{"product_id":"commercial-vehicle-dealership-kpi-metrics","title":"7 Essential KPIs to Maximize Commercial Vehicle Dealership Profit","description":"\u003cdiv class=\"container_new_design\"\u003e\n\u003cdiv class=\"text-section text-1_new_design\"\u003e\n\u003cdiv class=\"line_top\"\u003e\u003c\/div\u003e\n\u003ch2\u003eKPI Metrics for Commercial Vehicle Dealership\u003c\/h2\u003e\n\u003cp\u003eTo run a successful Commercial Vehicle Dealership, you must track efficiency across inventory, sales, and service margins, not just total volume We focus on 7 core metrics that drive profitability The 2026 forecast shows total revenue near \u003cstrong\u003e$1925 million\u003c\/strong\u003e, requiring tight control over variable costs, which start at 115% (60% commissions, 40% marketing, 15% prep\/logistics) Annual fixed overhead, including $470,000 in wages and $285,600 in Opex, totals \u003cstrong\u003e$755,600\u003c\/strong\u003e, meaning every sale must carry significant gross profit per unit (GPU) Review inventory turnover weekly and financial ratios monthly to ensure the high projected EBITDA of \u003cstrong\u003e$162 million\u003c\/strong\u003e in 2026 is defintely achievable\n\u003c\/p\u003e\n\u003c\/div\u003e\n\u003cdiv class=\"image-section image-1_new_design\" id=\"main_article_image\"\u003e\u003c\/div\u003e\n\u003c\/div\u003e\u003cbr\u003e\n\u003ch2\u003e\n\u003cspan style=\"color: #6067F2;\"\u003e7 KPIs to Track for \u003c\/span\u003eCommercial Vehicle Dealership\u003c\/h2\u003e\u003cbr\u003e\n\u003ctable id=\"dwnld_tbl_id\"\u003e\n\u003ctr\u003e\n\u003cth\u003e#\u003c\/th\u003e\n\u003cth\u003eKPI Name\u003c\/th\u003e\n\u003cth\u003eMetric Type\u003c\/th\u003e\n\u003cth\u003eTarget \/ Benchmark\u003c\/th\u003e\n\u003cth\u003eReview Frequency\u003c\/th\u003e\n\u003c\/tr\u003e\n\u003ctr\u003e\n\u003ctd\u003e1\u003c\/td\u003e\n\u003ctd\u003eGross Profit Per Unit (GPU)\u003c\/td\u003e\n\u003ctd\u003eProfitability\u003c\/td\u003e\n\u003ctd\u003e$5,000+ for trucks\u003c\/td\u003e\n\u003ctd\u003eDaily\/weekly\u003c\/td\u003e\n\u003c\/tr\u003e\n\u003ctr\u003e\n\u003ctd\u003e2\u003c\/td\u003e\n\u003ctd\u003eInventory Turnover Rate (ITR)\u003c\/td\u003e\n\u003ctd\u003eEfficiency\u003c\/td\u003e\n\u003ctd\u003e6–8 turns annually\u003c\/td\u003e\n\u003ctd\u003eWeekly\u003c\/td\u003e\n\u003c\/tr\u003e\n\u003ctr\u003e\n\u003ctd\u003e3\u003c\/td\u003e\n\u003ctd\u003eFinance \u0026amp; Insurance (F\u0026amp;I) Penetration Rate\u003c\/td\u003e\n\u003ctd\u003eAncillary Revenue\u003c\/td\u003e\n\u003ctd\u003e65%+ penetration\u003c\/td\u003e\n\u003ctd\u003eWeekly\u003c\/td\u003e\n\u003c\/tr\u003e\n\u003ctr\u003e\n\u003ctd\u003e4\u003c\/td\u003e\n\u003ctd\u003eService Absorption Rate\u003c\/td\u003e\n\u003ctd\u003eOperational Coverage\u003c\/td\u003e\n\u003ctd\u003e80%+\u003c\/td\u003e\n\u003ctd\u003eMonthly\u003c\/td\u003e\n\u003c\/tr\u003e\n\u003ctr\u003e\n\u003ctd\u003e5\u003c\/td\u003e\n\u003ctd\u003eUsed-to-New Sales Ratio\u003c\/td\u003e\n\u003ctd\u003eSales Mix\u003c\/td\u003e\n\u003ctd\u003e15:1 or higher\u003c\/td\u003e\n\u003ctd\u003eMonthly\u003c\/td\u003e\n\u003c\/tr\u003e\n\u003ctr\u003e\n\u003ctd\u003e6\u003c\/td\u003e\n\u003ctd\u003eCustomer Acquisition Cost (CAC)\u003c\/td\u003e\n\u003ctd\u003eMarketing Efficiency\u003c\/td\u003e\n\u003ctd\u003eSignificantly less than GPU\u003c\/td\u003e\n\u003ctd\u003eMonthly\u003c\/td\u003e\n\u003c\/tr\u003e\n\u003ctr\u003e\n\u003ctd\u003e7\u003c\/td\u003e\n\u003ctd\u003eOperating Expense Ratio (OER)\u003c\/td\u003e\n\u003ctd\u003eOverhead Control\u003c\/td\u003e\n\u003ctd\u003eBelow 10% (excluding inventory cost)\u003c\/td\u003e\n\u003ctd\u003eMonthly\u003c\/td\u003e\n\u003c\/tr\u003e\n\u003c\/table\u003e\n\u003cdiv class=\"dwnld_btn_div\"\u003e\u003cbutton id=\"dwnld_btn_id\" class=\"dwnld_btn_clss\"\u003eDownload Table in XLSX\u003c\/button\u003e\u003c\/div\u003e\u003cbr\u003e\u003cbr\u003e\u003cbr\u003e \u003ch2\u003e\u003cspan style=\"color: #126CFF;\"\u003eWhat is the true lifetime value of a commercial fleet customer?\n\u003c\/span\u003e\u003c\/h2\u003e\n\u003cp\u003eThe true Lifetime Value (LTV) of a Commercial Vehicle Dealership customer hinges on capturing 5-year recurring service and lease revenue, which should ideally exceed the initial Customer Acquisition Cost (CAC) by a factor of \u003cstrong\u003e3x or more\u003c\/strong\u003e. Have You Considered The Key Sections To Include In Your Commercial Vehicle Dealership Business Plan? This LTV calculation must account for the high upfront cost of acquiring a fleet account versus the steady, high-margin service revenue stream that follows the initial unit sale.\u003c\/p\u003e\n\u003cdiv class=\"container_2_clmn_row\"\u003e\n\u003cdiv class=\"card_smpl blue_card\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-colons-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\u003ch3\u003eFive-Year Recurring Revenue Potential\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cul class=\"lst_crct_blog\"\u003e\n\u003cli\u003eAssume a mid-size fleet requires \u003cstrong\u003e$1,200\u003c\/strong\u003e monthly in scheduled maintenance and parts post-sale.\u003c\/li\u003e\n\u003cli\u003eOver five years, this generates \u003cstrong\u003e$72,000\u003c\/strong\u003e in pure service revenue per fleet account.\u003c\/li\u003e\n\u003cli\u003eIf leasing is involved, the gross profit margin on the lease structure itself adds another \u003cstrong\u003e$10,000\u003c\/strong\u003e to the LTV base.\u003c\/li\u003e\n\u003cli\u003eThis recurring income is defintely what makes fleet relationships profitable long term.\u003c\/li\u003e\n\u003c\/ul\u003e\n\u003c\/div\u003e\n\u003cdiv class=\"card_smpl\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-intro-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\u003ch3\u003eJustifying the Initial Acquisition Cost\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cul class=\"lst_crct_blog\"\u003e\n\u003cli\u003eIf the average CAC to land a new fleet client is \u003cstrong\u003e$18,000\u003c\/strong\u003e, you need \u003cstrong\u003e30 months\u003c\/strong\u003e of service revenue to break even on acquisition spend.\u003c\/li\u003e\n\u003cli\u003eA healthy LTV:CAC ratio means the initial unit sale margin covers \u003cstrong\u003e50%\u003c\/strong\u003e of the CAC immediately.\u003c\/li\u003e\n\u003cli\u003eFocus on upfitting revenue; it often carries a \u003cstrong\u003e45%\u003c\/strong\u003e gross margin, helping offset high sales team costs.\u003c\/li\u003e\n\u003cli\u003eIf onboarding takes \u003cstrong\u003e90 days\u003c\/strong\u003e, churn risk rises significantly before the service cycle starts.\u003c\/li\u003e\n\u003c\/ul\u003e\n\u003c\/div\u003e\n\u003c\/div\u003e\u003cbr\u003e\n\u003ch2\u003e\u003cspan style=\"color: #126CFF;\"\u003eHow do we optimize the gross margin stack across vehicle sales, service, and F\u0026amp;I?