Sixty cents. That's how much of every new gross profit dollar the average independent tire dealership earned this year went straight to payroll - not the 42 cents to 45 cents cents most benchmarks call healthy and not even the 49 cents where the typical shop already sits. Sixty.

Here's how we got there. The figures below are per-store averages, year-to-date through August 2026, from representative data on independent tire and service shops throughout North America.

The biggest shift over four years is in what the average shop sells. According to my research, tires were 38% of sales in 2023. Through August this year, they're 30%. Mechanical labor is now 29% of sales and parts are 26%, so more than half of every sales dollar comes from service work. Since 2023, labor sales are up 33% and parts sales are up 23%.

That isn't a tire business in decline. It's a tire business that learned to look at the whole car. This includes vehicle inspections, advisors who explain what the technician found and customers who say yes. That said, don't overlook the value of the installed tire. Service dollars come primarily from the opportunity to service tires. The car comes in for tires and the inspection finds the rest.

Through August, the average store - again, based on my research - posted sales up 7.5% from last year while labor grew 14%, parts by10.8% and tire labor up 19.2%. Tires went the other way. Tire sales slipped 1.7% and units fell 1.3%. Against 2024, units are down 11%. Shop owner surveys show budget tires leading demand and customers putting off replacements. That’s what makes the unit decline costly. Price isn't the problem. Volume is.

Gross profit rose 11.9%, outpacing sales gains. Margin reached 61.2%, up from 54.6% in 2023. Gross profit per invoice hit $239, up from $193 in 2023.The richer mix is doing that work. . Every point of mix that moves from tires to service lifts gross profit, proudly. Notice what isn't driving it: car count. Invoices are up only 2% since 2023, according to my research. We're growing by doing more with nearly the same number of customers.

Now back to that 60 cents. Payroll is up 14.9% this year, faster than both sales and gross profit. The average store added about $103,000 in gross profit through August. About $62,000 of it went to payroll. That's 60 cents of every new gross profit dollar. Payroll already took up 49.3% of gross profit, up from 46.8% in 2024, against a benchmark of 42% to 45%.

When 60 cents of each new dollar goes to payroll, the ratio keeps climbing, even in a strong year. This isn't a one-year blip. Since 2022, payroll dollars have grown 39% while gross profit has grown 31%. Gross profit outpaced payroll from 2022 to 2023. Payroll has outgrown it every year since. This isn't a call to cut pay. The industry needed to pay people more. The question is how. Raises built into base pay with no link to production grow on their own schedule while gross profit grows on the customer's schedule.

With parts about a quarter of sales, supply is worth watching in 2027 and 2028. Tariffs on imported auto parts have expanded in steps since 2025 and this summer, the U.S. declined to renew the United States-Mexico-Canada Agreement in its current form. Shop owners we talk with are reporting backorders and wrong parts more than price hikes. Even Ford Motor Co. hasn't been immune. A parts shortage forced it to cancel 15 F-150 shifts at its Kansas City plant in September  and to idle its Dearborn truck plant for a week. Shops have protected parts margin so far and lining up a second supplier now is cheap insurance.

So what does it all mean?

1. Keep building the ticket. Gross profit per invoice is the growth engine;

2.  Tie that next raise to production. Every point of payroll to gross profit is worth about $9,600 so far this year. Find the production-to-pay balance;

3.     Win back tires. Each tire you win back is worth about $93 in gross profit, and;

4.     Grow car count. The next round of growth has to come from more visits, not just bigger ones.

Four years ago, the question was whether customers would trust us with more of their car. They have. The question now is how much of what that trust earns we get to keep.

Let's keep growing smarter, not just bigger.