What Are the Most Common Pricing Mistakes in Parts Inventory Management?

Chuck Hartle explains that one of the most common issues comes from pricing by averages. When pricing relies on averages, a large portion of parts land below the desired gross. This creates inconsistency and limits profitability.

Menu pricing inconsistency also creates friction. When service advisors see prices change for similar items, confidence drops and selling becomes harder. High volume items that never receive price review suppress gross over time.

When you price by averages, half your parts are always underperforming on gross

How Does DMS Source Structure Affect Parts Department Performance?

Source structure directly impacts pricing control and inventory behavior. When departments rely on only a few sources, pricing and stocking decisions become harder to manage.

Chuck Hartle explains that breaking inventory into more granular sources allows managers to control pricing, stocking levels, and automation more precisely. This reduces manual intervention and lets the DMS perform as intended.

Using more sources also supports better separation for items such as accessories, tires, and chemicals, which each require different pricing and inventory logic.

Why Do More DMS Sources Improve Inventory Control?

Granular source management allows parts managers to apply different pricing strategies and inventory rules without constant overrides. It supports varied day supply settings and phase in or phase out behavior across different product categories.

This structure also reduces errors by allowing automation to handle decisions that otherwise require manual review. The result is a cleaner process and better consistency across the department.

How Can Parts Departments Increase Gross on High Volume Items?

High volume items often sit at low gross margins because pricing never gets revisited. Chuck Hartle discusses how small, intentional price adjustments can change results without disrupting advisor confidence.

Incremental changes of 1 or 2 dollars on menu priced items can significantly improve profit percentages when applied consistently. This approach keeps pricing stable while improving overall performance.

Collaboration between parts and service also plays a role. When both departments focus on shared outcomes profitability improves across the operation.

How Do Compensation Structures Affect Parts and Service Alignment?

Compensation models often reward service advisors based on labor while parts staff focus on counter metrics. This creates misalignment.

Chuck Hartle describes cross incentive strategies where parts staff benefit from hours sold and service teams share accountability for parts performance. This supports teamwork and keeps everyone focused on total department success.

Listen to the episode: 

https://open.spotify.com/episode/4NM3evZKh9XnqGFGF77wnK?si=h2q_3DB6R6q9Auk3TlIIaA

Watch to the episode: 

https://youtu.be/py0HU2cncSY?si=2EsUd0o5f-HLLt5r