- November 1, 2017 at 4:08 pm#74895Joseph Van syocParticipant
after decades of turning away work I could have really used at times, I have finally given in and posted a door rate for customer supplied parts. It is considerably higher than my door rate. and there are two stipulations. ONE is NO WARRANTY. I don’t care if you buy they exact part I would have, if I didn’t supply it, any warranty is between you and whoever you bought it from TWO- since I am a one man shop, I am not going to reassemble your vehicle, drag it out while you run around getting the CORRECT parts this time. only to push it back in and start over. Bay rental is $XX hr. Funny, after all that explaining why I don’t install customer parts, no one has asked since.November 1, 2017 at 4:42 pm#74896
Several of the posts talk about no warranty if the owner supplied parts. As much as you may preach this and have the customer read and sign this, if there is an issue and they sue, you will likely lose. If you have your hands in it, you have liability. Cut and dry. You are the professional. If you don’t want any liability, don’t touch it. If your insurance won’t cover you when you install outside parts, don’t touch it. If you do have coverage or are willing to take the risk and can be profitable, then you can do the job.November 1, 2017 at 4:56 pm#74897Rick WhiteParticipant
Carhospital is absolutely correct. There are two types of implied warranties that are in play in every state of this country. They are an Implied Warranty of Merchantability and Implied Warranty of Fitness. I go over both of these warranties in the webinar I offered to share with the group in an earlier post.
The reality of the situation is we need to have a better strategy dealing with the transparency the internet provides. To be successful in business, you need profit. In the past, we’ve split up profit over multiple income streams to hopefully get the amount needed to not only survive but thrive. Ultimately it doesn’t matter where the profit comes from as long as there’s enough. I believe it’s time to entertain a new way of selling parts and still achieving the needed gross profit. I would sell the parts at cost or slightly above as a handling charge and move the gross profit to the labor. I’ve been working on a model for this pricing strategy and have it just about nailed down.
I would still insist on allocating parts for quality and counterfeit issues. Once you show a customer you’re charging them cost or close to it on the parts, all this goes away. This isn’t something to be upset about. We’ve been enjoying the transparency as customers for quite some time. It’s just time for us to adjust.
Flame suit on.
I hope this helps.
RickNovember 1, 2017 at 5:05 pm#74898
I agree with Rick. That”s what I said in my first post. Shift the profit to labor. It’s all about the cost of the total job and it doesn’t look like we are price gouging on parts. I’m anxious to see a pricing strategy presented.November 1, 2017 at 6:21 pm#74899Tom HamParticipant
Many shops avoid the parts and labor pricing issue by employing job pricing in their software where parts and labor are listed separately, but they are not priced separately. Example:
There is no rational reason to break out the prices unless the law dictates it. And, if that is the case, the law in your area should be changed. Itemized bill? Of course. Parts numbers? No. Labor times? No. Individual prices? No. You got authorization for the repair at $432.59. You listed each item and did what you promised. End of story.
Tom - Shop Owner since 1978November 1, 2017 at 7:23 pm#74900Rick WhiteParticipant
UPDATE: We’ve had a number of people request access to the webinar I offered in an earlier post and I’m happy to report that we’ll be offering this webinar FREE on Friday, November 3, 2017 at 12 PM EDT.
You can sign up for the webinar by clicking here.
If you have any questions or comments regarding the content, I’m happy to speak with you privately if you’d like. You can email me at [email protected] and we can set up a time to talk.
I hope the webinar helps you deal with this very real issue.
RickNovember 1, 2017 at 9:33 pm#74901rinfantinoMember
The original storyline by rlucyk was how to compete with Amazon, not necessarily how to deal with the consumers bringing their own parts in for installation.
rlucyk stated that during the meeting a solution was proposed by one of the vendors in attendance suggesting the consumer purchase the parts from the supplier and the service provider does the install. Similar model to a TireRack or Tirebuyer (my analogy).
Many of you pointed out the potential liability and risks involved if the part fails – you’re on the hook.
At Openbay, we see very few cases where a customer will enter a Service Request for auto repair indicating they have their own parts. Not many Service Providers on the Openbay platform will respond to this type of request for the reasons stated above.
I think this thread should be focused on how to deliver a great online user experience as the customer solicits your business and to deliver high quality service.
