Inventory Management Best Practices for Auto Repair Shops

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May 22, 2023

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Read time: 3 min

The answer to that question depends on a number of factors, and getting the right categorization for each part is crucial for maintaining healthy profit margins while minimizing the risk of rush orders and frustrated customers.

Inventory and Stock Management to Minimize Complexity

When you and your team are replacing parts during repairs, it’s important to consider what parts you have on hand versus what parts you’ll need to order.

If you don’t, you risk overstocking and sinking money into too many units of a particular type of part, or understocking and making a customer wait while you hope that the expedited shipping for a part pulls through.

By having the right inventory and stock management processes in place, you can make it easier for your service advisors and technicians to avoid frustrations.

Here are some best practices for inventory and stock management at your auto repair shop.

What Counts as Inventory? What Counts as Stock?

First, a quick refresher on the difference between inventory and stock.

“Inventory” includes the parts you sell to customers and the parts that your shop uses to make repairs (such as wrenches, alignment machines, and engine hoists).

On the other hand, “stock” only includes the parts you sell to customers during the usual course of repair work.

Regardless of whether a part falls under inventory or stock, it’s crucial to label every single parts transaction to reduce your risk of accounting gaps, billing inconsistencies, and more.

You can avoid these pitfalls by creating a streamlined parts management and reconciliation process.

Make Any Necessary Adjustments to Your Parts Sorting System

It might seem natural to label all your parts, even the ones you purchase multiple times per month, as inventory. However, while this process seems efficient, it introduces two problems.

First, you won’t be able to get the clearest view of your shop’s metrics. Say you buy spark plugs and sell them to your customers over 30 times a month.

If you count them as inventory, you won’t have a clear picture of just how many spark plugs you’re purchasing a month.

Second, you’ll be adding another layer of complexity to your inventory list. If you buy spark plugs, log them as inventory, then sell them to customers and put them in their vehicles, you’ll have to log all of those steps.

This can quickly lead to confusion.

If you count the spark plugs as part of stock, you’ll have a much clearer view of the metrics and will be better able to track whether or not you have enough of this oft-used, essential part.

The best way to determine when you should count a part as stock as opposed to inventory is to ask yourself these basic questions:

  • What is the business function of this part?
  • How often does my shop order this part?
  • Is this part sold to customers?
  • How often does my shop sell it?  

The answers to each of these questions will get you to your answer. For example, a tire’s business function is to be used in a customer’s vehicle (meaning, you sell it to the customer). If your shop orders a particular brand and size of tires an average of 40 times per month and sells it an average of 38 times per month, you should categorize that as stock.

Accurately Maintain and Track Stock levels

Ordering too much of a stock part can cut into your shop’s profit margin, but ordering too little of it could keep customer vehicles at your shop longer.

How much of a part to order, and how often to place those orders, depends on your shop’s unique circumstances.

For instance, let’s say you determine that your shop needs to sell customers a part only an average of ten times per month, and a few nearby auto parts stores tend to keep that part in stock.

In that case, you could adopt a “just-in-time” approach toward that part, buying it as close as possible to the time you’ll need it.

Tekmetric: A Shop Management System That Makes Managing Parts Easy

Metrics are the key to accurately maintaining and tracking your stock levels, however, tallying these numbers by hand can be time-consuming. By using a shop management system like Tekmetric, you can simplify and speed up the parts management process.

With Tekmetric, you can log parts as on-hand, in-use, ordered, and above stock or below stock.

You can also filter parts by brand, part name, part number, retail price, and primary vendor and see exactly how many units of each part you have available at your shop—and how much each unit costs to buy.

Additionally, you can directly order parts and create parts markup matrices from Tekmetric.

This article was written with the guidance of automotive repair industry CPA
Hunt Demarest of
Paar, Melis, & Associates, P.C.