\n\u003c\/span\u003e\u003c\/h2\u003e\n\u003cp\u003eMaximizing Gross Profit Per Unit (GPU) for your Commercial Vehicle Dealership means aggressively balancing vehicle margin against high-yield ancillary income from service and finance. The ideal split defintely favors capturing \u003cstrong\u003e40% to 50%\u003c\/strong\u003e of total gross profit from non-vehicle sources like extended service contracts and finance reserve income.\u003c\/p\u003e\n\u003cdiv class=\"container_2_clmn_row\"\u003e\n\u003cdiv class=\"card_smpl\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-intro-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\u003ch3\u003eVehicle Margin vs. Ancillary Profit\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cul class=\"lst_crct_blog\"\u003e\n\u003cli\u003eNew truck sales often yield \u003cstrong\u003e8% to 12%\u003c\/strong\u003e gross margin before reconditioning costs.\u003c\/li\u003e\n\u003cli\u003eUsed vehicle gross profit typically ranges from \u003cstrong\u003e15% to 22%\u003c\/strong\u003e depending on sourcing efficiency.\u003c\/li\u003e\n\u003cli\u003eService contracts and extended warranties carry margins often exceeding \u003cstrong\u003e50%\u003c\/strong\u003e when structured correctly.\u003c\/li\u003e\n\u003cli\u003eIf onboarding takes 14+ days, churn risk rises; remember to check regulations first—Have You Considered The Necessary Licenses And Permits To Launch Your Commercial Vehicle Dealership?\u003c\/li\u003e\n\u003c\/ul\u003e\n\u003c\/div\u003e\n\u003cdiv class=\"card_smpl blue_card\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-colons-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\u003ch3\u003eTargeting the Ideal GPU Stack\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cul class=\"lst_crct_blog\"\u003e\n\u003cli\u003eAim for a \u003cstrong\u003e60\/40\u003c\/strong\u003e split: 60% from the vehicle sale, 40% from F\u0026amp;I and Service income.\u003c\/li\u003e\n\u003cli\u003eA $60,000 truck sale with $5,000 vehicle gross profit needs $3,333 from F\u0026amp;I\/Service to hit the 40% target.\u003c\/li\u003e\n\u003cli\u003eService penetration rates must exceed \u003cstrong\u003e70%\u003c\/strong\u003e of all units sold or leased to stabilize recurring income.\u003c\/li\u003e\n\u003cli\u003eFocus on bundling priority service agreements directly into the initial lease structure to lock in future revenue.\u003c\/li\u003e\n\u003c\/ul\u003e\n\u003c\/div\u003e\n\u003c\/div\u003e\u003cbr\u003e\n\u003ch2\u003e\u003cspan style=\"color: #126CFF;\"\u003eHow fast must inventory turn to minimize floorplan financing costs?\n\u003c\/span\u003e\u003c\/h2\u003e\n\u003cp\u003eTo minimize floorplan financing costs for the Commercial Vehicle Dealership, you must aggressively manage Days Supply of Inventory (DSI), targeting \u003cstrong\u003e45 days\u003c\/strong\u003e for new trucks and \u003cstrong\u003e60 days\u003c\/strong\u003e for used vans; this speed directly cuts the cost of capital tied up in assets, so review \u003ca href=\"\/blogs\/how-to-open\/commercial-vehicle-dealership\"\u003eHave You Considered The Necessary Licenses And Permits To Launch Your Commercial Vehicle Dealership?\u003c\/a\u003e as you plan your initial stock levels.\u003c\/p\u003e\n\u003cdiv class=\"container_2_clmn_row\"\u003e\n\u003cdiv class=\"card_smpl blue_card\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-colons-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\u003ch3\u003eNew Truck Inventory Targets\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cul class=\"lst_crct_blog\"\u003e\n\u003cli\u003eTarget DSI for new trucks should be \u003cstrong\u003e45 days\u003c\/strong\u003e maximum to control high unit costs.\u003c\/li\u003e\n\u003cli\u003eA \u003cstrong\u003e$70,000\u003c\/strong\u003e new unit held for 90 days at a 7% floorplan rate costs \u003cstrong\u003e$1,225\u003c\/strong\u003e in interest alone.\u003c\/li\u003e\n\u003cli\u003eIf you carry 20 new units past the 45-day mark, that’s \u003cstrong\u003e$7,350\u003c\/strong\u003e in avoidable monthly carrying costs.\u003c\/li\u003e\n\u003cli\u003eFocus sales efforts on high-margin upfitting packages to move these higher-ticket units faster.\u003c\/li\u003e\n\u003c\/ul\u003e\n\u003c\/div\u003e\n\u003cdiv class=\"card_smpl\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-intro-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\u003ch3\u003eUsed Van Turn and Capital Efficiency\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cul class=\"lst_crct_blog\"\u003e\n\u003cli\u003eUsed vans, which are lower cost, should aim for a DSI of \u003cstrong\u003e60 days\u003c\/strong\u003e or less for optimal cash flow.\u003c\/li\u003e\n\u003cli\u003eEvery day over 60 adds about \u003cstrong\u003e$2.68\u003c\/strong\u003e in interest per $35k unit financed.\u003c\/li\u003e\n\u003cli\u003eSlow-moving used stock increases your overall weighted average cost of inventory, defintely impacting profitability.\u003c\/li\u003e\n\u003cli\u003eIf vehicle preparation and onboarding takes 14+ days, your actual effective DSI shortens your sales window significantly.\u003c\/li\u003e\n\u003c\/ul\u003e\n\u003c\/div\u003e\n\u003c\/div\u003e\u003cbr\u003e\n\u003ch2\u003e\u003cspan style=\"color: #126CFF;\"\u003eWhat percentage of revenue comes from recurring service and lease renewals?\n\u003c\/span\u003e\u003c\/h2\u003e\n\u003cp\u003eThe core metric for the Commercial Vehicle Dealership is ensuring recurring service and lease renewal revenue covers your \u003cstrong\u003e$23,800\u003c\/strong\u003e in fixed overhead before factoring in unit sales. Honestly, if that fixed revenue stream isn't covering rent, utilities, and insurance, you're defintely running a high-risk, transaction-dependent model, and you should check \u003ca href=\"\/blogs\/operating-costs\/commercial-vehicle-dealership\"\u003eAre Your Operating Costs For Commercial Vehicle Dealership Efficiently Managed?\u003c\/a\u003e to see where cuts might be possible.\u003c\/p\u003e\n\u003cdiv class=\"container_2_clmn_row\"\u003e\n\u003cdiv class=\"card_smpl\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-intro-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\u003ch3\u003eCovering Fixed Costs\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cul class=\"lst_crct_blog\"\u003e\n\u003cli\u003eTarget monthly recurring revenue (MRR) must exceed \u003cstrong\u003e$23,800\u003c\/strong\u003e.\u003c\/li\u003e\n\u003cli\u003eThis baseline covers rent, utilities, and insurance costs.\u003c\/li\u003e\n\u003cli\u003eUnit sales revenue then becomes pure margin contribution above fixed costs.\u003c\/li\u003e\n\u003cli\u003eIf service contracts only represent \u003cstrong\u003e15%\u003c\/strong\u003e of total revenue, sales volume must be high just to stay afloat.\u003c\/li\u003e\n\u003c\/ul\u003e\n\u003c\/div\u003e\n\u003cdiv class=\"card_smpl blue_card\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-colons-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\u003ch3\u003eLeasing Stability vs. Sales Risk\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cul class=\"lst_crct_blog\"\u003e\n\u003cli\u003eLeasing agreements provide necessary, predictable cash flow streams.