the1tom
Forum Replies Created
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I have started a shop from scratch, bought an existing shop, and sold and established shop. I also consulted with a family member who sold an established business using a national broker. Two of the above transactions involved real estate and two did not. All these deals had pros and cons, but they gave me good insight on the different perspectives. They also gave me good insight on valuations and how to set expectations.
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I’d get approval from the customer for the highest labor time, then discount as needed, if needed. No customer would ever be upset if the bill came to less than what you initially told them it would be.
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If you buy a hose clamp for .33 and sell it for 1.25, you have .92 of gross profit. .92/1.25 = 74% parts margin. If you buy a water pump for 30.25 and sell it for 63.74 you get a 53% parts margin. The 30.25 cost of the dealer part or the aftermarket part gets calculated the same.
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Why does “list price” at a dealer make any difference to how you price your part? Why do you let some other company dictate what you need to charge to run your business? Ignore list price. Ignore it from dealers and ignore it from any aftermarket supplier. Use and trust your own price matrix. You will not get very many objections from customers. Don’t be scared.
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We have a tiered parts matrix and measure the margin weekly. A week with an engine or transmission will generally drag down the percentage a bit. Overall we average 53%. A low week is 48% and a high week is 56%
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We use MechanicNet who offers similar services (I think better) but at a lesser cost and no 12 month commitment. We have had great success with the reminders and followup as well. As someone else pointed out, everyone should use some type of CRM program regardless of the vendor they choose.
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I would suggest creating some random recordings of phone conversations. Then arrange a training meeting for the two of you to listen to the recordings and constructively dissect the parts of the conversations that need improvement. Or, seek out a training vendor that incorporates some role play exercises.