As an aside, the DIY market where customers buy and install their own parts is shrinking. About 19-20% of the aftermarket is DIY, the remainder 80-81% is DIFM. This is good for everyone on this thread. And this is where the focus should be. All of you know newer vehicles are more complex to service and require unique skill sets. If consumers lack skills to diagnosis most issues with their vehicle, how are they going to determine what parts to buy? Many millennials and Gen-X much rather hire a professional to service their vehicle.
Again, focus on the shift in the consumer online buying behavior – most of the market is DIFM, not necessarily buying parts for a professional to install.
Extend and enhance your digital footprint to include ways to interact with consumers online. Respond to online consumer inquiries with speed and accuracy. This is how you win and grow your business.
#openbay #amazon #millennialNovember 2, 2017 at 7:36 am#74902
I don’t feel companies like Openbay, RepairPal or similar others is the answer either. In many cases, it’s the opposite. I see that both from the reviews and from experience with being a Repair Pal certified shop. Just as it was stated that consumers don’t know what parts to buy to fix their cars, they also don’t know what to ask for in an online quote and the shop does not know the condition of the car, certain options, etc. So quotes are wrong and when the price changes, some customers understand but some have left reviews feeling baited and switched. There is also a lack of loyalty, and a lack of a single shop having a history of service. This is pointed out in reviews of people saying they have used a service such as open bay or repair pal on more than one occasion at different shops each time. Customers have no idea how much it can help having full vehicle history in certain situations. The online thing just does not promote communication or relationships.November 2, 2017 at 10:28 am#74903Joe MazurParticipant
I think that while we all can agree that our business models will change because of the internet, I think we need to look at where Amazon has excelled, and that is in selling commodity goods. Amazon sells the same thing that a brick and mortar store sells, only they do it cheaper and ship it right to your house.
The thing we need to avoid is to make auto repair a commodity, because it is not. It is a skilled trade that often requires inspection and testing before an accurate price can be provided. However, what the internet has done is allow someone to google what their car is doing, assume that is what they need, and then check prices to find the lowest price on that repair. Openbay does encourage this kind of behavior, and i feel most people that come from sources like this will not be loyal, and also really dont care about maintaining their cars properly. In short, they are not the target customer that most of us look for.
Another thing that needs to be said about Amazon, Openbay, and Repairpal is that the amount of fees charged needs to be less. I am a Repairpal shop, and i think that their fees are most fair, in that i pay 10% of invoice for a new customer, but not for any returning ones. I personally think that cost should be around 5%, which is comparable to what a shop should spend on marketing to get a new customer. I think for sites like Amazon or Openbay to charge 10 or 20% every time they send a customer is excessive, and unless we adjust our pricing for high fees like that, then we are only covering costs and the owner is not getting paid.
In closing, IF any of these sites start to gain traction, and make a dent in our industry, THEN we will need to change our business model. But shop owners overall are some of the most resourceful people i know and the smart shop owners will figure out a way to still be profitable despite any interference.November 9, 2017 at 6:39 am#74910Randy LucykParticipant
I have been kicking this can down the road for too long and I am glad i finally sat down and chose a path for this subject
I have put a fair amount of effort into this over the last few weeks, mostly because it was time for me to get my head around how we would be handling these requests in the future. It may be important to note that we do not have a lot of folks asking us to install their own parts, which surprises me. That said, we do have folks tell us what parts cost at the autoparts, pretty much every week.
I believe sometime in the next year or two we will begin to start seeing a shift from the traditional automotive service model of parts margin and labor rate making up the majority of our charges, to a “Shop Rate” consisting of a minimal parts margin, shop charge and labor charge making up the majority of our income stream. I may well do it sooner than most, once i find a work around in Rowriter.
We have a charge to put a car in a bay with the resources and equipment to efficiently perform a service plus a skilled technician to do the work. We have always charged a Shop Rate without calling it that. Currently, it is the combination of the labor charge, parts margin and shop supplies and it changes for every job we do. It is not hard to calculate. The Savings Example attachment explains it in better detail.
So moving forward, we will be handing out the Savings Example attachment to consumers interested in having us supply their parts. If they continue to be interested, we will hand them the second attachment. I suspect after the they consider the Consumer to Installer Agreement, we will have few takers.
I am not completely convinced this is the right path, but at least we have chosen one. We can continue to say no to customers when they ask if we will install their parts and they will continue to believe there is something fishy going on. Or, we can begin to educate them on the reality of modern auto repair and let them make their choice.
