Set Goals for Your Gross Profit Margin (GPM)
Setting and hitting appropriate GPMs is crucial for your automotive repair shop to maintain success. At a minimum, set goals to achieve a 52% profit margin on sales of parts and accessories. Parts and accessories purchased from dealerships are normally priced somewhere lower on the spectrum, while parts and accessories purchased from jobbers are normally priced higher on the spectrum. An overall pooled margin of 52% is a realistic and attainable goal. Every job is different. But over a long period of time, such as a month, strive to average at least $1 for labor for every $1 of parts sold. If your labor sales are significantly higher than your parts sales over time, it usually means that you aren't marking your parts up enough. If your parts sales are significantly higher than your labor sales over time, it usually means that your shop labor rate is too low. Boost Your Profit Margins To reach higher gross profit margins, owners and operators try some or all of
