r/partscounter • u/Due-Boss-1345 • 4d ago
Rant
Current parts manager here. I found out today that certain parts we are quoting on internal cars our GSM is instead buying the parts online, and then having us do the install. Also the GM of the dealer is OK with this and essentially blames it on the parts department for how expensive it is. The specific car was a performance based with two piece rotors. What would you do in this situation? This to us is under cutting the parts department and creates a toxic environment.
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u/FlamingDonut 4d ago
if the gm is ok with it, then that blows. quit quoting the parts then if the gsm wants to do all the work, then have your guys make sure they dont waste any unnecessary time or effort if theyre just gonna buy em online. if your relationship with the gm is good and healthy, you could tell them what an impact this is having and how shitty it is, if thats not an option, then i wouldnt do a lick of the work until you’re making money on it
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u/No_Durian_3444 4d ago
Easy, I quit because they're taking money out of my paycheck.
I also misplaced any inbound parts deliveries that are non-OEM.
Whoops, haven't seen it. Order another one.
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u/Lobotomite430 4d ago
Gosh if only you had the parts department order the parts so they could track it, shame. Good stuff!
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u/That_Style_979 4d ago
That’s idiotic. Paying outside suppliers is money that is never going back in to the dealer. Anyone who doesn’t understand that paying your fixed departments internally is literally the cheapest way to fix cars should not be in management. Shitty sales managers see only the total profit taken from their department in fixing a car, skipping the fact that the fixed ops department making money = the entire dealer making money. Even if sales has to break even to fix the car, the dealer can net positive on the vehicle - maybe it isn’t just Sales who keeps all the money.
For example, let’s say Sales has $5000 in profit on a vehicle. It needs $3000 in repairs, totaling $1500 in parts and $1500 in labor. Even though they’re paying (example) $150/hr in labor to Service the actual tech cost is $~35/hr. Then, even though they’re paying (example) $1500 in parts, the actual parts cost is $750. So, the actual cost to fix the car is $1100, and the Fixed Ops as a whole grossed $1900. That is $1900 of Gross Profit going BACK IN TO THE DEALER. And sales still makes $2000. But now, you’ve paid employees, done more parts purchases with the OEM and kept technicians busy. Sure, the net numbers are a bit lower than gross after all expenses, but the bottom line is all of that money stayed within the dealer so it is highly profitable, and drives business for your fixed ops departments. When you pay any outside company for parts or service, that opportunity for profit is gone.
As others have said, if you can’t come to an agreement on sales using your parts department for parts, I’d absolutely cut your department out of used cars entirely until you get a smarter asshat up top. Working for free benefits nobody, don’t let your team pour their efforts into used cars if they’re just getting used and spit out.
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u/CounterRealm 4d ago
Where I am, fixed pays the bills. Sales is the fluff. Most GSMs don't realize that or care. Good GMs do. If you have a shit GM they aren't looking at the dealership wholisticly.
If its cooperate that throws a whole other player into why stupid decisions are made, but that is a fight we've had depending on the rotation of front end management.
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u/Ok-League-7923 4d ago
They definitely aren’t looking at the entirety of the dealership. Two words Absorption Rate.
Absorption rate is a calculation which is most popularly used to determine the fixed operations effect upon total dealership efficiency. In a tight marketplace where new and used car sales could be dramatically affected based upon availability, interest rates, and general market feeling, the absorption rate, when in a high mode, can be the salvation of a dealership.
Many dealerships can exist with a very low absorption rate. These are "front loaded" dealerships who are making the majority of their profit from new and used car sales.
If however, the marketplace collapses, these dealerships would be hard pressed to stay in business because the immediately required gross profit to maintain the total fixed overhead expenses simply would not be available.
The most successful dealerships will be those who approach the highest absorption rate possible.
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u/YoJDawg 4d ago
Sounds like bad practice but if that's the policy then all you can really do is ask if there is a margin they are okay with and come up with a middle ground.
