Why Obsolete Parts Keep Hurting Profits

In this episode, Kaylee Felio speaks with industry expert Chuck Hartle about the costs of poor inventory decisions, outdated parts, and stock programs that look helpful on paper but quietly bleed dealerships of profit.

They break down where the money actually goes, how to measure inventory returns properly, and what parts managers can start doing now to improve margins and avoid waste.

Inventory That Doesn’t Sell Still Costs You

Holding costs stack up month after month. Even if a part shows 40% gross profit, sitting on it for ten months cancels that out completely. Chuck warns that dealerships often underestimate how fast these costs compound.

Manufacturer Programs Can Be a Trap

Many OEMs require 92% compliance on stock replenishment. Managers end up filling shelves with high-cost, low-turn items just to stay in the program. Chuck recommends staying just above the threshold and selecting low-cost parts to protect profitability.

Turns Reveal What’s Working

A healthy inventory turns 6 to 8 times a year. Too low and you’re carrying dead weight. Too high and you’re understocked. Chuck encourages tracking small increases, because even half a turn better can unlock thousands of dollars.

Takeaways

• Inventory needs a hard look beyond gross profit
• Holding costs eat up margin faster than most realize
• Compliance targets should be met strategically, not blindly
• Parts managers must educate their teams on how the numbers work
• Small changes in turns lead to big shifts in margin

“You’ve got to isolate your productive inventory or you’re lying to yourself.” — Chuck Hartle

Listen to the full episode here:https://spotifycreators-web.app.link/e/tEM8nKnrHXb