\u003c\/li\u003e\n\u003cli\u003eUnit sales transactions are inherently lumpy and hard to forecast.\u003c\/li\u003e\n\u003cli\u003ePush upfitting attachments to boost service attachment rates immediately.\u003c\/li\u003e\n\u003cli\u003eIf lease renewals drop below \u003cstrong\u003e85%\u003c\/strong\u003e annually, churn risk rises fast.\u003c\/li\u003e\n\u003c\/ul\u003e\n\u003c\/div\u003e\n\u003c\/div\u003e\u003cbr\u003e\u003cbr\u003e\u003cbr\u003e \u003cdiv class=\"card_smpl\"\u003e\n\n\u003cdiv class=\"double_border\"\u003e\n\n\u003cdiv class=\"card_smpl_header\"\u003e\n\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-plus-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\n\u003ch3\u003eKey Takeaways\u003c\/h3\u003e\n\n\u003c\/div\u003e\n\n\u003cul class=\"lst_crct_blog\"\u003e\n\n\u003cli\u003eMaximizing profitability requires optimizing the gross margin stack across vehicle sales, F\u0026amp;I penetration (target 65%+), and service income.\u003c\/li\u003e\n\n\u003cli\u003eRapid inventory turnover, aiming for 6–8 turns annually, is essential to mitigate the high capital costs associated with floorplan financing.\u003c\/li\u003e\n\n\u003cli\u003eThe Service Absorption Rate must consistently exceed 80% to ensure the service department covers the substantial annual fixed overhead of $755,600.\u003c\/li\u003e\n\n\u003cli\u003eDealership success depends on ensuring the true Lifetime Value of a fleet customer significantly outweighs the Customer Acquisition Cost (CAC).\u003c\/li\u003e\n\n\u003c\/ul\u003e\n\n\u003c\/div\u003e\n\n\u003c\/div\u003e\u003cbr\u003e\u003cbr\u003e\n\u003ch2\u003eKPI 1\n: \u003cspan style=\"color: #126CFF;\"\u003eGross Profit Per Unit (GPU)\n\u003c\/span\u003e\n\u003c\/h2\u003e\u003cbr\u003e\n\u003cdiv class=\"card_smpl\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-intro-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eDefinition\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cp\u003eGross Profit Per Unit (GPU) is the money you make on a single vehicle sale after subtracting the Cost of Goods Sold (COGS). This metric tells you the baseline profitability of every truck or van that leaves your lot. For your truck sales, you need to aim for a GPU of \u003cstrong\u003e$5,000 or higher\u003c\/strong\u003e, and you should check this performance \u003cstrong\u003edaily or weekly\u003c\/strong\u003e.\u003c\/p\u003e\n\u003c\/div\u003e\u003cbr\u003e\n\u003cdiv class=\"container_2_clmn_row\"\u003e\n\u003cdiv class=\"card_smpl blue_card\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-plus-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eAdvantages\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cul class=\"lst_crct_blog\"\u003e\n\u003cli\u003ePinpoints the true margin on specific vehicle types.\u003c\/li\u003e\n\u003cli\u003eDrives better negotiation discipline on acquisition costs.\u003c\/li\u003e\n\u003cli\u003eHelps manage the sales mix between higher-margin used and new units.\u003c\/li\u003e\n\u003c\/ul\u003e\n\u003c\/div\u003e\n\u003cdiv class=\"card_smpl\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-minus-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eDisadvantages\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cul class=\"lst_crct_blog\"\u003e\n\u003cli\u003eIt ignores profit from ancillary sales like financing or service contracts.\u003c\/li\u003e\n\u003cli\u003eIt doesn't reflect fixed operating expenses or overhead recovery.\u003c\/li\u003e\n\u003cli\u003eAggressive pricing to move volume can artificially lower the average GPU.\u003c\/li\u003e\n\u003c\/ul\u003e\n\u003c\/div\u003e\n\u003c\/div\u003e\u003cbr\u003e\n\u003cdiv class=\"container_2_clmn_row\"\u003e\n\u003cdiv class=\"card_smpl\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-colons-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eIndustry Benchmarks\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cp\u003eFor commercial truck dealerships, the benchmark is aggressive; you must clear \u003cstrong\u003e$5,000+\u003c\/strong\u003e per truck sold just to cover operational costs effectively. This number varies widely based on whether you sell new or used inventory, but consistently hitting this floor is non-negotiable for sustainability. If your average GPU dips below this, you're definitely losing ground.\u003c\/p\u003e\n\u003c\/div\u003e\n\u003cdiv class=\"card_smpl blue_card\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-rocket-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eHow To Improve\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cul class=\"lst_crct_blog\"\u003e\n\u003cli\u003eIncrease \u003cstrong\u003eFinance \u0026amp; Insurance (F\u0026amp;I) Penetration Rate\u003c\/strong\u003e above the \u003cstrong\u003e65%+\u003c\/strong\u003e target.\u003c\/li\u003e\n\u003cli\u003ePrioritize selling higher-margin used inventory, like the projected \u003cstrong\u003e150 vans\u003c\/strong\u003e in 2026.\u003c\/li\u003e\n\u003cli\u003eNegotiate harder on acquisition costs to lower the COGS component for every unit.\u003c\/li\u003e\n\u003c\/ul\u003e\n\u003c\/div\u003e\n\u003c\/div\u003e\u003cbr\u003e\n\u003cdiv class=\"card_smpl blue_card\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-calc-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eHow To Calculate\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cp\u003eGPU is simple subtraction. You take the final selling price (Revenue) and subtract what you paid for the asset (COGS). This calculation must exclude any financing fees or service contract revenue, as those are tracked separately.\u003c\/p\u003e\n\u003cdiv class=\"card_smpl_formula\"\u003e\nGPU = Vehicle Selling Price - Cost of Goods Sold (COGS)\n\u003c\/div\u003e\n\u003cbr\u003e\n\u003cbr\u003e\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-how-calc-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eExample of Calculation\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cp\u003eSay you sell a medium-duty truck for $65,000 and your cost to acquire and prep it was $58,500. Your gross profit on that single transaction is $6,500, which beats your $5,000 target.\u003c\/p\u003e\n\u003cdiv class=\"card_smpl_formula\"\u003e\nGPU = $65,000 (Revenue) - $58,500 (COGS) = $6,500\n\u003c\/div\u003e\n\u003c\/div\u003e\u003cbr\u003e  \n\u003cdiv class=\"card_smpl\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-tips-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eTips and Trics\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cul class=\"lst_crct_blog\"\u003e\n\u003cli\u003eReview GPU \u003cstrong\u003edaily\u003c\/strong\u003e to catch pricing errors immediately.\u003c\/li\u003e\n\u003cli\u003eEnsure GPU always exceeds your \u003cstrong\u003eCustomer Acquisition Cost (CAC)\u003c\/strong\u003e.\u003c\/li\u003e\n\u003cli\u003eTrack GPU separately for new trucks versus used vans; they won't match.\u003c\/li\u003e\n\u003cli\u003eUse the \u003cstrong\u003e$5,000\u003c\/strong\u003e truck target as a hard floor for deal approval.