on manufacturer list pricing without considering local market dynamics or customer segments can limit growth. A more nuanced approach to parts pricing can significantly improve overall gross while maintaining market share. Advancements in OEM inventory management software have revolutionized accuracy and efficiency. Oldschool perceptions about these systems burdening dealerships with inventory expenses might have been a valid concern 2 decades ago, but not anymore. The modern systems have evolved dramatically and leverage the nationwide data to predict demand, often recommending parts before you sell one. The accuracy of these systems makes manually managing inventory levels unnecessary. By trusting these systems and staying compliant, dealerships not only optimize inventory but also safeguard it effectively. DECODING YOUR EFFECTIVE LABOR RATE (ELR) FOR MAXIMUM PROFITABILITY Understanding your Effective Labor Rate (ELR) and how it differs from your posted door rate is often a challenging area for many dealership personnel. However, recognizing and addressing this gap is critical for sustained profitability. In an ideal dealership, only two factors should affect this difference for everyday customer-pay work: management pricing and the work mix flowing through the shop. However, service menu pricing and package deals can unintentionally lower your ELR if not carefully structured. While package deals can drive volume, they often erode profitability when not calculated strategically. The key is finding the right balance between attracting customers and maintaining sustainable margins. JANUARY FEBRUARY 2025 || FIXED OPS MAGAZINE 31