Menefee: Is Your Shop Bleeding Money in the Parts Department?

Let’s be honest with each other for a minute. I’ve always tried to be open about what’s going on in my shop, the wins and the struggles. Not because I have it all figured out, but because I know how easy it is to feel like you’re the only one dealing with certain problems. The truth is, most of us are fighting the same battles behind the scenes, especially the ones we don’t always want to admit out loud. 

For me, one of those problem areas was parts ordering and returns. I knew for a long time that it wasn’t being handled as tightly as it should be. I also convinced myself it wasn’t that bad. We weren’t reordering parts because we lost them. We weren’t drowning in disorganization. I’ve been in shops where you couldn’t find an invoice if your life depended on it, and that wasn’t us. So I let it slide. 

The Problem I Knew Was There—and Ignored

That was a mistake. 

When I finally stepped in and took over the parts process myself, I realized we were quietly losing money in multiple ways. Small amounts here and there that added up fast. Missed credits. Pricing discrepancies. Returns that never actually got returned. None of it was dramatic on its own, but together it was enough to matter. 

The first thing I had to own was that I created part of the problem. I had one estimator handling supplements, negotiations, parts ordering, and returns. When we were slower, it seemed manageable. When business picked up, it wasn’t. They kept telling me they had it under control, and I wanted to believe that. Meanwhile, I was walking past the parts return area every day, seeing parts sitting there too long, and not stepping in. 

That’s on me. 

Once I got into the process, a few things became very clear. 

Why Parts Can’t Be a Side Job

First, parts is its own job. It cannot be a side responsibility. Between insurance requirements, vendor issues, damaged parts, wrong parts, and tracking returns, there is too much moving around for it to be handled halfway. Estimators already have more than enough on their plate. Expecting them to manage parts at a high level while also fighting with insurance companies is unrealistic. If you don’t have a dedicated parts person, you need to seriously consider it. 

Second, my technicians were not the issue, but they did need clearer direction. Communication was not the problem. When something was wrong, they spoke up immediately. The breakdown was in what happened next. Incorrect or damaged parts would sit on carts until the end of the job, then get moved to the return area. By that point, we were often outside the return window or facing restocking fees. 

The fix was simple but effective. As soon as a part is identified as wrong, damaged, or not needed, it goes straight to a designated return area. No waiting. No extra steps. No assumption that someone else will handle it later. That one change alone has made a noticeable difference. 

Third, we had too many people touching the same process without clear ownership. Return slips were being printed, parts were being staged, and everyone assumed the return had been completed. In reality, the vendor had never been contacted, and the part was never picked up. By the time we caught it, we were stuck with it. 

Now, only one person handles return documentation and vendor communication. No exceptions. That eliminated the confusion almost immediately. 

Another area that surprised me was pricing. When one person orders and receives parts, discrepancies stand out. If a part is quoted one way and billed another, it gets noticed right away. When multiple people are involved, those differences get lost. Front office staff may check parts in without realizing something is off. Estimators may not have the time to chase down every price issue. Having a single point of responsibility brings accountability and clarity. 

There is also real value in simply paying closer attention to what is being ordered. For example, if you are ordering a used door, do you automatically order all the moldings and handles that might come with it, or do you wait to see what arrives in usable condition? That decision can save money if handled correctly. On the flip side, missing related components like a clock spring when ordering an airbag can create delays and headaches later. A dedicated parts role helps catch both over-ordering and under-ordering before they become problems. 

What I’ve learned through all of this is that the parts department can quietly drain profit if it isn’t managed with intention. It’s easy to focus on larger issues like insurance negotiations or cycle time because they feel more urgent. But parts is where a lot of money is either made or lost, often without you noticing until it adds up. 

I’m still figuring it out. I don’t have a perfect system, and I’ve already had to adjust what I thought would work. That’s part of running a shop. Processes that work today may need to change tomorrow as volume shifts or staffing changes. 

Don’t Ignore What You Already Know Is Broken

If there’s one thing I would pass along, it’s this. Don’t ignore the issues you already know exist. Most of us can walk through our shops and point to at least one area that isn’t where it should be. The longer we put it off, the more it costs us. 

Take the time to dig in, even if it’s uncomfortable. Put structure around the problem. Assign ownership. Simplify the process. And if the first solution doesn’t work, adjust and keep moving. 

We’re all dealing with something. You’re not alone in it.