\u003c\/li\u003e\n\u003c\/ul\u003e\n\u003c\/div\u003e\u003cbr\u003e\n\u003ch2\u003eKPI 2\n: \u003cspan style=\"color: #126CFF;\"\u003eInventory Turnover Rate (ITR)\n\u003c\/span\u003e\n\u003c\/h2\u003e\u003cbr\u003e\n\u003cdiv class=\"card_smpl\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-intro-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eDefinition\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cp\u003eInventory Turnover Rate (ITR) shows how many times you sell and replace your stock of commercial vehicles over a year. It’s crucial because holding onto trucks and vans too long ties up capital and increases holding costs. A good ITR means your assets are moving fast, directly boosting cash flow.\u003c\/p\u003e\n\u003c\/div\u003e\u003cbr\u003e\n\u003cdiv class=\"container_2_clmn_row\"\u003e\n\u003cdiv class=\"card_smpl blue_card\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-plus-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eAdvantages\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cul class=\"lst_crct_blog\"\u003e\n\u003cli\u003eIdentifies slow-moving, aged inventory needing price adjustments.\u003c\/li\u003e\n\u003cli\u003eImproves working capital efficiency by reducing cash tied up in stock.\u003c\/li\u003e\n\u003cli\u003eSignals strong market demand for specific truck or van configurations.\u003c\/li\u003e\n\u003c\/ul\u003e\n\u003c\/div\u003e\n\u003cdiv class=\"card_smpl\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-minus-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eDisadvantages\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cul class=\"lst_crct_blog\"\u003e\n\u003cli\u003eVery high ITR might mean stockouts, losing potential sales opportunities.\u003c\/li\u003e\n\u003cli\u003eIt doesn't account for the profit margin on the units sold.\u003c\/li\u003e\n\u003cli\u003eIt can pressure sales teams to offer deep discounts just to move metal.\u003c\/li\u003e\n\u003c\/ul\u003e\n\u003c\/div\u003e\n\u003c\/div\u003e\u003cbr\u003e\n\u003cdiv class=\"container_2_clmn_row\"\u003e\n\u003cdiv class=\"card_smpl\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-colons-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eIndustry Benchmarks\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cp\u003eFor commercial vehicle dealerships, the target Inventory Turnover Rate is typically between \u003cstrong\u003e6 and 8 turns\u003c\/strong\u003e annually. This range balances having enough selection versus minimizing holding costs. Falling below \u003cstrong\u003e6 turns\u003c\/strong\u003e suggests capital is trapped in inventory, which is expensive when dealing with high-value assets like new trucks.\u003c\/p\u003e\n\u003c\/div\u003e\n\u003cdiv class=\"card_smpl blue_card\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-rocket-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eHow To Improve\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cul class=\"lst_crct_blog\"\u003e\n\u003cli\u003eAggressively price older inventory that has sat for over 90 days.\u003c\/li\u003e\n\u003cli\u003eAlign purchasing strictly with the Used-to-New Sales Ratio target (e.g., 1.5:1).\u003c\/li\u003e\n\u003cli\u003eNegotiate shorter floor plan financing terms to reduce interest expense pressure.\u003c\/li\u003e\n\u003c\/ul\u003e\n\u003c\/div\u003e\n\u003c\/div\u003e\u003cbr\u003e\n\u003cdiv class=\"card_smpl blue_card\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-calc-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eHow To Calculate\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cp\u003eTo figure out your ITR, you need your Cost of Goods Sold (COGS) for the period, usually a year, and the average value of the inventory you held during that same time. We use COGS, not revenue, because inventory is valued at cost.\u003c\/p\u003e\n\u003cdiv class=\"card_smpl_formula\"\u003e\nInventory Turnover Rate = Cost of Goods Sold \/ Average Inventory Value\n\u003c\/div\u003e\n\u003cbr\u003e\n\u003cbr\u003e\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-how-calc-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eExample of Calculation\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cp\u003eSay your annual COGS was \u003cstrong\u003e$10 million\u003c\/strong\u003e, and your average inventory value held on the books was \u003cstrong\u003e$1.5 million\u003c\/strong\u003e. You must track this closely to manage the \u003cstrong\u003e$755,600\u003c\/strong\u003e in annual fixed costs.\u003c\/p\u003e\n\u003cdiv class=\"card_smpl_formula\"\u003e\nITR = $10,000,000 \/ $1,500,000 = 6.67 turns\n\u003c\/div\u003e\n\u003cp\u003eThis means you sold through your average stock \u003cstrong\u003e6.67 times\u003c\/strong\u003e last year, which is right in the target zone.\u003c\/p\u003e\n\u003c\/div\u003e\u003cbr\u003e  \n\u003cdiv class=\"card_smpl\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-tips-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eTips and Trics\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cul class=\"lst_crct_blog\"\u003e\n\u003cli\u003eReview ITR \u003cstrong\u003eweekly\u003c\/strong\u003e, not just quarterly, to catch slowdowns fast.\u003c\/li\u003e\n\u003cli\u003eTrack ITR separately for new units versus pre-owned vans and trucks.\u003c\/li\u003e\n\u003cli\u003eIf ITR is low, check if your Service Absorption Rate is covering fixed overhead.\u003c\/li\u003e\n\u003cli\u003eEnsure Average Inventory Value uses the actual cost basis, not retail price; it’s defintely a common mistake.\u003c\/li\u003e\n\u003c\/ul\u003e\n\u003c\/div\u003e\u003cbr\u003e\n\u003ch2\u003eKPI 3\n: \u003cspan style=\"color: #126CFF;\"\u003eFinance \u0026amp; Insurance (F\u0026amp;I) Penetration Rate\n\u003c\/span\u003e\n\u003c\/h2\u003e\u003cbr\u003e\n\u003cdiv class=\"card_smpl\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-intro-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eDefinition\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cp\u003eFinance \u0026amp; Insurance (F\u0026amp;I) Penetration Rate measures the percentage of total vehicle sales that include an ancillary product, like a warranty or service contract. This metric is vital because F\u0026amp;I products carry much higher gross margins than the vehicle unit itself. Hitting your target means you are maximizing the profit potential on every truck or van you move off the lot.\u003c\/p\u003e\n\u003c\/div\u003e\u003cbr\u003e\n\u003cdiv class=\"container_2_clmn_row\"\u003e\n\u003cdiv class=\"card_smpl blue_card\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-plus-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eAdvantages\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cul class=\"lst_crct_blog\"\u003e\n\u003cli\u003eDrives significantly higher gross profit per unit sold.\u003c\/li\u003e\n\u003cli\u003eCreates a predictable, high-margin ancillary income stream.