Jay, here are my thoughts:
1: Above average sales and average per car.
2: Considering volume and a 40 year history, the odds of that are pretty slim. While there are bad players in any industry, most “facts” about auto repair ripoff are mythical. Once you become immersed in the business you will better be able to answer that question.
Howstuffworks.com is perfect for this. I searched “brakes” and here is the result:
Tom Ham started the topic The Reason We Charge More for Parts Than the Prices You See Online in the forum Parts and Tire related topics 1 month, 3 weeks ago
It’s easy to explain.
Labor rates are artificially low in auto repair. They are subsidized by higher parts prices. It’s easy to illustrate. For decades there has been a constant flow of mechanics and others who open shops and announce that you can buy the parts yourself or they will supply them at cost. Virtually everyone one of them soon goes…[Read more]
Tom Ham replied to the topic Key # 8 Labor Gross Profit – cost of a technician to perform the repair in the forum Employees 2 months ago
You can do it either way depending on what you use for a labor GP goal.
The most common method in the U.S. would to be not to include it because if you do then you really should include all other employee costs of all kinds which can vary from one shop to another so it becomes difficult to compare them accurately.
A typical range here would be…[Read more]
Tom Ham replied to the topic How Much did you Pay for Your First Shop Management System? in the forum Auto and Truck Shop Management Software 2 months, 1 week ago
It was 1994, the system was DOS and included a computer and a “scope” that communicated with the management system. It was changed to Windows95 early in 1995.
About $70,000 when all was said and done (really).
The company disappeared (not sure exactly what happened) and the software was reborn as Mitchell 1 / Shop Key. Other reborn…[Read more]
Tom Ham started the topic Who is this Secret Santa for Independent Auto Repair Shops? in the forum Everything Else 3 months, 2 weeks ago
I want to know the name of this person who is responsible for giving additional years of life and billions of dollars of repairs to tens of thousands of shops. Our shop is already receiving the benefits and we expect to receive much more in the coming years. We may soon need dedicated techs and bays just for this one service.
But I’d like to k…[Read more]
I think you listed the main ones. You could add car count, effective rate, new customers, and this year vs. last year. This is one of those things where some shops track one number and the next shop tracks 100+ in a complex spreadsheet.
My thoughts on which are most critical:
Compared to…[Read more]
Many shops avoid the parts and labor pricing issue by employing job pricing in their software where parts and labor are listed separately, but they are not priced separately. Example:
There is no rational reason to break out the prices unless the law dictates it. And, if that is the case, the law in…[Read more]
Maybe a reality check would help.
Is Amazon going to offer packages where you buy your steak and take it to the local Amazon partner restaurant to grille it? Nope – because Amazon would tell you that’s ridiculous.
Everything Amazon does is not brilliant by default. They can do really dumb stuff just like anyone else.
I thought Marcus Lemonis to…[Read more]
Regarding Joseph Automotive’s comment about an Amazon door rate of $400 per hour…
While that may be a bit high, the reality is that a solidly profitable shop in the Midwest U.S requires $110 to $130 per sold hour in gross profit dollars from both labor and parts together.
So, if all parts profit is eliminated, that leaves only labor profit. A…[Read more]
Larry, I think very, very few people realize how huge this issue is and the impact of what is coming.
Bottom line is that the government is going to have to stop paying people not to work, but I have heard no one bring that up in any significant way.
Much wailing and gnashing of teeth coming soon due to all this.
If there is anything at all that you want the techs to handle when the car is completed, put it on a checklist. Ideally, the checklist is a job kit/canned job in your software that is applied to every RO every time. Tech does not get next car until checklist is done. In some software the checklist can be mandatory, so if all lines are not checked…[Read more]
The cost of upgrading your software will likely by offset just by the time you and your techs can spend making money instead of the time wasted now doing the paperwork and math. Nothing wrong with the concept of your system, but the result you want can occur with a few mouse clicks with good software. Go the the software demos page on this site -…[Read more]
Easiest way to track is with management software that does it fully.
Always pay the techs for what they have completed so far as much as you possibly can.
Can you post a math example of what you are referring to? I’m not sure I understand it.
If recommendations are driving them away, then maybe the presentations could be better or they are not customers you want anyway. We moved to using owner’s manual for recommendations (unless something obviously has an issue). If you sell every maintenance service in the factory schedule you will have to hire more techs to handle it all. We do same…[Read more]
Successful shops typically pay their techs 25% to 35% of their effective labor rate. So, to figure out what their labor rate should be they work the numbers starting with their average tech pay per hour, then calculate what their labor rate needs to be to hit the right percentage. Example, if you wanted 30% for the tech and 70% for the shop and…[Read more]
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