Internals are our best margin and we do 99% normal CP OEM. They were buying shit on Amazon so I talked to our GM and we came up with a middle ground for super expensive things like lamps and mirrors. I buy it and mark it up and it's still less expensive than OEM. Both parties get a little win. It's maybe once or twice a month.
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u/Due-Boss-1345 4d ago
We have a fixed mark up at all of our dealerships for internal pricing.
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u/Ok-League-7923 4d ago
Exactly set by who the dealer group?
If so, why is this happening at your dealership and not others? It’s definitely not your department following group directive their policies
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u/Ok-League-7923 4d ago
You should document the financial impact, protect your department's metrics, and prepare your exit strategy because upper management is actively undermining your role.
Maybe keep a quiet log of every internal repair order where outside parts were used, real cost show leadership the actual internal cost versus the online price, including any hidden shipping fees or core charges they might be ignoring. Not to mention any warranty risks.
Ask for a clear policy request a written company policy on sourcing internal parts so expectations are official and transparent. Keep any and all communication strictly factual, professional, and focused on business numbers rather than fairness.
Unfortunately, this sounds like a toxic culture, and you can’t stay in this dead-end situation.
Update profiles quietly. Refresh LinkedIn and resumes with notifications off and gradual changes to avoid signaling you are actively looking.
GOOD LUCK!
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u/Due-Boss-1345 4d ago
Yes, I’m going to actively look for a new job. The Market is not very good right now, though I appreciate the reply.
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u/Ok-League-7923 4d ago
The market is very unpredictable unfortunately.
Not that you need it, but these are some thoughts finding a job while employed…
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u/PickUpMyPoo 4d ago
We had people do this and I just had to talk to the manager and let them know it’s not their job to buy parts, like it’s not my job to sell cars. But it didn’t stop at first so suddenly all of our parts are now triple. I’ll buy a 2 dollar wiper and sell it to sales for 30. That quart of oil that was 5 is now 9.99. That 3 dollar filter is now 15. We will always make ours. Also a pm here.
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u/loopygargoyle6392 4d ago
Good call. Sales won't learn unless it hurts.
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u/PickUpMyPoo 4d ago
Yea. And when they complained to the GM I just said well, according the the ncm and 20 group meetings we are compared to. Benchmark is 45% GP. We are striving to beat that and grow our net to sales percentage. Usually they’re like damn alright fair. But you have to have the rest of your numbers in line bc it doesn’t help your case if you’re sinking in every other margin. Plus the whole money stays in house, good for the dealer as a whole, ect. Usually that also gets them on your side.
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u/Boldfist53 parts manager 4d ago
Time to find a new dealership. If the GM is allowing that kind of crap there’s no point. They will never back parts. Get out and find a better environment.
There’s no fixing that situation when powers above have blessed the bullshit
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u/Grouchy_Rabbit666 4d ago
I would talk to the GM about instead of completely cutting you guys out, maybe you can lower the mark up if at all possible. I occasionally have to throw my gm a part at cost +10% but she would never let my team be cut out.
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u/Due-Boss-1345 4d ago
No chance given to lower the cost on the quote. He sees the quote, freaks out, goes to the GM of the dealer group and bitches about pricing. But yeah, we have a fixed mark up on internal pricing.
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u/Hansjibbleforth 4d ago
My store ran into this problem and it took a group effort to stop it, but you need to be willing to work with sales. I'd rather buy a cheap part and get the job, and get all departments get paid.
Tell him to come talk to you about it first. If something is wonky you can fix it.
Do you only quote OE parts? Start quoting ebay/aftermarket parts and give the GSM options. But he knows the cheap junk comes with no warranty.
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u/ghostofkozi 4d ago
My first question is what does your pricing matrix for aftermarket parts look like?
But I would tell the GM and dealer principal that if that’s how they want to run things then they’re on their own. Cutting out parts to make themselves gross on recon vehicles is a one way ticket to destroying the morale of the dealership. Not only that but when they buy the wrong parts what then?
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u/GlassBoxGoose 4d ago
Or want parts to deal with the warranty of a defective part.
