at 7:43 pm#72311
    nctransmission
    Participant

    Bruce, the dealers around here openly quote “List Price” to consumers,

    our markdown is 17%, meaning we make nothing on dealer parts. I use

    more labor charge to make up for a minimum blended repair order of 40%

    margin. If an RO is below that, I need to be involved.

    September 15, 2011 at 7:49 pm#72312
    jmauto
    Participant

    All parts excluding tires 53.5% to date this year. Target is 50-55

    September 15, 2011 at 8:09 pm#72313
    RobMusic
    Member

    We shoot for 45%. Average is around 42%. I believe industry standard is 45%. We do have a tough time with Dealer parts. Tires are between 25 to 35%. Batteries 30%.

    September 15, 2011 at 8:24 pm#72314
    roebigd
    Member

    We average 50-53%

    September 15, 2011 at 8:31 pm#72316

    55% parts

    35% tires

    September 15, 2011 at 11:09 pm#72317

    Our goal is 50+, but we usually manage 46-50.

    September 16, 2011 at 7:54 pm#72321
    gcauto
    Member

    We also use a tiered parts matrix. Our average is around 40% but I would certainly like to hit somewhere around 45-50.

    September 20, 2011 at 9:17 pm#72325
    the1tom
    Member

    Why does “list price” at a dealer make any difference to how you price your part? Why do you let some other company dictate what you need to charge to run your business? Ignore list price. Ignore it from dealers and ignore it from any aftermarket supplier. Use and trust your own price matrix. You will not get very many objections from customers. Don’t be scared.

    September 20, 2011 at 11:29 pm#72327
    pinfante
    Member

    So, to be clear…are you saying that if you have a 60% parts gross profit (margin), that your parts cost is 40%?

    September 21, 2011 at 11:33 am#72328
    Tom Piippo
    Participant

    I’m with you on that Tom. Not all dealers sell parts by MSRP, some make up their own matrix and then discount to us indy’s. For example, a local GM dealer suggests a bottle of AutoTrac II smurf oil cost 9, list 12,an out of town dealer will sell at 6, list at 9. Some dealers discount 15% off list, some give 30. I have argued with insurance companys and won on charging more than MSRP on OE parts from dealerships. I noted that if the dealership did the job, they get paid and make 50% on parts plus their inflated labor rate; I only need 40% on parts with a lower labor rate. I have never had a customer say “I can get this at the dealership for less!” although we have heard that about the local parts store.

    Parts is parts, and they all get marked up regardless of MSRP.

    Tom Lund wrote:

    > Why does “list price” at a dealer make any difference to how you price your part? Why do you let some other company dictate what you need to charge to run your business? Ignore list price. Ignore it from dealers and ignore it from any aftermarket supplier. Use and trust your own price matrix. You will not get very many objections from customers. Don’t be scared.

    September 21, 2011 at 4:58 pm#72330
    the1tom
    Member

    If you buy a hose clamp for .33 and sell it for 1.25, you have .92 of gross profit. .92/1.25 = 74% parts margin. If you buy a water pump for 30.25 and sell it for 63.74 you get a 53% parts margin. The 30.25 cost of the dealer part or the aftermarket part gets calculated the same.

    November 8, 2011 at 9:52 pm#72426
    northtown
    Member

    Hey Hey, now here’s a voice of reason. I’ve been saying this to anyone who will listen!

    November 16, 2011 at 3:54 am#72436

    Tom Piippo wrote:

    > I’m with you on that Tom. Not all dealers sell parts by MSRP, some make up their own matrix and then discount to us indy’s. For example, a local GM dealer suggests a bottle of AutoTrac II smurf oil cost 9, list 12,an out of town dealer will sell at 6, list at 9. Some dealers discount 15% off list, some give 30. I have argued with insurance companys and won on charging more than MSRP on OE parts from dealerships. I noted that if the dealership did the job, they get paid and make 50% on parts plus their inflated labor rate; I only need 40% on parts with a lower labor rate. I have never had a customer say “I can get this at the dealership for less!” although we have heard that about the local parts store.

    >

    > Parts is parts, and they all get marked up regardless of MSRP.

    >

    >

    > Tom Lund wrote:

    > > Why does “list price” at a dealer make any difference to how you price your part? Why do you let some other company dictate what you need to charge to run your business? Ignore list price. Ignore it from dealers and ignore it from any aftermarket supplier. Use and trust your own price matrix. You will not get very many objections from customers. Don’t be scared.

    We are hearing “the dealer is less on parts”. VW and Audi dealers are using OEM parts from worldpac. I find it hard that VW and Audi are letting the dealers get away with it.. The invoice just has a xx at the end of the part # and in small print on the back of the invoice it states parts ending with xx are OEM like most custmers even understand OEM.

    So if we quote at MSRP we can be higher than the dealer if the job does not have a lot of labor in it.

    November 16, 2011 at 3:27 pm#72440

    So far this year we are 45.26% profit margin.

    November 16, 2011 at 11:06 pm#72441
    RonHaugen
    Member

    55 to 60% for all. I’m not understanding the issue with dealer parts, we too use a lot of them. Set your parts sale price based off of cost and move on.

You must be logged in to reply to this topic.