-
Fleet Management Company Processing Fees. How Does Everyone Recover These Fees?
So we deal with several fleet accounts. One national fleet uses a fleet management company that is relatively easy to deal with, but charges a 4% processing fee as long as the estimate is submitted online. We have 4 or 5 smaller fleets that use a fleet management company (one that most companies are trying to get away from) that is slightly more difficult to deal with and charges an 8% processing fee (they include sales tax in the total before taking their 8%) when submitted online or 12% if it is called in to their 1-800 number. Credit card fees typically run 1.5% – 2% so we are not worried to much over the first fleet management company (cost of doing business and they send a lot of work our way) and they do not take the processing fee out of the state sales tax. The second fleet management company will not budge and although they send a fair amount of work our way, I feel like we are being raped with an 8% processing fee (both companies use direct deposit into our bank account and are NOT using 1 time use credit cards). We tried to raise hazmat/shop supplies fee to cover some of this fee; however both companies cap that fee at $5.00. Fleet management company number 2 will only allow a 20% over cost markup on parts also.
My question is: How does your shop or what would your shop do to recover or offset the processing fees charged by these fleet management companies, especially the one that charges 8%?
-
1 Reply
-
We tell our fleets that we will give them priority service putting them ahead of others to get their vehicles back as soon as possible. Having their vehicles is how they make money why should you lose money when repairing them.
Our largest fleet is the post office they do charge us 4% of the invoice and we up their labor rate enough to cover the costs. We mark up all parts the exact same way as our other customers which is double our cost.
When doing fleets we get an automatic approval from the company for $300 on every vehicle they bring in so we can expedite the work needed.
Just like when we deal with warranty companies if they do not pay our regular labor or markup on parts we bill it to the customer when they pickup their vehicle. They know this up front and we let them know how much extra time we spend to get them as much as possible from the warranty company
You cannot stay in business by volume and that is how the fleet management companies try and force you to comply with their demands. Start by telling them NO when the won’t pay your higher fleet labor rate. Get a decent mark up on parts and do not let them demand you use a certain part for the repair.
If they will not let you make a profit on what you do let some other company take them on and deal with the headaches and loss of profit and work on gaining new customers that will pay what you are worth.
Talk to the companies involved and let them push the management companies into working with you. Give them excellent service and explain to them they can make more money when you can work faster by expediting their vehicles and not put up with the management companies demands.
We have found that the fleets that allow us to make a profit , expedite their work and we have pre authorization for appreciate us the most.
Log in to reply.