How do you define an "Emergency Purchase?" The level of emergency purchases has a direct affect on the profitability of the parts department and to some degree the service department as well. An over reliance on emergency purchases can mean paying higher prices for parts, as well as lost discounts from the factory directly affecting the profit of the parts department.
How the shift from vehicle repair to vehicle maintenance work can boost parts profits Knowing what maintenance parts your customers need will make their vehicles safer and more reliable and your parts department revenues greater. Today, a parts manager can awaken to a completely new world of customer demands just by taking an afternoon nap. Case in point: the ongoing shift in the service business from repair-based to maintenance-based shop operations.
Is the use of a pricing matrix still a legitimate merchandising tool for parts managers? In his parts manager training classes, Parts Manager editor Chuck Hartlé often asks class participants how many of them use a parts pricing matrix. He then asks the matrix users to check their financial statements and tell him their gross profit margins. It is surprising, Chuck says, that most of the matrix users report gross profit margins in the 34 to 36 percent range. If that's the result, he wonders, why go to the trouble of using the matrix to support profitability when it is clearly having the opposite effect? Why not make life easier and just use the MSRP?