Gross Profit Percentage (GP%) for Auto Repair Shops

Revenue can look great and still leave you wondering where the money went at the end of the month. Gross Profit Percentage is the number that explains it — the difference between money coming in and what you actually keep after the direct cost of doing the work.

The Formula

GP% = (Revenue − Cost of Goods Sold) ÷ Revenue × 100

Cost of Goods Sold (COGS) is what it directly costs you to deliver the job — parts cost, and for labor GP%, technician wages tied to that labor.

Why You Should Track Parts and Labor GP% Separately

Blending parts and labor into one GP% number hides which side of the business is actually the problem. They move differently: Parts GP% tracks your markup/matrix discipline. Labor GP% tracks your ELR and pay structure. A shop can be strong on one and weak on the other and never know it if the two are combined.

Where GP% Quietly Erodes

• Matrix drift — techs or advisors deviating from the pricing matrix "just this once"
• Comebacks — parts and labor given away on a redo, no revenue to offset the cost
• Shop supplies not billed consistently
• Special order parts priced like stock parts, missing the extra freight/handling cost

Getting a Real Read on It

GP% is only useful if your COGS numbers are accurate, which means daily closeout data has to be entered consistently rather than reconstructed at month-end from memory. That daily discipline is the difference between a GP% you can trust and one that's a guess dressed up as a report — which is exactly what the Daily Input and Shop Snapshot in ShopDocs' Know Your Numbers module are built for.