in the Parts Department
it the function of the Parts
Department, basically, to provide parts for the Service Department?
If the answer
to this question is yes, then it isnít necessary to track, in great detail, the
profitability of your parts area. However, if you are selling a significant
amount of parts over the counter, and have a at least one part or full-time parts
department person, you should be tracking just how much this department is
contributing to the overall profit picture of the business.
After all floor
space, light, heat, telephones, etc. are being used.
In addition, the parts
inventory is costing you at least 8% per year, and this results in a lot of
money spent ($20,000 in inventory costs you
per year just taking up space).
mark-up on parts is probably the best of all the
products you have in your store. In some cases, you can make 100%, but remember,
you donít pay the light bill with percentages. I explained, in the Showroom
section, that percentages could be very misleading, when it comes to how much
youíre making. Take
a seventy-five cent gasket, that has a fifty-percent mark
up. You made thirty-eight cents, and that is before you subtract shipping and
Profits from the Parts Department should be an important contribution to the
business. I can demonstrate how to measure and increase the profits.
ignore the potential that exists and could be maximized with just a little
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