Menu Parts- they go up my GP goes down-Fix?

[asekevin]

We all receive new part prices every month.- kinda like death and taxes, parts cost are going to go up or maybe down each month. If you hang a 5 foot menu board in your dealership serv. office (as I do) and print high quality, color, customer tri-fold copies of this same menu ($$)--Advertisise your pricing...............What are you doing about your labor GP loss each month?
1___Did you add GP to the labor values Jan. 1st betting that by Dec 31st you would be covered(or better)?
2___Does your parts manager do the same thing(taking extra GP at the front of year) then hold his prices all year?

*where could Parts Cost Averaging fit into this dilemma--if at all?)

Looking forward to your solution!


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Kevin-Honda Service Manager, TX

[GMFXDOPSMGR]

Sounds like you are adjusting your pricing to fit your menu prices by adjusting your labor to offset the parts increase. Sometimes when there is enough parts price change, increase the price of the menu. All printed materials should have the statement" prices subject to change without notice". I have my parts mgr keep me informed if we have any drastic parts changes, then survey my competition to see if I can justify changing my prices to cover the cost of the parts increase. I can not get down with the cheap chain stores on price, but I can sell a lot more value by being the dealer.
We try to make our "menu" pricing fixed for a 6 month time period by anticipating any parts increases. I do not adjust the labor gross since most of the menu labor $'s are cut already. We have to try to maintain the menu structure for at least 6 months or more. We very seldom get a parts decrease, but there are times when we can renegotiate the price of oil, transfluid, coolant, and sometimes filters. There are distributors that are needing to add more parts departments to their list and will get you better pricing if you have them bid against each other.

[asekevin]

GMFXDOPSMGR- thanks for the reply. Yes, we are adjusting our labor to live up to the posted price and losing some labor GP + ELR in the bargain. Great reply, thanks for your input!
Kevin