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Inventory Turns

8 times per year (NADA)
6 times per year (ADMI)
4 times per year (Chrysler - Groups 1 & 2)
​5 times per year (Chrysler - Group 3)
5 times per year (Chrysler - Groups 4 & 5)

Inventory Profile
(NADA)
0 to 3 months - 75% of inventory
4 to 6 months - 23% of inventory
7 to 12 months - 2% of inventory

Parts Sales Per Employee
(NADA)
Domestic - $33,000 per month
Import - $38,000 per month

Parts Piece Sales Per Employee
1100-1400 pieces/man/month - MNCM

Wholesale Sales per Sales Person (Large wholesale operations)
$75,000+ (NetProfit Inc.)

Parts Gross Per Parts Employee
(NADA)
Domestic - $12,000 per month
Import - $14,000 per month
$11,000+ per month  - no parts transfer to service (NetProfit Inc.)

Parts to Labor Ratio
0.80 minimum (NADA)
1.14 (Chrysler - Groups 1 & 2)
1.02 (Chrysler - Group 3)
0.92 (Chrysler - Groups 4 & 5)

Pricing Policy
Matrix when possible by individual parts number cost (NADA)

Level of Service
90% - 95% (NADA)

Off The Shelf Fill Rate
100% (ADMI)

Parts Inventory Months Supply
1.5 (NADA)
1.5 - 2.0 (NetProfit Inc.)
3.0 (Chrysler - Groups 1 & 2)
2.0 (Chrysler - Groups 3,4 & 5)
2.5 for large dealers to 4.5 month's supply for smaller dealers (Ford)

Parts Inventory Phase Out Setting
6 months (NetProfit Inc.)
6 months (ADMI)

Parts inventory Return On Investment
25% or better (ADMI)

Customer RO Gross Profit Retention
43%+ (NetProfit Inc.)
35.0% (Chrysler - Groups 1 & 2)
35.9% (Chrysler - Groups 3,4 & 5)

Body & Paint RO Gross Profit Retention
29.7% (Chrysler - Groups 1 & 2)
31.8% (Chrysler - Group 3)
30.0% (Chrysler - Groups 4 & 5)

Service Contracts Gross Profit Retention
30.7% (Chrysler - Groups 1 & 2)
34.0% (Chrysler - Group 3)
35.5% (Chrysler - Groups 4 & 5)

Internal Gross Profit Retention
30%+ (NetProfit Inc.)
27.4% (Chrysler - Groups 1 & 2)
29.1% (Chrysler - Groups 3)
27.2% (Chrysler - Groups 3 & 4)

Body & Paint Internal Gross Profit Retention
19.9% (Chrysler - Groups 1 & 2)
23.5% (Chrysler - Groups3)
26.9% (Chrysler - Groups 3 & 4)

Warranty Gross Profit Retention
32.9% (Chrysler - All Groups)
34.5% (Chrysler - Group 3)
37.0% (Chrysler - Groups 4 & 5)

Body & Paint Warranty Gross Profit Retention
31.4% (Chrysler - Groups 1 & 2)
14.9% (Chrysler - Group 3)
36.7% (Chrysler - Group 4 & 5)

Wholesale Gross Profit Retention
22 - 25% (NetProfit Inc.)
13.3% (Chrysler - Groups 1 & 2)
10.9% (Chrysler - Group 3)
11.8% (Chrysler - Groups 4 & 5)

Counter Retail Gross Profit Retention
38 - 40% (NetProfit Inc.)
27.8% (Chrysler - Groups 1 & 2)
28.9% (Chrysler - Group 3)
26.6% (Chrysler - Groups 4 & 5)

Tires Gross Profit Retention
13.8% (Chrysler - Groups 1 & 2)
14.3% (Chrysler - Group 3)
15.0% (Chrysler - Groups 4 & 5)

Total Parts Gross Retention
30% or better (ADMI)
25 - 30% (NetProfit Inc.)
29.9% (Chrysler - Groups 1 & 2)
30.3% (Chrysler - Group 3)
29.7% (Chrysler - Groups 4 & 5)

Parts Sale Expense (% of Gross)
45% or less (ADMI)
39.1% (Chrysler - Groups 1 & 2)
38.0% (Chrysler - Group 3)
36.9% (Chrysler - Groups 4 & 5)

Parts Selling Gross (% of Gross)
55% or better (ADMI)
64.5% (Chrysler - Groups 1 & 2)
65.2% (Chrysler - Group 3)
62.5% (Chrysler - Groups 4 & 5)

Idle Inventory
12+ months - 12% or less (ADMI)
6+ months - 20% or less (NetProfit Inc.)

Stock Order Performance
daily stock orders - 90% or better (ADMI)

Parts Absorption
Parts only w/ body shop - 20% (NADA)
Parts only w/o body shop - 25% (NADA)
Parts & Service 48.7% (Chrysler - Groups 1 & 2)
Parts & Service 53.1% (Chrysler - Group 3)
Parts & Service 59.3% (Chrysler - Groups 4 & 5)
Parts & Service 70 - 100% (Ford)

Technicians per Counter Person
10 maximum (NetProfit Inc.)

Support Wages, Excluding Benefits (working directly for parts)
22% (NetProfit Inc.)
28.0% of parts gross profit (Chrysler - Groups 1 & 2)
27.0% of parts gross profit (Chrysler - Group 3)
29.3% of parts gross profit (Chrysler - Groups 4 & 5)

Policy and Goodwill Expense
1.0% or less of parts gross profit (NetProfit Inc.)
0.6% of parts gross profit (Chrysler - Groups 1 & 2)
0.4% of parts gross profit (Chrysler - Group 3)
0.5% of parts gross profit (Chrysler - Groups 4 & 5)

Advertising and Discounts Expense
1.0% of gross profit (NetProfit Inc.)
2.0% of parts gross profit (Chrysler - Groups 1 & 2)
2.2% of parts gross profit (Chrysler - Group 3)
2.3% of parts gross profit (Chrysler - Groups 4 & 5)

Freight Expense
1.0% of parts gross profit (Chrysler - Groups 1 & 2)
1.4% of parts gross profit (Chrysler - Group 3)
1.5% of parts gross profit (Chrysler - Groups 4 & 5)

Supplies, Tools
1.2% of parts gross profit (Chrysler - Groups 1, 2 & 3)
1.0% of parts gross profit (Chrysler - Groups 4 & 5)

Training and Advertising Expense
1.1% of parts gross profit (Chrysler - Groups 1 & 2)
0.8% of parts gross profit (Chrysler - Group 3)
0.5% of parts gross profit (Chrysler - Groups 4 & 5)

Net profit (after all expenses)
30 - 35% of parts gross profit
38% of parts gross profit (Chrysler - Groups 1 & 2)
37% of parts gross profit (Chrysler - Groups 3, 4 & 5)

Departmental Gross Profit as a Percent of Total Dealership Gross Profit
16% (Chrysler  - Groups 1 & 2)
17% (Chrysler  - Group 3, 4 & 5)


(Chrysler) 2018 Chrysler Profitable Dealer Guide
(Ford) 2011 Ford Accounting Manual
(NADA) - 2011 NADA Dealership Operations Mini-Guide www.nada.org
(ADMI) www.admi-usa.com
(Net Profit Inc.)  Net Profit Inc. www.npinc.com
(MNCM) Mike Nicholes Capital Management - www.partsconsulting.com