👉 Ready to grow your automotive business? [Book a personalized Tekmetric Demo Here]

FAQ

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One multi-shop operator switched to Tekmetric and doubled monthly revenue in two years. He shared how in a recent Tekmetric and PartsTech webinar.

Auto repair shops are under more pressure than ever. Tighter margins. A technician shortage that isn't going away. Customers who expect speed, transparency, and a frictionless experience every time they walk through your door.

Yet many shops are still running on disconnected systems, manual workarounds, and processes that haven't changed in a decade. The result? Bottlenecks that bleed time, stall revenue, and cap growth — often without the shop owner even realizing it.

This is the problem a recent ShopOwner webinar, sponsored by Tekmetric, tackled head-on. The conversation centered on one deceptively simple idea: the connected shop.

In this article, you'll learn what a connected shop workflow looks like in practice, how one multi-shop operator doubled monthly revenue after switching to Tekmetric, where the most common operational bottlenecks are hiding in your estimating process, and how features like SmartJobs, parts and labor matrices, and good/better/best estimates can raise your average repair order (ARO) — the average dollar amount collected per repair order — without adding headcount.

What a Connected Shop Actually Means

A connected shop isn't just about having software. It's about having the right systems talking to each other — and having your team actually use them.

John Phelps, director of channel partnerships at Tekmetric, put it plainly: "Just because you have an oven, that doesn't make you a chef. You can have the technology, but if you're not leveraging it properly, what good is it doing?"

That distinction matters. Technology for its own sake is another bill. Technology deployed with intention — one that connects estimates, parts ordering, inspections, payments, and customer communication into a single workflow — is a growth engine.

Tekmetric is built to be exactly that. With 70-plus integrations, built-in digital vehicle inspections (DVIs — digital inspection forms that capture photos, videos, and findings shared directly with customers), real-time reporting, and a native mobile app for technicians and service advisors, it's designed so every step of the repair order (RO) flows into the next without friction, duplication, or lost data.

One Shop Owner Doubled Monthly Revenue After Switching to Tekmetric

Tim Lanier knows what a revenue ceiling feels like. As president and CEO of Lanier Auto Group — which today operates four rooftops in the northern Atlanta suburbs — he spent years running a single shop that simply could not break through a certain monthly revenue level.

"We were stuck," Lanier said during the webinar. "We had our ways of doing things. A lot of copy-paste out of catalogs into the shop management system."

In March 2020, he made the switch to Tekmetric.

"As soon as we made that change, it opened the door to a lot of new possibilities — some of which we just didn't anticipate." He added: "We probably doubled our sales in about two years once we made the switch."

At the time of switching, Lanier's single rooftop was generating roughly $200,000 per month. Two years later, that number had climbed to approximately $400,000 — a structural shift in what the business was capable of, not just an incremental gain.

What unlocked it? A connected workflow that brought parts ordering, DVIs, payments, accounting, marketing, and inventory into one platform. The glass ceiling, as Phelps framed it, became a paper ceiling. And Lanier's team broke right through it.

The Estimating Bottleneck Is Costing Your Shop More Than You Think

When Phelps asked Lanier to name the single biggest operational bottleneck he's had to overcome, the answer was immediate: the estimating process.

"If you don't come up with systems to streamline things, that person becomes the bottleneck in the shop," Lanier said. "Some tickets can take 30 minutes to an hour to find all the parts and pieces you need for big jobs."

His solution? Get technicians directly involved — and give them the tools to act on that involvement.

"We've empowered the technicians by giving them a computer at their bay and a dual monitor setup so they can go straight into Tekmetric, pull up PartsTech, use diagrams and photos to quickly identify the exact part they need, and put the part on the ticket," he explained.

The result: estimates arrive at the service advisor roughly 90% complete. Advisors clean up grammar, add photos, and present. That's it. No back-and-forth. No shouting across the shop floor.