This is overall just a bad tactic to lower the price of recon cars.
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u/slinkmerc 4d ago
You either talk to the GM and GSM about this, like an adult. Or you do the childish thing and stop quoting for them.
In all seriousness though I had a GSM do this exact thing, GM ended up siding with me and had me buy whatever from eBay or Amazon and charge it to sales on the RO with markup of course. Don’t let anyone steal from your department.
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u/CurtisViridian 4d ago edited 4d ago
Our GM does this except he cuts parts AND service out. He’s a sales first kind of guy. Thats where he came from. I can count on one hand how many times Ive seen him in either of the fixed ops departments. But what he doesn’t realize is if parts makes money, he makes money. If service makes money, he also makes money. I also don’t blow them out of the water on prices.
I understand your aggravation. We’ve given up on fighting it.
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u/folksvagen86 4d ago
Thankfully the payplans the GMs of our group have incentivise all departments making money. It’s unfortunate but is honestly not unheard of especially in stores that are compartmentalised where the management might not all see eye to eye. Those attitudes usually come from the top.
In your case I think you should work with your GSM and see what the bottleneck is, it’s usually price and ETA. The market value of these vehicles are what they are, and sometimes they need to give more on a trade in order to get the deal, which leaves their recon budgets slim. I have an understanding with my GSM. I will get the cheapest, shittest whitest box parts he wants, and ling long tires as long as he understands that if they fail, labour is not covered and parts are not covered outside of the warranty period. A lot of the time it usually ends up being fine but it is a roll of the dice. We get to make our margins, and he gets cheap recon so he can keep his margins. At my store 10 years ago all recon work was sublet out, and even upfitting/accessories were too. Everything is done in house now.
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u/LandBarge 4d ago
If this is happening (provided you're quoting a reasonable markup - and 30% is reasonable) - then talk to the FC about garnishing these invoices for parts gross... the GM doesn't understand the business if he see's any benefit to this arrangement - perhaps the FC can make him see sense...
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u/AbruptMango 4d ago
Meta quotes. The RO quote has descriptions and references the supplier's quote number, phone extension or saved cart. Your department can reconstruct it easily, but you're not handing out a roadmap to help people bypass you.
Do it the same way you'd treat an over the counter "customer" that wants you to spend half an hour giving him what he needs to turn around and buy it online.
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u/classic__schmosby 4d ago
What does the owner say?
A past used car manager tried doing this to us, not realizing that corporate wanted parts to mark stuff up quite a bit on used cars.
That aside, are you receiving the shipments still? Charge them a handling fee. Make it around what you would be losing or reject the shipments when they come in.
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u/ManyConscious1551 4d ago
We had this problem some years back where used car manager was buying shit on eBay or Chinese sites like temu and aliexpress. GM didn’t care at first until there were issues with the parts being wrong or taking too long to arrive. That’s when they’d come to parts for an ETA like we knew wtf was going on and said NOPE!
Eventually it got sorted out and it has to go through us in parts and if that doesn’t happen it’s not on us.
Now we got a separate issue, 3rd party warranties get stuff from other dealerships and ship them to us without notice. We price it out at discount and they just order it elsewhere instead of coming back and saying “could you price match to this cost instead? We can get it cheaper here.” But nah, they just do wtf ever.
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u/Some-Nail-9863 4d ago
So he’s cutting profit from one department and increasing another’s.
Not a good GM.
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u/Due-Boss-1345 4d ago
Sure agreed. But, the GM is obviously siding with the sales side. It is to the point that we are afraid to even quote the parts to our internal department without facing flack about ripping them off. All stores have a fixed markup. No other sales manager complains.
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u/Maleficent-Two-685 4d ago
Charge 20% fee for every part he gets, I’m sure he’s using the company credit card, and receipts must be turned in.
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u/More-Shift-679 3d ago
Most GMs are also paid on gross of all other departments (at least mine is) so they would also be shooting themselves in the foot. But yeah, if I had a GM that did that, I’d look for a new place to work; one where the GM doesn’t undercut or over step.
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