• January 7, 2018 at 5:04 pm#65357

    Increasingly often invoices from many better repair shops no longer list parts and labor separately (except to the extent that it is required by law in some areas for taxes or other reasons).

    Invoices like this eliminate time wasted picking apart details of a repair such as individual parts prices.

    In many other shops the only reason their invoices are not like this is lack of software capability (or they are not aware that they can do so with their software).

    Could it be time to change the default way of doing things from parts and labor to simply a price for an oil change or a brake repair or a timing belt service?

    More and more software companies include this ability. Most others would make the change if the demand from their customers was there.

    Your thoughts?

    For more on pricing issues, click here

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    January 9, 2018 at 10:05 am#74948
    jbrenn77
    Member

    Yes.  It is time we stop treating our service as a commodity.  Pricing out labor and parts separately causes unnecessary objections during the presentation regarding parts prices.  This is because the customer can get parts for our cost, which didn’t used to be the case.  It used to be that we could mark up our parts, make a profit on them, show the sell price of these parts to the customer, and they would still be less than what the customer would pay at a parts store.  That was a long time ago.

    The amount of gross profit needed from each job can be more easily earned on labor than parts.  I am eagerly awaiting the time when we stop marking up our parts and figure out how to make the profit needed on labor.  After all, we don’t make parts.  We do sell our labor though, and that is unique to our particular shop.  You can’t buy it online (usually, yet) and it’s not the same as the labor down the street.

    I’m not sure how to implement this change but I’d be willing to do it if I could get together with a group of owners who wanted to collaborate on this.

    January 9, 2018 at 10:37 am#74949

    A potential problem I see by doing this is future warranty claims on product that is not shown on the invoice. All suppliers require proof of installation which would not appear on this type of invoice format. Do you not think you may be opening a can of worms by not showing labour as well?

    January 9, 2018 at 10:49 am#74950
    jbrenn77
    Member

    We’re not talking about not listing the parts, just not separating out the parts and labor prices individually.

    January 9, 2018 at 3:12 pm#74951
    rayrippey
    Participant

    As a software company, I can tell you I’ve had NO requests to eliminate parts or labor from the invoice detail. We have dozens of invoice printouts to choose from because everyone has their own idea of what they want printed out. Many do not like to print out the part# because they do not want their customers comparing the part prices. Some don’t even want the labor hours or rate to be printed, just the total of the labor.

    I think if a generic type of invoice was ok, more would just use QB’s instead of going to a special program for repair.

    For me personally, I like having a detail of what parts are replaced in my car.

    January 9, 2018 at 4:34 pm#74952

    The type of customer who tries to play the price shopping game is not the type of customer most premiere shops want. They are only loyal to price because they do not understand the business. With that being said this is an opportunity to sell yourself and the benefits of purchasing from you. You are the professional here. Come across as one and you may end up with a loyal customer. Transparency on the invoice is very important. People will perceive you are hiding something and not trust you. Trust is paramount.

    January 9, 2018 at 7:13 pm#74953

    Moot point for me, because Iowa law requires an itemized invoice, to include parts, parts cost, and labor.  I do not see this changing any time soon, and trying to do so may cause more problems than it is worth, such as cries of what are you trying to hide?

    January 10, 2018 at 9:11 am#74955
    jbrenn77
    Member

    Well, if there’s a law preventing you prom not itemizing parts and labor separately then you’d better abide by that.  I’m not sure what Il law says, I’ll have to look into that.  I can tell you I’ve been doing it this way for over 15 yrs and I can count on one hand the amount of times I’ve gotten asked how much the parts were.  Before that I had much more criticism regarding parts prices due to the fact that I had to mark them up more than the customer could buy them down the street.  When asked, I will always gladly give a breakdown, but I don’t see the need to create unnecessary objections by adding complexity to the invoice.  When you go to a restaurant do they give you a breakdown of how much they are charging you for the steak, and how much the labor was to cook it, and how much you are paying for the gas to fire the oven, etc etc…  ?  Nope, ’cause nobody cares.  The same holds true for our business as well.  We create these problems ourselves.