This is the connected shop in practice. Tekmetric's integration with PartsTech means technicians can search multiple suppliers in one lookup, confirm part specifications, and add items to ROs without leaving the platform. What once took an hour can be compressed into minutes — with fewer errors and fewer return trips.

Pricing Consistency Drives ARO Growth

One of the most overlooked drivers of ARO growth isn't sales technique — it's consistency.

Phelps highlighted this during the webinar: if a customer calls back a week later asking for a brake quote and gets a number $50 different from what they were told before, trust breaks down. Inconsistency in how estimates are built — varying labor rates, different parts markups, or service advisors quoting from memory — costs shops money and customers.

Tekmetric addresses this directly. Parts matrices and labor matrices create a consistent pricing foundation so every estimate reflects the shop's actual margins, regardless of which advisor builds the ticket or when. SmartJobs — Tekmetric's proprietary canned job system that automatically pre-populates parts, labor, and job notes for common services — takes this further by ensuring the right components populate every time, on every RO.

"If you're not using SmartJobs, powered by PartsTech, in Tekmetric, reach out to support, get your SmartJobs set up, and you'll be taking a massive step forward,” Jake Benson, director of strategic accounts at PartsTech, said during the webinar.

How to Present Good, Better, Best Estimates Without Starting From Scratch

Economic uncertainty means customers are making tighter decisions. Giving them options isn't just good customer service — it's good business.

In Tekmetric, shops can build a good/better/best estimate structure without starting from scratch three times. Build the base estimate, duplicate it, add parts or labor for each tier, and text all three options to the customer. A built-in checkbox at the job level keeps declined or unchecked options out of close ratio reporting, so advisors aren't penalized for presenting choices.

The same system works for tires, fluid services, brake packages, or any job where tiered pricing makes sense. Shops that present options consistently report higher approval rates and stronger customer relationships — because customers feel informed rather than pressured.

Tekmetric Is Built to Scale With Your Shop

Lanier's growth from one rooftop to four over the last four years didn't happen by accident. He credits systems and processes — and the ability to replicate them — as the core of that expansion.

"Once you figure out your systems and processes, things begin to click," he said. "It all becomes a lot easier."

Tekmetric is built to scale with that ambition. Whether you're running a single shop or managing multiple rooftops, the platform gives ownership real-time visibility into performance across every location — ARO, technician efficiency, close ratio, and more — without requiring an extra step to pull the data.

The connected shop isn't a future state. For shops like Lanier Auto Group, it's already the standard. The question is whether yours is built the same way.

Watch the full on-demand webinar from Tekmetric and PartsTech — How to Simplify Shop Operations and Increase Your Average Repair Order — and hear directly from shop owners and industry experts on the strategies and tools driving real results in 2026. 

Whereas traditional methods of payment require dipping a card in the same terminal as other customers or the hand to hand exchange of cash or check, the ability to pay by text message through SMS mobile payments takes the complexity and headaches out of the payment process for owners, service writers, and guests alike.

For auto repair shops in particular, giving guests the ability to pay by text not only streamlines the guest experience but also frees up service advisors from having to do a bunch of data entry, giving them more time to help other guests.

Here’s how text-to-pay works on our Integrated Payments, Tekmerchant. As you’ll see, we’ve built in opportunities to enhance efficiency while strengthening the relationship you have with your guests at each step of the process.

Step 1: Complete the Repair Order & Send the Invoice

By connecting Tekmerchant to Tekmetric, service advisors can quickly review the invoices of completed work and simply click a button to text the invoice to the guest.

Since the invoice is automatically generated from the repair order and is easy to edit within Tekmetric, the service advisor can reduce the time they would usually spend writing invoices.

Step 2: Collect Payment

Once the invoice is sent, the guest will receive a link that takes them directly to their invoice and pay screen. From there, they can review the work that was completed and make their payment, prompting them to input their billing information.

The customer inputs their card information, including their billing address, making it a verified payment.

At this point, all the service writer has to do is make sure that the payment has been approved and that everything checks out.