\u003c\/li\u003e\n\u003cli\u003eEnhances customer lifetime value through required service touchpoints.\u003c\/li\u003e\n\u003c\/ul\u003e\n\u003c\/div\u003e\n\u003cdiv class=\"card_smpl\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-minus-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eDisadvantages\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cul class=\"lst_crct_blog\"\u003e\n\u003cli\u003eIncreased regulatory risk concerning disclosure and financing rules.\u003c\/li\u003e\n\u003cli\u003eCan lengthen the time required to close the final deal.\u003c\/li\u003e\n\u003cli\u003ePoorly chosen products lead to higher cancellation rates later on.\u003c\/li\u003e\n\u003c\/ul\u003e\n\u003c\/div\u003e\n\u003c\/div\u003e\u003cbr\u003e\n\u003cdiv class=\"container_2_clmn_row\"\u003e\n\u003cdiv class=\"card_smpl\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-colons-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eIndustry Benchmarks\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cp\u003eFor standard dealerships, penetration rates often hover between 50% and 70%. Since you are dealing with commercial clients whose uptime is directly tied to revenue, your target of \u003cstrong\u003e65%+\u003c\/strong\u003e is realistic but requires strong product alignment with fleet maintenance needs. If you sell 100 units and only 40 include a service contract, your 40% penetration means you are leaving significant profit on the table.\u003c\/p\u003e\n\u003c\/div\u003e\n\u003cdiv class=\"card_smpl blue_card\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-rocket-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eHow To Improve\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cul class=\"lst_crct_blog\"\u003e\n\u003cli\u003eMandate weekly training sessions focused solely on selling the value of uptime protection plans.\u003c\/li\u003e\n\u003cli\u003eIntegrate service contract costs directly into monthly leasing payments to smooth the sticker shock.\u003c\/li\u003e\n\u003cli\u003eAnalyze sales reports every Monday morning to identify which salespersons are lagging behind the \u003cstrong\u003e65%\u003c\/strong\u003e goal.\u003c\/li\u003e\n\u003c\/ul\u003e\n\u003c\/div\u003e\n\u003c\/div\u003e\u003cbr\u003e\n\u003cdiv class=\"card_smpl blue_card\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-calc-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eHow To Calculate\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cp\u003eTo find your penetration rate, divide the number of sales that included an F\u0026amp;I product by the total number of vehicle sales in that period. You must multiply the result by 100 to express it as a percentage. This calculation needs to happen weekly to catch issues fast.\u003c\/p\u003e\n\u003cdiv class=\"card_smpl_formula\"\u003e\n(Number of Sales with F\u0026amp;I Product \/ Total Vehicle Sales) x 100\n\u003c\/div\u003e\n\u003cbr\u003e\n\u003cbr\u003e\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-how-calc-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eExample of Calculation\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cp\u003eSay your dealership moved \u003cstrong\u003e80\u003c\/strong\u003e commercial vehicles last month. Of those 80 units, the F\u0026amp;I manager successfully sold an extended service contract or warranty to \u003cstrong\u003e55\u003c\/strong\u003e customers. This shows strong execution against your goal.\u003c\/p\u003e\n\u003cdiv class=\"card_smpl_formula\"\u003e\n(55 \/ 80) x 100 = \u003cstrong\u003e68.75%\u003c\/strong\u003e\n\u003c\/div\u003e\n\u003c\/div\u003e\u003cbr\u003e  \n\u003cdiv class=\"card_smpl\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-tips-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eTips and Trics\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cul class=\"lst_crct_blog\"\u003e\n\u003cli\u003eTrack penetration by individual salesperson to spot coaching needs.\u003c\/li\u003e\n\u003cli\u003eSeparate the rate for new trucks versus used vans; they often sell different products.\u003c\/li\u003e\n\u003cli\u003eEnsure the F\u0026amp;I manager’s compensation rewards penetration percentage, not just total sales volume.\u003c\/li\u003e\n\u003cli\u003eReview cancellation rates monthly; high cancellations defintely signal poor product fit or aggressive selling.\u003c\/li\u003e\n\u003c\/ul\u003e\n\u003c\/div\u003e\u003cbr\u003e\n\u003ch2\u003eKPI 4\n: \u003cspan style=\"color: #126CFF;\"\u003eService Absorption Rate\n\u003c\/span\u003e\n\u003c\/h2\u003e\u003cbr\u003e\n\u003cdiv class=\"card_smpl\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-intro-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eDefinition\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cp\u003eService Absorption Rate measures what percentage of your fixed dealership overhead the service department’s gross profit covers. This KPI shows how much your service bay is contributing to keeping the lights on, separate from selling trucks and vans. The goal for commercial dealerships is covering at least \u003cstrong\u003e80%\u003c\/strong\u003e of fixed costs monthly.\u003c\/p\u003e\n\u003c\/div\u003e\u003cbr\u003e\n\u003cdiv class=\"container_2_clmn_row\"\u003e\n\u003cdiv class=\"card_smpl blue_card\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-plus-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eAdvantages\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cul class=\"lst_crct_blog\"\u003e\n\u003cli\u003eProvides a stable measure of service department profitability contribution.\u003c\/li\u003e\n\u003cli\u003eHighlights the importance of recurring maintenance revenue over unit sales volatility.\u003c\/li\u003e\n\u003cli\u003eForces management to control fixed costs, like facility expenses, aggressively.\u003c\/li\u003e\n\u003c\/ul\u003e\n\u003c\/div\u003e\n\u003cdiv class=\"card_smpl\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-minus-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eDisadvantages\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cul class=\"lst_crct_blog\"\u003e\n\u003cli\u003eA high rate can mask poor gross profit per unit (GPU) performance in sales.\u003c\/li\u003e\n\u003cli\u003eIt relies entirely on accurately separating fixed overhead from variable costs.\u003c\/li\u003e\n\u003cli\u003eIt doesn't reflect technician utilization or efficiency within the service bay.\u003c\/li\u003e\n\u003c\/ul\u003e\n\u003c\/div\u003e\n\u003c\/div\u003e\u003cbr\u003e\n\u003cdiv class=\"container_2_clmn_row\"\u003e\n\u003cdiv class=\"card_smpl\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-colons-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eIndustry Benchmarks\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cp\u003eFor specialized commercial vehicle operations, you should aim for \u003cstrong\u003e80%\u003c\/strong\u003e absorption or better monthly. If you are consistently below \u003cstrong\u003e65%\u003c\/strong\u003e, your service department is not covering its baseline operating structure. Hitting the \u003cstrong\u003e80%+\u003c\/strong\u003e target means service is a reliable profit engine, not just a necessary cost center.