.service-absorption-calculator-container {
font-family: 'Segoe UI', Roboto, Helvetica, Arial, sans-serif;
max-width: 800px;
margin: 0 auto;
color: #333;
line-height: 1.6;
}
.calc-wrapper {
background-color: #f8f9fa;
border: 1px solid #e0e0e0;
border-radius: 8px;
padding: 30px;
box-shadow: 0 4px 6px rgba(0,0,0,0.05);
margin-bottom: 40px;
}
.calc-header {
text-align: center;
margin-bottom: 25px;
color: #2c3e50;
}
.form-group {
margin-bottom: 20px;
}
.form-group label {
display: block;
margin-bottom: 8px;
font-weight: 600;
color: #444;
}
.input-wrapper {
position: relative;
}
.input-prefix {
position: absolute;
left: 12px;
top: 50%;
transform: translateY(-50%);
color: #666;
font-weight: bold;
}
.form-group input {
width: 100%;
padding: 12px 12px 12px 30px;
border: 1px solid #ddd;
border-radius: 4px;
font-size: 16px;
box-sizing: border-box; /* Important for padding */
}
.form-group input:focus {
border-color: #3498db;
outline: none;
box-shadow: 0 0 5px rgba(52, 152, 219, 0.3);
}
.calc-btn {
width: 100%;
padding: 14px;
background-color: #2980b9;
color: white;
border: none;
border-radius: 4px;
font-size: 18px;
font-weight: bold;
cursor: pointer;
transition: background 0.3s;
}
.calc-btn:hover {
background-color: #1c6ea4;
}
.result-box {
margin-top: 25px;
padding: 20px;
background-color: #fff;
border-left: 5px solid #2980b9;
border-radius: 4px;
display: none;
}
.result-row {
display: flex;
justify-content: space-between;
align-items: center;
padding: 10px 0;
border-bottom: 1px solid #eee;
}
.result-row:last-child {
border-bottom: none;
}
.result-label {
font-weight: 600;
color: #555;
}
.result-value {
font-size: 20px;
font-weight: 700;
color: #2c3e50;
}
.big-result {
font-size: 32px;
color: #2980b9;
}
.status-bar {
height: 10px;
background: #eee;
border-radius: 5px;
margin-top: 15px;
overflow: hidden;
}
.status-fill {
height: 100%;
background: #27ae60;
width: 0%;
transition: width 1s ease-in-out;
}
.content-section h2 {
color: #2c3e50;
margin-top: 30px;
}
.content-section h3 {
color: #34495e;
margin-top: 20px;
}
.benchmark-table {
width: 100%;
border-collapse: collapse;
margin: 20px 0;
}
.benchmark-table th, .benchmark-table td {
border: 1px solid #ddd;
padding: 12px;
text-align: left;
}
.benchmark-table th {
background-color: #f2f2f2;
}
@media (max-width: 600px) {
.calc-wrapper {
padding: 15px;
}
}
function calculateAbsorption() {
// Get input values
var sGross = document.getElementById('serviceGross').value;
var pGross = document.getElementById('partsGross').value;
var fExpenses = document.getElementById('fixedExpenses').value;
// Clean inputs
var service = sGross === "" ? 0 : parseFloat(sGross);
var parts = pGross === "" ? 0 : parseFloat(pGross);
var expenses = fExpenses === "" ? 0 : parseFloat(fExpenses);
// Validation
if (expenses 0) {
document.getElementById('deficitResult').innerHTML = formatter.format(deficit);
document.getElementById('deficitResult').style.color = "#c0392b";
} else {
document.getElementById('deficitResult').innerHTML = "+" + formatter.format(Math.abs(deficit)) + " (Surplus)";
document.getElementById('deficitResult').style.color = "#27ae60";
}
document.getElementById('absorptionRateResult').innerHTML = absorptionRate.toFixed(2) + "%";
// Visual Progress Bar
var barWidth = absorptionRate > 100 ? 100 : absorptionRate;
document.getElementById('progressBar').style.width = barWidth + "%";
// Color coding based on health
var barColor = "#e74c3c"; // Red
var analysis = "";
if (absorptionRate < 60) {
barColor = "#c0392b"; // Deep Red
analysis = "Critical Level: Your fixed operations are not covering enough overhead. Heavy reliance on variable vehicle sales to keep the lights on.";
} else if (absorptionRate < 80) {
barColor = "#f39c12"; // Orange
analysis = "Below Average: Work on increasing Service RO count and Parts margins to improve stability.";
} else if (absorptionRate < 100) {
barColor = "#2980b9"; // Blue
analysis = "Healthy: You are approaching full absorption. Variable sales profit is mostly retained.";
} else {
barColor = "#27ae60"; // Green
analysis = "Excellent: Your Service and Parts departments cover all dealership overhead. Every car sold is pure net profit.";
}
document.getElementById('progressBar').style.background = barColor;
document.getElementById('analysisText').innerHTML = analysis;
// Show Results
document.getElementById('resultBox').style.display = "block";
}
{
"@context": "https://schema.org",
"@type": "FAQPage",
"mainEntity": [{
"@type": "Question",
"name": "What is Service Absorption Rate?",
"acceptedAnswer": {
"@type": "Answer",
"text": "Service Absorption Rate is a dealership KPI that calculates the percentage of fixed overhead expenses covered by the gross profit from Service and Parts departments."
