Nine Tips for Parts Department Success
Over the last few years, the parts department has become an important profit center in all dealerships. In fact, our Benchmark data consistently shows two-thirds (or more) of all parts departments bring in a larger net profit than any other in the dealership, yet they are often the least recognized. Think about that for a moment. Do you know the optimal processes of your parts department? Is the department even running optimally at all? Is this department a reliable partner to the whole dealership? If you are unsure about any of these questions, then we have some work to do.
When I speak with high-performing dealers, ALL of them consider their parts department an integral part of their team. This mindset however, is not common across our industry. If you’re ready to lead one cohesive dealership and would like to identify profit opportunities across all departments, you must shift your mindset and integrate these tips.
Nine Tips for Parts Department Success
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Include the parts department in all shop and advisor meetings.
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Ensure the parts manager is visible and engaging on the service drive a few times a week.
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Train the parts department team to immediately deliver the necessary parts to the mechanics.
Pro Tip: This training can set standards for all other departments as well. Everyone should know what is expected of them, and that it is unacceptable to “get to it tomorrow” or “later today” if it slows down your processes. Ultimately, repeating old bad habits leads to profit losses (like racking and re-racking the same vehicle for example).
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Utilize a daily lost sales report.
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Make sure the team knows how they can help the production of the shop—both mechanics and the parts counter team.
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Don’t expect or ask the parts department to discount parts, especially if you’re not discounting labor on the vehicle.
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Ask for the department’s opinion on how things can run smoother and how everyone can work together better. It’s important for the entire team to feel comfortable voicing their opinions, and sometimes you have to ask for it!
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Set measurable goals. Let the parts department know what you are trying to achieve, and exactly how they can contribute.
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Track daily gross percentages by counter person.
When I tell dealers or general managers about these tips, many think that it is possible to survive without a great working relationship with the parts department. And yes, it is possible to do so. When your parts department feels like they are an active part of the team, the results are truly amazing! Not only will you have a happier working environment, you will also have a much better bottom line.