KPI Guide - Parts Department
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 the dealership can sustain sales for based on levels of parts stock and current sales performance.
Why is it important: Indicates how well parts stock levels are controlled. Consistently high parts days supply should be addressed as parts are susceptible to ageing and can bring about inventory obsolescence and other costs associated with holding stock.
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.