    January 11, 2018 at 5:55 am#74956

    Michigan law is a little fuzzy and there is a distinction in the language between estimates(which are required to be presented and signed). The law definitely calls for itemized parts and prices on estimates. Requirements on final invoices has much more grey in it, although i suspect an inspector will take exception to no parts prices on final invoices. Kind of moot point if you are following the letter of the law, since all customers should have a signed estimate copy anyway. (with parts prices).

    I have been toying with the idea of going to a “Shop Rate” in place of a parts margin  and putting it in a renamed “shop supply” field. Same dollar amount as parts margin, just moved to a different heading. This approach will likely be frowned upon as well.

    Maybe we are asking the wrong question. Is it past time for the industry to decides how to be fair to our best customers by standing up and educating our occasional customers. I recorded the following video with examples for my staff. It demonstrates how we will be moving forward with our charges to customers. This is not just about educating our retail customers but also industry customers, as well.

    Nothing changes for my best customers, only my occasional customers.

    Onedrive link below:

    https://1drv.ms/v/s!Ap7ibKYluQae7U92DsXcH49Ch9v7

     

     

     

    January 24, 2018 at 2:31 pm#74963
    RS
    Member

    If you are worried about customers checking you prices after they leave…finding it cheaper on fleabay, does give them a sour taste in their mouth.  You can explain to them that YOU warranty your part AND labor to replace the part if/when it fails within the warranty time period. How much is THEIR time worth, waiting for warrantied parts to get shipped to them…In the meantime, they have to, Uber, Lyft, rent a car, etc… (How much is their time worth) is usually my best selling closer.

    You can also inhibit their ability to look up your parts numbers by reversing a few numbers, OR entering the part number backwards…example, 06J-115-403 (oil filter), enter it as 06J-115-304, OR 06J-511-304, they will NEVER find it.  Or you can put half of the part number… 06J-115, which would only send them in the general direction

    January 24, 2018 at 5:46 pm#74964
    jbrenn77
    Member

    If you are worried about customers checking you prices after they leave…finding it cheaper on fleabay, does give them a sour taste in their mouth. You can explain to them that YOU warranty your part AND labor to replace the part if/when it fails within the warranty time period. How much is THEIR time worth, waiting for warrantied parts to get shipped to them…In the meantime, they have to, Uber, Lyft, rent a car, etc… (How much is their time worth) is usually my best selling closer. You can also inhibit their ability to look up your parts numbers by reversing a few numbers, OR entering the part number backwards…example, 06J-115-403 (oil filter), enter it as 06J-115-304, OR 06J-511-304, they will NEVER find it. Or you can put half of the part number… 06J-115, which would only send them in the general direction

    Yes, We could and have had to do that…  or we could just avoid all that and stop creating objections ourselves and quite breaking it out separately.   I choose the latter.  It takes a LOT less time and customers leave with a smile on their face, amazed at how simple and easy it was.

    February 14, 2018 at 10:08 am#74994
    SSF
    Member

    When you go to a restaurant do they give you a breakdown of how much they are charging you for the steak, and how much the labor was to cook it, and how much you are paying for the gas to fire the oven, etc etc… ? Nope, ’cause nobody cares. The same holds true for our business as well. We create these problems ourselves.

    Totally agree on this one. Never thought about this issue from the restaurant perspective. The difference about the restaurant and repair shop is the trust level. In most cases customers are not thinking that restaurants will put some crappy ingredients into their food or will skip couple of eggs in “omelet du fromage”. On the other hand it’s easy to feel when something is wrong with the food your ordered. As for the repair shops we have this “magical” reputation of doing things wrong because everyone in their lives had this story about bad repair or stolen parts or something similar. So these invoice breakdowns are compensating this lack of trust. Anyway I won’t use breakdowns for at least a month and see what will be the reactions of my customers.

