Key Definition
Definition
Parts Obsolescence
Parts inventory aged over 12 months with no demand. Excessive obsolescence ties up capital, distorts true inventory health, and quietly erodes margin. Monitor monthly and phase out aged units systematically.
<5%
Guide Threshold
Parts Personnel
Note: OEM unit replacement increases sales but reduces gross. Excessive staff reductions cause artificially high performance metrics. Parts-to-Labor Ratio is for reference only — not used as a guide due to regional variation in labor rates.
Parts Sales / Employee
Domestic
$70K+
per parts employee annually
Parts Sales / Employee
Import — Non-Luxury
$70K+
per parts employee annually
Parts Sales / Employee
Import — Luxury
$85K+
per parts employee annually
Parts Gross / Employee
Domestic
$28K+
per parts employee annually
Parts Gross / Employee
Import — Non-Luxury
$28K+
per parts employee annually
Parts Gross / Employee
Import — Luxury
$34K+
per parts employee annually
Ratio
Parts-to-Labor Ratio
1:1
Reference only — regional variation applies
Inventory
| Metric | NADA Guide |
|---|---|
| Turnover & Supply | |
| Turnover (Turn) | 8 per year |
| Months' Supply | 1.5 months |
| Inventory Age Profile | |
| 0–6 Months | 85% of inventory |
| 6–12 Months | 10%–15% of inventory |
| 12+ Months (Obsolete) | <5% of inventory |
| Fill Rates | |
| Fill Rate — First Time (off the shelf) | 90% |
| Fill Rate — Same-Day (pick-up) | 95% |
| Status | |
| Active / Normal Status | 75% |
Gross Profit
Gross Profit
Parts Gross % of Sales
40%
target gross margin on parts sales
Receivables
Warranty Receivables
25%
of current month parts & labor sales