\u003c\/p\u003e\n\u003c\/div\u003e\n\u003cdiv class=\"card_smpl blue_card\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-rocket-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eHow To Improve\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cul class=\"lst_crct_blog\"\u003e\n\u003cli\u003eIncrease service labor rates to better cover overhead allocation per hour billed.\u003c\/li\u003e\n\u003cli\u003eFocus upselling on high-margin service contracts or fleet maintenance packages.\u003c\/li\u003e\n\u003cli\u003eReduce non-essential fixed costs, lowering the \u003cstrong\u003e$755,600\u003c\/strong\u003e annual overhead baseline.\u003c\/li\u003e\n\u003c\/ul\u003e\n\u003c\/div\u003e\n\u003c\/div\u003e\u003cbr\u003e\n\u003cdiv class=\"card_smpl blue_card\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-calc-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eHow To Calculate\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cp\u003eYou must first determine the monthly fixed overhead before calculating the absorption rate. If your annual fixed costs are \u003cstrong\u003e$755,600\u003c\/strong\u003e, your monthly fixed overhead is \u003cstrong\u003e$62,967\u003c\/strong\u003e ($755,600 \/ 12). You then divide the service department's gross profit by this monthly fixed amount.\u003c\/p\u003e\n\u003cdiv class=\"card_smpl_formula\"\u003e\nService Absorption Rate = (Service Department Gross Profit \/ Monthly Fixed Dealership Overhead)\n\u003c\/div\u003e\n\u003cbr\u003e\n\u003cbr\u003e\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-how-calc-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eExample of Calculation\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cp\u003eSay your fixed overhead is \u003cstrong\u003e$755,600\u003c\/strong\u003e annually, meaning monthly fixed costs are \u003cstrong\u003e$62,967\u003c\/strong\u003e. If your service department generated \u003cstrong\u003e$50,374\u003c\/strong\u003e in gross profit last month, you can see how close you are to the target.\u003c\/p\u003e\n\u003cdiv class=\"card_smpl_formula\"\u003e\nService Absorption Rate = ($50,374 \/ $62,967) = \u003cstrong\u003e80.0%\u003c\/strong\u003e\n\u003c\/div\u003e\n\u003cp\u003eThis means the service department covered \u003cstrong\u003e80%\u003c\/strong\u003e of the dealership's fixed structure that month, hitting the minimum target.\u003c\/p\u003e\n\u003c\/div\u003e\u003cbr\u003e  \n\u003cdiv class=\"card_smpl\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-tips-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eTips and Trics\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cul class=\"lst_crct_blog\"\u003e\n\u003cli\u003eTrack this KPI monthly, aligning service profit against the \u003cstrong\u003e$755,600\u003c\/strong\u003e annual fixed cost.\u003c\/li\u003e\n\u003cli\u003eIf absorption dips below \u003cstrong\u003e75%\u003c\/strong\u003e, immediately review service labor capacity utilization.\u003c\/li\u003e\n\u003cli\u003eEnsure all service department administrative salaries are correctly classified as fixed overhead.\u003c\/li\u003e\n\u003cli\u003eUse absorption as a check against aggressive discounting on vehicle sales to cover overhead.\u003c\/li\u003e\n\u003c\/ul\u003e\n\u003c\/div\u003e\u003cbr\u003e\n\u003ch2\u003eKPI 5\n: \u003cspan style=\"color: #126CFF;\"\u003eUsed-to-New Sales Ratio\n\u003c\/span\u003e\n\u003c\/h2\u003e\u003cbr\u003e\n\u003cdiv class=\"card_smpl\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-intro-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eDefinition\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cp\u003eThe Used-to-New Sales Ratio measures the volume balance between used and new commercial vehicles sold. This metric is key because used inventory typically delivers higher gross profit margins than new stock. For 2026, the plan sets a target of moving \u003cstrong\u003e150 used vans\u003c\/strong\u003e for every \u003cstrong\u003e100 new trucks\u003c\/strong\u003e sold.\u003c\/p\u003e\n\u003c\/div\u003e\u003cbr\u003e\n\u003cdiv class=\"container_2_clmn_row\"\u003e\n\u003cdiv class=\"card_smpl blue_card\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-plus-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eAdvantages\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cul class=\"lst_crct_blog\"\u003e\n\u003cli\u003eDirectly shows if the sales mix supports higher overall profitability.\u003c\/li\u003e\n\u003cli\u003eIndicates success in moving higher-margin used assets quickly.\u003c\/li\u003e\n\u003cli\u003eHelps manage capital allocation by favoring lower-cost used inventory acquisition.\u003c\/li\u003e\n\u003c\/ul\u003e\n\u003c\/div\u003e\n\u003cdiv class=\"card_smpl\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-minus-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eDisadvantages\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cul class=\"lst_crct_blog\"\u003e\n\u003cli\u003eVolume ratio ignores the actual dollar value of the units sold.\u003c\/li\u003e\n\u003cli\u003eA very high ratio might mask issues in securing desirable new vehicle allocations.\u003c\/li\u003e\n\u003cli\u003eIt doesn't account for the cost of reconditioning used vehicles.\u003c\/li\u003e\n\u003c\/ul\u003e\n\u003c\/div\u003e\n\u003c\/div\u003e\u003cbr\u003e\n\u003cdiv class=\"container_2_clmn_row\"\u003e\n\u003cdiv class=\"card_smpl\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-colons-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eIndustry Benchmarks\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cp\u003eFor specialized commercial dealerships focused on maximizing contribution margin, a ratio significantly favoring used units is often the goal. While general retail might aim for 2:1, targeting \u003cstrong\u003e15:1\u003c\/strong\u003e shows a strong operational commitment to maximizing profit per transaction through used inventory. You defintely need to monitor this closely against your Gross Profit Per Unit (GPU) target of \u003cstrong\u003e$5,000+\u003c\/strong\u003e for trucks.\u003c\/p\u003e\n\u003c\/div\u003e\n\u003cdiv class=\"card_smpl blue_card\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-rocket-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eHow To Improve\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cul class=\"lst_crct_blog\"\u003e\n\u003cli\u003eAggressively price new trucks to move volume and maintain pipeline flow.\u003c\/li\u003e\n\u003cli\u003eOffer enhanced trade-in values specifically for older vans entering inventory.\u003c\/li\u003e\n\u003cli\u003eTie sales commissions heavily toward used unit sales volume targets.