Every phone repair shop in Australia faces the same standing question: which repair parts should you stock on the shelf, and which should you order per job? Get it wrong in one direction and you've got thousands of dollars sleeping in a drawer of screens for phones nobody brings in anymore. Get it wrong in the other and you're telling a walk-in customer 'it'll be here Thursday' — and watching a decent chunk of them walk straight to the shop that had the part today. This article gives you an actual decision rule, the arithmetic behind it, and a routine for keeping the shelf honest. All numbers below are deliberately round and hypothetical — plug in your own.
The real cost of stocking repair parts vs ordering per job
Most owners run this decision on gut feel, and gut feel is systematically biased toward under-stocking the parts that move and over-stocking the parts that don't. Dead stock hurts once and you remember it forever. A lost walk-in hurts every week and leaves no receipt. So before the rule, look at what each path actually costs.
What holding a part costs you
Say a screen assembly lands at $60 AUD after freight. Holding it costs you three things. First, the capital is tied up — money on the shelf isn't paying suppliers or rent. Second, there's a small ongoing cost: storage, the odd damaged or misplaced unit, time spent counting. A common shorthand is to cost these at roughly 20–30% of the part's value per year; call it 25%, or $15 a year for our $60 part — about $1.25 a month. Third, and this is the one that actually stings, there's obsolescence: if the model dies or a better-priced part supersedes it, you might write off the whole $60.
What ordering per job costs you
Ordering per job looks free because nothing sits on a shelf. It isn't. There's the freight premium — express shipping one part from an overseas or interstate supplier typically costs more per unit than parts riding along in a consolidated stock order. Say that difference is $10 a part. Then there's the lead time. From most offshore suppliers into Australia you're looking at anywhere from three business days on express up to a fortnight on economy, and that's before a customs hold. Locally warehoused suppliers are faster but you pay for it in the part price.
The lead time is where the real money leaks. Some portion of customers who hear 'we can have it Thursday' don't come back Thursday. Suppose — purely as a working assumption for the arithmetic — that one in three of those enquiries doesn't convert, and your average gross margin on the repair is $110. That's an expected cost of about $37 in lost margin every time someone asks for a repair you can't do today. Add the $10 freight premium and not stocking a part costs you roughly $47 per enquiry, against a holding cost measured in single-digit dollars per month. Run your own conversion assumption — even at one in five walking, the answer barely changes.
That's the position worth taking: for any part with regular demand, the maths says stock it, and most shops under-stock their movers while hoarding slow junk. The reason shops don't stock more isn't the arithmetic — it's cash flow and the fear of dead stock. So the rule needs to manage those two things, not ignore them.
The decision rule
You don't need a spreadsheet model per SKU. You need a bright-line rule you can apply in five minutes a fortnight. Here's one that works:
- Stock it if you've fitted (or been asked for) that part twice or more in the last 60 days AND the device model is roughly four years old or newer. Regular demand plus a model still in circulation means obsolescence risk is low and the lost-walk-in cost dominates.
- Order per job if it's come up once or less in 60 days, or the model is old enough that demand is clearly tailing off. Quote the customer a realistic turnaround, take a deposit, and order on confirmation.
- Watch-list anything in between — a first enquiry on a newer model, or a model you suspect is about to spike (a popular handset coming off contract, a new release pushing last year's flagship into the second-hand market). One enquiry costs you nothing to note; the second enquiry inside 60 days promotes it to stocked.
The two-in-60-days threshold isn't magic — it's just where the arithmetic above comfortably clears the holding cost even with conservative assumptions, while filtering out one-off oddballs. If your shop is high-volume, tighten it to two in 30 days so the shelf doesn't sprawl.
How deep to stock: setting min and max levels
Deciding to stock a part is half the decision. The other half is how many. Two numbers per SKU:
- Minimum (reorder point): expected demand over your supplier's lead time, plus one. If you fit four of a screen a month and restock takes a week, that's roughly one unit of lead-time demand — so reorder when you hit two.