I don’t believe we will be converting a lot of these folks to customers. I believe they will just find a different facility that has not put as much thought into whats fair. That’s Ok. Maybe, just maybe they are leaving our place a little better educated on what they are asking of us, when they ask us to install their parts.
We won’t be saying no and we will be educating. We will have a requirement for parts quality, dependent on the system being serviced.
These attachments are new and/or completely rewritten from anything seen previously. If this subject does not interest you, best to stop reading now. I would appreciate it, if you are going to take the time to read the attachments, take the time to consider them in their entirety, or not at all. This is not the kind of information that a cursory review will do justice to.
It is important to note the the Consumer Protection Act in Michigan DOES allow a provider to disclaim implied warranties. It must be BOLD and OBVIOUS. I believe the attached documents meet that requirement. Check the laws for your state.November 15, 2017 at 7:33 am#74921John ShanderukMember
Cheap parts are like buying cheap shoes, here’s an example.
I used to buy work boots that cost me $49 they would last 6 months. Then I bought a pair of boots for $100, waaay more comfortable and lasted me two years!
So buying the cheap shoes cost me twice as much in the long run ($200) and the weren’t as satisfying to wear.November 8, 2018 at 1:15 am#75280Michael GibbonsMember
Great read. I’m new to this site and this the first topic I linked on to. It’s quite obvious that there are smart owners here that really take time to solve real life issues facing us owners today. I appreciate you.Here’s my thought. We can not let Amazon, customers, or any parts distributors dictate if we are going to be profitable..bottom line. If customers want to supply parts, then clear policies need to be put in place that spell out the risks and hopefully deter consumers from doing so. If they still want to proceed, that can not mean we then lose our overall profit margin to keep them happy. Losing profitability will cost you your business.
Our profit centers are parts, labor, and shop supplies….no matter how you cut it up. There has to be a healthy balance. Lose one, and the others have to make it up….somehow, some way. If your parts margins heavily decrease, then your labor margins need to heavily increase. The one advantage that we have today is our skill sets. If Amazon could figure out a way to undercut or disrupt that too, we all may be working someday in a new Amazon Auto Service Center , 7 days a week to make their margin. The only way to combat this new and real challenge is to collectively make it unattractive to consumers with substantially higher labor rates and fully displaced liability (if possible), or find a new profit center. Good luck on the latter. I don’t think new car dealers are going to budge. It’s up to us to hold the line or risk changing how we do business in the future, which will ultimately lead to fully disclosed shop rates of $200+/hour labor rates. In addition, we will be dealing with partially disassembled cars on our lifts or in our parking lots waiting on replacement parts ( at a storage fee of course) , owners scrambling to find those replacement parts and alternative transportation, and more billable diagnostic time when cars still aren’t fixed. We won’t be writing checks to our local parts dealers, as Amazon will have put them out of business. I know I am rambling, but my point is this. As long as we hold margins, it doesn’t matter. We have a skill set that you can’t buy online and very expensive tools,software, shops, etc.. Most people are not going to invest the time and money that we have into obtaining that side of our business, and corporate America has struggled trying to disrupt or control it. We may just have to expose the real costs and listen to the new complaints. Welcome to Millenia!November 9, 2018 at 1:46 pm#75289Richard BlackMember
I remember a few years back a sign posted at pep Boys showed the labor rates for repairs and the $20 per hour added rates for customer supplied parts. Even if they just bought them at the front counter applied.November 9, 2018 at 2:04 pm#75290Richard BlackMember
In construction, Customers who are remodeling a kitchen buy the appliances and the cabinets and plumbing, sink ect. A contractor has them understand in writing, when he comes to install everything, if a cabinet is damaged or even if it is damaged during installation, it is the customers problem. The labor will be charged again, any delays in the scheduled work will be charged for at billable hours. Any rescheduling will be placed on the waiting list. So if the sink came scratched, or the contractor accidently scratches it, the job stops, the installer is still paid and the customer has the problem to obtain a replacement. It’s when the contractor handles the entire remodel, all the problems are part of his job, not the customer. As said earlier, when a car repair is held up from the wrong part the customer supplied, it’s time to charge for rental time in the bay. I wouldn’t mind going to the next car repair while the clock is still running on the stuck one,
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