\u003c\/li\u003e\n\u003c\/ul\u003e\n\u003c\/div\u003e\n\u003c\/div\u003e\u003cbr\u003e\n\u003cdiv class=\"card_smpl blue_card\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-calc-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eHow To Calculate\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cp\u003eTo find this ra\ntio, you simply divide the total number of used vehicles sold during the period by the total number of new vehicles sold in that same period.\u003c\/p\u003e\n\u003cdiv class=\"card_smpl_formula\"\u003e\nUsed-to-New Sales Ratio = Total Used Units Sold \/ Total New Units Sold\n\u003c\/div\u003e\n\u003cbr\u003e\n\u003cbr\u003e\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-how-calc-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eExample of Calculation\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cp\u003eIf you sell \u003cstrong\u003e150 used vans\u003c\/strong\u003e and \u003cstrong\u003e100 new trucks\u003c\/strong\u003e in a given month, you calculate the ratio by dividing the used volume by the new volume. This confirms you are hitting your strategic balance.\u003c\/p\u003e\n\u003cdiv class=\"card_smpl_formula\"\u003e\nUsed-to-New Sales Ratio = 150 Used Vans \/ 100 New Trucks = 1.5:1\n\u003c\/div\u003e\n\u003c\/div\u003e\u003cbr\u003e  \n\u003cdiv class=\"card_smpl\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-tips-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eTips and Trics\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cul class=\"lst_crct_blog\"\u003e\n\u003cli\u003eReview this ratio \u003cstrong\u003emonthly\u003c\/strong\u003e to catch mix shifts early.\u003c\/li\u003e\n\u003cli\u003eEnsure the ratio calculation uses unit volume, not revenue dollars.\u003c\/li\u003e\n\u003cli\u003eTrack the ratio separately for vans versus trucks if margins differ widely.\u003c\/li\u003e\n\u003cli\u003eIf the ratio falls below the \u003cstrong\u003e15:1\u003c\/strong\u003e target, investigate new truck pipeline health immediately.\u003c\/li\u003e\n\u003c\/ul\u003e\n\u003c\/div\u003e\u003cbr\u003e\n\u003ch2\u003eKPI 6\n: \u003cspan style=\"color: #126CFF;\"\u003eCustomer Acquisition Cost (CAC)\n\u003c\/span\u003e\n\u003c\/h2\u003e\u003cbr\u003e\n\u003cdiv class=\"card_smpl\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-intro-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eDefinition\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cp\u003eCustomer Acquisition Cost (CAC) is the total money spent on marketing and sales divided by how many vehicles you actually sold or leased that month. This metric tells you if your sales engine is efficient. If CAC is higher than your Gross Profit Per Unit (GPU), you are losing money on every new customer you bring in, which is a defintely bad sign.\u003c\/p\u003e\n\u003c\/div\u003e\u003cbr\u003e\n\u003cdiv class=\"container_2_clmn_row\"\u003e\n\u003cdiv class=\"card_smpl blue_card\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-plus-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eAdvantages\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cul class=\"lst_crct_blog\"\u003e\n\u003cli\u003eVerifies unit economics are profitable against GPU.\u003c\/li\u003e\n\u003cli\u003eGuides budget allocation between marketing and sales teams.\u003c\/li\u003e\n\u003cli\u003eIdentifies which acquisition channels are too expensive.\u003c\/li\u003e\n\u003c\/ul\u003e\n\u003c\/div\u003e\n\u003cdiv class=\"card_smpl\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-minus-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eDisadvantages\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cul class=\"lst_crct_blog\"\u003e\n\u003cli\u003eHides the true cost if fixed overhead isn't properly allocated.\u003c\/li\u003e\n\u003cli\u003eDoesn't account for customer lifetime value (LTV) or repeat business.\u003c\/li\u003e\n\u003cli\u003eCan fluctuate wildly based on large, infrequent marketing campaigns.\u003c\/li\u003e\n\u003c\/ul\u003e\n\u003c\/div\u003e\n\u003c\/div\u003e\u003cbr\u003e\n\u003cdiv class=\"container_2_clmn_row\"\u003e\n\u003cdiv class=\"card_smpl\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-colons-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eIndustry Benchmarks\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cp\u003eFor commercial dealerships, CAC must be kept low because profit margins (GPU) are often tight, especially on new units. A healthy benchmark means CAC should be \u003cstrong\u003eless than 50%\u003c\/strong\u003e of the GPU, ideally much lower. If your GPU target is \u003cstrong\u003e$5,000\u003c\/strong\u003e per truck, you want your CAC well under \u003cstrong\u003e$2,500\u003c\/strong\u003e.\u003c\/p\u003e\n\u003c\/div\u003e\n\u003cdiv class=\"card_smpl blue_card\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-rocket-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eHow To Improve\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cul class=\"lst_crct_blog\"\u003e\n\u003cli\u003eBoost Gross Profit Per Unit (GPU) through better negotiation or F\u0026amp;I sales.\u003c\/li\u003e\n\u003cli\u003eShift marketing spend toward high-converting, low-cost channels like referrals.\u003c\/li\u003e\n\u003cli\u003eImprove sales team efficiency to close more deals with existing leads.\u003c\/li\u003e\n\u003c\/ul\u003e\n\u003c\/div\u003e\n\u003c\/div\u003e\u003cbr\u003e\n\u003cdiv class=\"card_smpl blue_card\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-calc-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eHow To Calculate\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cp\u003eYou calculate CAC by summing all costs related to acquiring a customer—salaries for the sales team, advertising spend, lead generation tools—and dividing that total by the number of new units sold or leased in that period.\u003c\/p\u003e\n\u003cdiv class=\"card_smpl_formula\"\u003e\nCAC = (Total Sales Expense + Total Marketing Expense) \/ Total Units Sold\n\u003c\/div\u003e\n\u003cbr\u003e\n\u003cbr\u003e\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-how-calc-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eExample of Calculation\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cp\u003eIf total sales and marketing expenses for 2026 hit \u003cstrong\u003e$300,000\u003c\/strong\u003e to move \u003cstrong\u003e250\u003c\/strong\u003e total units (150 vans and 100 trucks), the CAC is calculated against that total volume. This is a crucial check against your expected \u003cstrong\u003e$5,000+\u003c\/strong\u003e GPU target.\u003c\/p\u003e\n\u003cdiv class=\"card_smpl_formula\"\u003e\nCAC = $300,000 \/ 250 Units = $1,200 per Unit Sold\n\u003c\/div\u003e\n\u003c\/div\u003e\u003cbr\u003e  \n\u003cdiv class=\"card_smpl\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-tips-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eTips and Trics\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cul class=\"lst_crct_blog\"\u003e\n\u003cli\u003eReview CAC versus GPU every single month, no exceptions.\u003c\/li\u003e\n\u003cli\u003eSeparate true marketing spend from sales commissions in your tracking.\u003c\/li\u003e\n\u003cli\u003eIf marketing is \u003cstrong\u003e40%\u003c\/strong\u003e of total acquisition cost, scrutinize that 40% first.