}
}, {
"@type": "Question",
"name": "How is Service Absorption calculated?",
"acceptedAnswer": {
"@type": "Answer",
"text": "It is calculated by dividing the total Gross Profit of Service and Parts by the Total Fixed Expenses of the dealership, then multiplying by 100 to get a percentage."
}
}, {
"@type": "Question",
"name": "What is a good Service Absorption Rate?",
"acceptedAnswer": {
"@type": "Answer",
"text": "A rate of 100% is considered the ideal target, meaning fixed ops cover all overhead. However, the industry average often hovers between 55% and 75% depending on the franchise."
}
}]
}
Service Absorption Calculator
$
$
$
Total Fixed Ops Gross Profit:
$0.00
Fixed Expenses:
$0.00
Uncovered Expenses (Deficit):
$0.00
Service Absorption Rate:
0%
Understanding Service Absorption Rate
The Service Absorption Rate is one of the most critical Key Performance Indicators (KPIs) for automotive dealerships. It measures the percentage of a dealership's total fixed operating expenses that are covered (absorbed) by the gross profit generated solely by the fixed operations departments (Service, Parts, and Body Shop).
Unlike variable operations (Vehicle Sales), which fluctuate with market conditions and inventory availability, fixed operations are generally more stable. A high absorption rate indicates a resilient business model that can remain profitable even when car sales slow down.
The Formula
The calculation is relatively straightforward but requires accurate accounting data:
Absorption Rate = (Service Gross Profit + Parts Gross Profit) / Total Dealership Fixed Expenses
Key Components
- Fixed Operations Gross Profit: The sum of gross profit from labor sales, parts sales, and body shop operations. Do not include vehicle sales profit here.
- Fixed Expenses: These are the operating costs that exist regardless of sales volume. Examples include rent/mortgage, utilities, insurance, administrative salaries, and IT systems. Variable expenses like sales commissions or floor plan interest are often excluded depending on the specific accounting model (NADA vs. 20 group standards).
What is a Good Absorption Rate?
While 100% is the "Holy Grail" of dealership management, averages vary by brand and region.
| Absorption Rate | Business Health Status |
|---|---|
| 100% or higher | Excellent. The dealership's overhead is fully paid for by Service & Parts. All vehicle sales gross profit goes directly to the bottom line. |
| 80% – 99% | Strong. The dealership is stable and profitable, with low reliance on vehicle sales volume to break even. |
| 60% – 79% | Average. Typical for many volume dealers. Vulnerable if the market dips. |
| Below 60% | At Risk. The dealership relies heavily on selling cars to pay the electric bill. High pressure on the sales floor. |
Strategies to Improve Absorption
To increase your absorption rate, you must either increase fixed ops gross profit or decrease fixed expenses. Most Dealers focus on the numerator (profit) rather than the denominator (expenses). Strategies include:
- Increasing the effective labor rate in the service drive.
- Improving technician efficiency and proficiency.
- Reducing parts obsolescence.
- Focusing on customer retention (Service retention leads to higher absorption).