- Maximum: about one restock cycle's worth of demand. If you place stock orders fortnightly and fit four a month, carry two to three, not ten. Buying deep to 'save on freight' is how drawers of dead stock get born.
One genuinely Australian wrinkle on the maximum: many offshore suppliers give 30–90 day warranty on parts, and some start the clock at shipment, not at fitting. A part that sits on your shelf for five months can exhaust its supplier warranty before it ever touches a phone — while you're still on the hook to your customer under Australian Consumer Law if it fails. Your maximum stock level should never exceed what you'll plausibly fit inside the supplier's warranty window. Check each supplier's terms; they vary a lot.
Exchange rate movement cuts both ways. Buying a fortnight of stock ahead partly insulates you from a falling Australian dollar, which is a mild point in favour of stocking. But don't turn parts buying into currency speculation — if you catch yourself ordering three months of screens because 'the dollar's about to drop', stop. You're a repair shop, not a forex desk.
Keeping the shelf honest: the quarterly cull
The rule above adds parts to the shelf. You also need a routine that removes them, or in three years you'll have a museum. Every quarter, pull a report of stock with no movement in 120 days and work through it in order:
- Return it if the supplier accepts returns or credits — some do on unopened stock, and it's worth asking even when the published policy says no.
- Bundle it into repairs — a slow-moving battery thrown in with a screen job at a sharp combined price beats a battery in a drawer.
- Sell it on to another shop or a parts marketplace, even below cost. Sixty per cent of your money back today beats a write-off next year.
- Write it off and record it. A visible write-off number each quarter is the best cure for over-ordering — it makes the cost of buying deep impossible to ignore.
This is where doing it on paper falls over. The whole method depends on knowing what you fitted, what customers asked for and didn't book, and what hasn't moved — and nobody remembers that across hundreds of SKUs. If your tickets and stock live in the same system, the 60-day demand count and the 120-day dead-stock list are a report, not an afternoon of guesswork. RepairTree's inventory management tracks movement against jobs, and the reporting tools will show you turn rates per SKU so the fortnightly review takes minutes. Logging the make and model on every enquiry — including the ones that walk — is easier when your device database is a couple of taps at the counter, and those logged near-misses are exactly the demand signal the watch-list runs on.
A worked pass through the rule
Using made-up round numbers, say your last 60 days of tickets and enquiries show: Model A screen fitted six times, Model B screen fitted twice, Model C battery asked about once (customer walked), Model D screen — a seven-year-old handset — fitted twice.
- Model A: stock it, obviously. Fitting three a month with a one-week supplier lead time puts your reorder point at two and your max at three or four.
- Model B: two in 60 days clears the threshold. Stock one, reorder at zero. Cheap insurance against a $47-per-enquiry leak.
- Model C: one enquiry — watch-list. Note it. If a second enquiry lands inside 60 days, it graduates.
- Model D: demand exists but the model is ancient and tailing off. Order per job, take a deposit, quote a week. If you're wrong and it keeps coming up, the rule will promote it — but the downside of being wrong here is a $60 write-off, and the rule is built to avoid exactly that.
Total new cash on the shelf from that pass: maybe $250–$350. Compare that with one lost walk-in a month at $110 gross margin and the trade is not close.
GST and the paperwork side
Two brief practical notes for Australian shops. Imported parts consignments over $1,000 attract GST at the border, and many offshore suppliers now charge GST on lower-value orders at checkout — either way, keep the documentation so you can claim the credits on your BAS. And if you're capitalising a growing parts inventory, how you value stock on hand at year end affects your tax position. Both of these are worth a ten-minute conversation with your accountant; this article is general guidance, not tax advice.
The method itself, though, you can start this afternoon: pull 60 days of job history, count fits per part, apply the two-in-60 rule, set a min and max for everything that clears it, and put a quarterly cull in the calendar. The shelf stops being a guess and starts being a decision.