[SSF]

Always good to hear from other market areas. I’d hope that’s 40 euro per tire mounted and balanced! I agree though seems no matter what country you’re in cheap tends to attract the wrong clients and I’m not looking for headaches.

Sadly it’s per one set 🙂 No one will ever pay 40 euros per tire that’s our market right now. As an example our hourly labor rate is ~30 euros.

[SSF]

Hi,

in our market prices for a set of wheels varies from 30 to 40 euros. This includes mounting, balancing, scraping old tires and other stuff like TPMS resets, weights. Fun fact we cannot take any money from customer for getting rid of old tires (this is regulated by law) and we cannot refuse to take old tires. What we do extra we offer our customers to store their summer/winter tires for a season in our shops warehouse for 40 euros per season. As for selling tires – we don’t do that because profit margins are extremely low and you have to provide warranty and so on. I see that the labor prices in our market are way too low at the moment so we don’t take new customers and only serve our old ones because of capacity issues. Changing tires takes time and we have better more profitable things todo. Tire changing is an addon to our services and not a main service we provide.

I know it might sound like a wasted opportunity but from previous experience cheap tire changing doesn’t generate new customers it just attracts those customers who are looking for a cheapest place twice a year 🙂

[SSF]

Hi Chris,

I never thought about that. I understand it’s hard to implement but it’s easy to get these papers signed by my employees. Then I’ll have some additional leverage in case of previously mentioned situation.

Thanks a lot I’ll definitely get these papers signed by everyone in my workshop.

[SSF]

Thank you for your insights and support. I really appreciate it. I joined your discussion board from over seas. I’m based in eastern Europe so some rules are a bit different here but after I reviewed multiple topics on your site I realized that we share same views and we have similar issues.

My further actions are to change my employees and start over again from scratch. It will be very hard for me because this business is running since 1992 and I took over it 5 years ago from my father. I hope I won’t destroy it by taking these actions.

I think I did my best in those 5 years to rebuild our customer base and take care of our employees but what I didn’t realize that some of the employees didn’t like it too much because whey couldn’t work on their own and earn extra money on a side.

Well wish me luck 😀

 

[SSF]

You’re totally right – it is a theft but it’s hard to prove because you have to catch them red handed. Customers are not willing to participate in this and no one is willing to give out any information as a witness. About the lead tech who handed the resignation papers – he’s 100% ok with this scheme because he could earn more money from the parts plus the labor rate we agreed on. And the worst thing is he doesn’t see anything illegal here. Well as far as I know he even directed some of his customers to a near by shop and got some interest there. I know it sounds crazy but this is what I got for not paying attention and avoiding confrontation with some of the best employees event I was noticing strange behaviors.

As for the service adviser I’ll ask him to leave because I don’t believe he will stop doing similar schemes.

For me the moral of the story is:
– if you have any suspicion don’t hesitate or postpone. Have a chat with your employees
– if it’s a fact let these people go as soon as possible so they won’t give any examples to newcomers
– don’t believe stories about customers buying their own parts and so on… trust numbers
– catch them red handed if possible and take legal actions

 

[SSF]

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.

We will still keep everything in our management system as we always do. Detailed labor and parts information. The only thing we will change is the template for customer invoice (no breakdown included). If the customer will be willing to see everything in details we will have an option to print detailed report/invoice.

Another option is to give a minimal breakdown and provide only total:

Service:
Front brakes repair
Parts changed:
Front brake pads
Front rotors

Total: $$$

One more thing that helps me is the online service book I created. It populates all the repair history for each customer. They can access it easily on our website by entering their license plate number and 5 digits from their VIN number. Service book history shows: date of repair, mileage, detailed labor list and detailed parts list. No prices or parts codes included.

 

[SSF]

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.

[SSF]

Another thing worth mentioning to the customer – time is money. I often see customers running around the city during rush hours trying to find parts they assume are necessary to be replaced and often they choose the wrong part or even worse they can’t find it on their own.

I tell my customer just to calculate how much it would cost them to take a taxi and go around the city to find things they need.

The Reason We Charge More are:

• we can check and exactly tell what part needs to be changed
• we know how and where to look for parts
• we deliver parts on our own
• we take full responsibility for the parts we buy and install

In most cases this is more than enough for our customers to understand that it’s better to pay a little more than play in a lottery.

It’s not worth mentioning to some customers that you pay taxes because most of them just don’t care and are willing to save as much money as they can. Sometimes it seems that they live in another dimension. I just try to avoid these customers as they bring only trouble.

Fun fact: customer who bring their own parts are paying same or even more than we would charge them.

And yes the best one is “Try bringing your own meat to the restaurant”. I tell this only to my close friends.

 

[SSF]

Thank you for your input gentlemen. Much appreciate it. I’ll include social insurance taxes into my direct costs in further calculations.

Then fun part is that I didn’t mention. My employee has to pay his own taxes from 1050 Eur he gets which is 243,75 Eur. So at the end my employee gets 806,25 Eur.