\u003c\/li\u003e\n\u003cli\u003eIf CAC exceeds GPU for two months running, freeze discretionary spending.\u003c\/li\u003e\n\u003c\/ul\u003e\n\u003c\/div\u003e\u003cbr\u003e\n\u003ch2\u003eKPI 7\n: \u003cspan style=\"color: #126CFF;\"\u003eOperating Expense Ratio (OER)\n\u003c\/span\u003e\n\u003c\/h2\u003e\u003cbr\u003e\n\u003cdiv class=\"card_smpl\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-intro-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eDefinition\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cp\u003eThe Operating Expense Ratio (OER) shows how much money you spend running the business—salaries, rent, marketing—compared to the revenue you bring in from sales and leases. It’s a crucial measure of operational efficiency, telling you if your overhead is under control relative to your top line. We target keeping this ratio below \u003cstrong\u003e10%\u003c\/strong\u003e, excluding the cost of the inventory itself.\u003c\/p\u003e\n\u003c\/div\u003e\u003cbr\u003e\n\u003cdiv class=\"container_2_clmn_row\"\u003e\n\u003cdiv class=\"card_smpl blue_card\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-plus-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eAdvantages\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cul class=\"lst_crct_blog\"\u003e\n\u003cli\u003eDirectly shows how much revenue turns into profit before interest and taxes.\u003c\/li\u003e\n\u003cli\u003ePinpoints overhead creep before it becomes a major cash drain.\u003c\/li\u003e\n\u003cli\u003eAllows for better forecasting of required sales volume to cover fixed costs.\u003c\/li\u003e\n\u003c\/ul\u003e\n\u003c\/div\u003e\n\u003cdiv class=\"card_smpl\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-minus-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eDisadvantages\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cul class=\"lst_crct_blog\"\u003e\n\u003cli\u003eCan lead to underinvestment in growth if the \u003cstrong\u003e10%\u003c\/strong\u003e target is aggressively pursued.\u003c\/li\u003e\n\u003cli\u003eExcludes Cost of Goods Sold (COGS), hiding the true margin pressure from vehicle acquisition.\u003c\/li\u003e\n\u003cli\u003eA very low ratio might suggest insufficient staffing or marketing spend to capture market share.\u003c\/li\u003e\n\u003c\/ul\u003e\n\u003c\/div\u003e\n\u003c\/div\u003e\u003cbr\u003e\n\u003cdiv class=\"container_2_clmn_row\"\u003e\n\u003cdiv class=\"card_smpl\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-colons-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eIndustry Benchmarks\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cp\u003eFor commercial dealerships, OER benchmarks vary widely based on inventory strategy. A high-volume, low-margin operation might see OER closer to \u003cstrong\u003e15%\u003c\/strong\u003e to \u003cstrong\u003e20%\u003c\/strong\u003e if they include all operational costs. Since we are specifically excluding inventory costs (COGS), a target below \u003cstrong\u003e10%\u003c\/strong\u003e suggests excellent control over fixed overhead like the \u003cstrong\u003e$755,600\u003c\/strong\u003e annual costs mentioned in service absorption planning.\u003c\/p\u003e\n\u003c\/div\u003e\n\u003cdiv class=\"card_smpl blue_card\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-rocket-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eHow To Improve\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cul class=\"lst_crct_blog\"\u003e\n\u003cli\u003eAggressively grow high-margin recurring revenue streams like leasing agreements.\u003c\/li\u003e\n\u003cli\u003eDrive up the Finance \u0026amp; Insurance (F\u0026amp;I) Penetration Rate above \u003cstrong\u003e65%\u003c\/strong\u003e.\u003c\/li\u003e\n\u003cli\u003eEnsure the service department covers at least \u003cstrong\u003e80%\u003c\/strong\u003e of the \u003cstrong\u003e$755,600\u003c\/strong\u003e annual fixed overhead.\u003c\/li\u003e\n\u003c\/ul\u003e\n\u003c\/div\u003e\n\u003c\/div\u003e\u003cbr\u003e\n\u003cdiv class=\"card_smpl blue_card\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-calc-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eHow To Calculate\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cp\u003eYou calculate OER by summing all operating expenses—fixed costs like rent and salaries, plus variable costs like sales commissions—and dividing that total by your total revenue for the period. Remember, you must subtract the Cost of Goods Sold (COGS), which is the cost of the vehicles themselves, before applying this ratio.\u003c\/p\u003e\n\u003cdiv class=\"card_smpl_formula\"\u003e\nOER = (Total Operating Expenses - COGS) \/ Total Revenue\n\u003c\/div\u003e\n\u003cbr\u003e\n\u003cbr\u003e\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-how-calc-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eExample of Calculation\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cp\u003eSay for May, your dealership generated \u003cstrong\u003e$850,000\u003c\/strong\u003e in total revenue from sales and leasing. Your total operating expenses, including administrative salaries and marketing, were \u003cstrong\u003e$95,000\u003c\/strong\u003e. Since we exclude inventory cost, we use the full $95,000 as OpEx for this specific calculation. Here’s the quick math:\u003c\/p\u003e\n\u003cdiv class=\"card_smpl_formula\"\u003e\nOER = ($95,000 \/ $850,000) = 0.1118 or \u003cstrong\u003e11.18%\u003c\/strong\u003e\n\u003c\/div\u003e\n\u003cp\u003eThis result of \u003cstrong\u003e11.18%\u003c\/strong\u003e is above the \u003cstrong\u003e10%\u003c\/strong\u003e target, meaning you spent too much running the business relative to the revenue generated that month. What this estimate hides is how much of that $95,000 is fixed versus variable; you’d defintely want to see variable costs drop next month.\u003c\/p\u003e\n\u003c\/div\u003e\u003cbr\u003e  \n\u003cdiv class=\"card_smpl\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-tips-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eTips and Trics\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cul class=\"lst_crct_blog\"\u003e\n\u003cli\u003eTrack fixed OpEx monthly against the \u003cstrong\u003e$755,600\u003c\/strong\u003e annual budget baseline.\u003c\/li\u003e\n\u003cli\u003eEnsure variable OpEx scales predictably with unit sales volume.\u003c\/li\u003e\n\u003cli\u003eCompare OER performance against the Service Absorption Rate monthly.\u003c\/li\u003e\n\u003cli\u003e\n\u003c\/li\u003e\n\u003c\/ul\u003e\n\u003c\/div\u003e","brand":"FinancialModelsLab","offers":[{"title":"Default Title","offer_id":49303659708659,"sku":"commercial-vehicle-dealership-kpi-metrics","price":0.0,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0522\/6191\/2762\/files\/commercial-vehicle-dealership-kpi-metrics.webp?v=1782679394","url":"https:\/\/financialmodelslab.com\/products\/commercial-vehicle-dealership-kpi-metrics","provider":"Financial Models Lab","version":"1.0","type":"link"}