KPI Guide - Parts Department

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Sales Mix %

Calculation: Total Sales of Type1 ÷ Total Parts Sales

What does it measure: The contribution of each sales type towards the total sales of the parts department.

Why is it important: This is useful as some sales types are more profitable than others - see Gross Profit % Sales. As such, a mix that focuses more on lower grossing sales types (e.g. wholesale) will need to be offset by greater throughput in these areas.

Gross Profit % Sales

Calculation: Total Gross of Type1 ÷ Total Sales of Type1 

What does it measure: The gross profit margin for each sales type.

Why is it important: Reflects the size of the dealership's trade margins for each type of sale.

Monthly Sales per Employee

Calculation: Total Parts Sales ÷ No. of Parts Employees

What does it measure: The amount of sales generated on average for each person employed in the parts department.

Why is it important: Indicates how effective the department is at generating sales given the level of staff.

Monthly Gross Profit per Employee

Calculation: Total Parts Gross Profit (including Other Income) ÷ No. of Parts Employees

What does it measure: The amount of sales generated on average for each person employed in the parts department.

$ Sales per $ Salary

Calculation: Total Parts Sales ÷ Parts Salaries Expense

What does it measure: How much you pay your staff relative to their ability to generate sales.

Why is it important: Allows the dealership to assess its cost structure relative to sales as salaries are the predominant expense in the department.

Externally Generated Sales

Calculation: (Retail Sales + Wholesale Sales) ÷ Total Parts Sales

What does it measure: The ratio of retail (over the counter) and wholesale revenue against internal sales (workshop, warranty, internal).

Why is it important: Indicates how effective your penetration is in the trade and retail sales sectors. A high value for this KPI may lead to reduced gross profit margins but too low a value could indicate unrealised market opportunity.

Parts Days Supply

Calculation: (Value of Parts Stock on Hand ÷ Total Parts Cost of Sales*) × No. of Days in Month i.e. 30.4 days
*Cost of Sales = Sales - Gross Profit

What does it measure: How many days worth of used vehicle stock the dealership will need to meet the sales level.

Why is it important: Indicates how well new vehicle stock levels are controlled. Consistently high days supply figures should be addressed as there is a direct correlation to stock holding costs of the dealership e.g. floorplan interest.

Stock Turns per Annum

Calculation: 365 days ÷ Parts Days Supply

What does it measure: The number of times your parts inventory can be completely sold and bought in a year.

Why is it important: A low turnover rate may indicate that the dealership should assess its stock mix to address issues like overstocking, obsolescence or deficiencies in the model line or marketing effort. A high turnover rate may signal a dealership that there may be an inadequate level of inventory which may lead to a loss in business opportunity.

ROI (Gross ROI)

Calculation: (Parts Gross Profit ÷ Parts Cost of Sales) × Stock Turns

What does it measure: A measure of the efficient utilisation of current investment in inventory. The higher the figure for the KPI, the better return a dealership is getting from holding stock.


1Parts sales types include: retail, wholesale, workshop, warranty, internal and other.