[Jose Garcia]

Whenever there is change, touting how great your business is and how poor the customers are doesn’t put the business in a posture to profit from the change.

Customers are buying parts online, the quality of such parts range from catastrophic junk to quality far superior to OEM.  Businesses married to old profit models are going to grow stagnant or lose customers as the marketplace continues to evolve.  Service businesses grow by maximizing positive exchanges with the public; not by harboring resentment of “consumers.”  Change in any marketplace goes hand in hand with opportunity.   Raising hourly rates and installing parts at cost is one method.  What are the others? Exploring contracts to offer customer parts warranties for sale at the shop through a third party, like SquareTrade for example, there are others.  Negotiate with the insurer to receive a percentage of warranty sales, the warranty includes parts and labor; if the part fails the shop isn’t eating any unreimbursed labor expenses, and neither is the customer.  The shop has an additional revenue stream as a percentage of warranty sales.  Say the shop has a policy “we don’t do customer parts  – unless – customer purchases a parts and labor warranty on that repair only.”  Obviously the concept is raw, but my point is that there are unexplored opportunities to profit from the internet customer supplied parts market place change. Just saying no isn’t going to keep a shop competitive, you’re putting off an entire market segment.  The real world isn’t as tidy and ideal as we’d like it to be, Americans are in debt up to their eyeballs, they’re looking for every possible bargain.   At the same time, small business owners have a payroll to meet, business development costs, training, certification, taxes, overhead, etc. Give customers their bargain on their parts.  Keep them happy with a warrantied repair.  Avoid losing time and money on returns.  Add another revenue stream from the sale of single service warranties.