    February 14, 2018 at 12:44 pm#74995
    jbrenn77
    Member

    When you go to a restaurant do they give you a breakdown of how much they are charging you for the steak, and how much the labor was to cook it, and how much you are paying for the gas to fire the oven, etc etc… ? Nope, ’cause nobody cares. The same holds true for our business as well. We create these problems ourselves.

    Totally agree on this one. Never thought about this issue from the restaurant perspective. The difference about the restaurant and repair shop is the trust level. In most cases customers are not thinking that restaurants will put some crappy ingredients into their food or will skip couple of eggs in “omelet du fromage”. On the other hand it’s easy to feel when something is wrong with the food your ordered. As for the repair shops we have this “magical” reputation of doing things wrong because everyone in their lives had this story about bad repair or stolen parts or something similar. So these invoice breakdowns are compensating this lack of trust. Anyway I won’t use breakdowns for at least a month and see what will be the reactions of my customers.

    I agree with trying it out.  Can’t hurt I don’t think.  These invoice breakdowns may compensate for a lack of trust, but here’s the question:  Who said they don’t trust us?  That’s our perception, which may become true the more we dwell on it, compensate for it, etc.  I go in to every transaction with my customer with the assumption that they trust me or they wouldn’t bring their car here.  I believe we also all know that if somebody wanted to they could still cheat the customer even while giving this breakdown, and I think customers know that too, so I question even the validity of whether providing that really serves any purose at all in the trust department.

    February 14, 2018 at 2:02 pm#74996
    rayrippey
    Participant

    One question I have… if you were to NOT give the customer a breakdown of parts and labor, wouldn’t you want to do it for yourself? That way you have much more information if the vehicle comes back.

    February 14, 2018 at 2:36 pm#74997
    jbrenn77
    Member

    One question I have… if you were to NOT give the customer a breakdown of parts and labor, wouldn’t you want to do it for yourself? That way you have much more information if the vehicle comes back.

    Yes, we would want all of that tracking information of course, we simply have different formats we can choose from for how it prints.

    February 14, 2018 at 2:43 pm#74998
    rayrippey
    Participant

    I guess we’ll have to add another invoice printout if this catches on. I think we probably have about 50 invoice printouts now. So far, no shops have requested this kind of an invoice… we’ll see.

    February 14, 2018 at 3:12 pm#74999
    jbrenn77
    Member

    I guess we’ll have to add another invoice printout if this catches on. I think we probably have about 50 invoice printouts now. So far, no shops have requested this kind of an invoice… we’ll see.

    I chose the management system we currently have now based on the fact that it could do this.  I called and researched a lot of companies and many said the same thing, no one had asked for it.  I ended up buying the one that said they would do if for me.  To date between support and the purchase I’ve spent about $19,800 with them, so I’d say it was probably worth their time.  Food for thought.

    February 14, 2018 at 3:19 pm#75000
    RS
    Member

    WOW “jbrenn77”  what management system that cost so damn much? Hell, I’m still using quickbooks 2011 Pro… its simple additions and subtractions, add “items” etc…

    February 14, 2018 at 3:20 pm#75001
    rayrippey
    Participant

    Yes, we do custom invoices all the time. We have a report writer for our invoices so either us or the customer can modify the invoice. Usually they will go through our invoices and find the closest one they like, then have us modify it or the customer can modify. I know without this feature we would not sell as many programs as we do.

    Perhaps we should put that in bigger print on our website 🙂

    February 14, 2018 at 3:32 pm#75002
    jbrenn77
    Member

    WOW “jbrenn77” what management system that cost so damn much? Hell, I’m still using quickbooks 2011 Pro… its simple additions and subtractions, add “items” etc…

    We use the YES system.  I believe it might cost less to buy now as there are scaled down versions, but when I bought it it was $5500 I believe for the system and $99.00 per month for support, which is optional but I do use it so we choose to pay that, it’s always been worth it.  Bought it in ’06 so that adds up!

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