Pro Tip: Enhance Guest Service with a Call or Personal Text

Because service advisors and guests both have access to a digital invoice, it gives service advisors the opportunity to add a human touch to the payment process without the guest coming into the shop.

Consider having service advisors give guests a call or send a personal text message at this part of the process.

While this may seem like an extra step, it gives service advisors a chance to check-in with the guest to ensure all approved work was completed, which is a big step towards avoiding chargebacks.

Calling the guest is also a good chance to remind them of any maintenance that may need to be taken care of in the future and any upcoming deals or events. If the guest is too busy to take a call, Integrated Payments has a Text-to-Pay feature giving them the freedom to pay when they have time.

If everything looks good on the invoice, the guest can easily pay and move on with their day. You get paid fast and the guest is able to pay at their convenience.

Step 3: Return Vehicle to Customer

Once the payment has been processed, all that’s left to do is to return the vehicle.

Pro Tip: Add a Key Drop-Box for Convenience

Some auto repair shops use a key drop-box or locker to make vehicle returns more convenient for their guests and service advisors.

Most contactless drop boxes use programmable codes, so you can put the guest’s keys in a locker, send them the code, and let them pick up their car when they’re ready.

With a key drop-box, everyone wins: service advisors don’t have to worry about staying late; shop owners don’t have to worry about paying a service writer overtime, and your guests don’t have to feel rushed to make it back to the repair shop before closing time.

Turbo-charge Your Payments Processing

The Integrated Payment text-to-pay feature makes life easy for your guests and service advisors, and can potentially save you time, money, and headaches.

HOUSTON – October 31, 2023 – Tekmetric, industry leading automotive repair shop management system, has released Smart Jobs, the industry’s first smart job building feature that quickly builds jobs in just one click to help streamline the creation of repair orders. In just one click, shops can quickly build an estimate with parts and labor, check on-hand inventory levels and shop at preferred vendors right in Tekmetric. This revolutionary feature enables service advisors to focus on customer service while simultaneously reducing workload.

"When it comes to running an independent auto repair business, efficiency is paramount," said Sunil Patel, CEO of Tekmetric. "With Smart Jobs, shops have the opportunity to respond to customer needs quickly and accurately, saving time and hassle for everyone. This is a game-changer for our industry, and we are confident that it will revolutionize the way shops operate and deliver customer service."

With one click in Tekmetric, service advisors can now build a job based on the vehicle selected, and Tekmetric will automatically:

● Create a job title

● Add the relevant labor line and apply a labor matrix

● Add the necessary parts, filters and fluids and apply a parts matrix

● Check inventory for all parts, then fetch them from your favorite vendors if not in stock

● Apply a locked package price to the entire job

● Apply any necessary fees

In addition to building repair orders more efficiently, Smart Jobs also accelerates the parts ordering process. Not only can the feature automatically apply the correct quantity of parts, filters and fluids to the repair, but it also shops for out-of-stock items and prepares an order within Tekmetric. For quick jobs, like cabin air filters, Smart Jobs has been able to save approximately one minute per job, adding up quickly throughout the day. Smart Jobs can also help new employees to begin building jobs faster. This can lead to improved productivity and reduced errors, helping employees to produce high-quality work earlier in their training.

Smart Jobs will be available to Tekmetric customers in 2024. To request pricing or schedule a demo visit https://www.tekmetric.com/feature/smart-jobs.

About Tekmetric

Tekmetric, a Houston-based auto repair technology company, offers a cloud-based platform that enables auto repair shop owners to enhance productivity and increase profitability through its streamlined workflow management processes. Designed by a former shop owner, Tekmetric’s platform drives shop efficiency through real-time data, a customizable user interface and customer-centric communication tools. Since its launch in 2016, Tekmetric has disrupted the industry with its robust fully-integrated system, developed with an emphasis on customer transparency and user collaboration. For more information, visit www.tekmetric.com.