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Pricing, Discounts, Labor Rate

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Parts matrix, shop labor rate, add-ons, and maintaining the correct pricing strategy to ensure your shop is profitable. Discounts, coupons, and specials.

33 topics in this forum

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    • 25 replies
    • 9 replies
    • 114 replies
    • 4 replies
    • 95 replies
  1. Price Negotiations

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    • 25 replies
    • 7 replies
    • 17 replies
  2. Gross Profit

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    • 26 replies
  3. Parts markup?

    • 32 replies
    • 34 replies
  4. Storage fees.

    • 1 reply
    • 17 replies
    • 24 replies
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  5. Labor Rates

    • 16 replies
  6. Parts markup

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  7. Price Sheets

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  9. Marking up parts

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  10. Napa Tams list/mark up

    • 0 replies
  11. matrix help

    • 3 replies
    • 10 replies
    • 12 replies
  12. Labor Rates

    • 11 replies
  13. Question on List Price

    • 13 replies
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    • We're at $130 and on our invoices, I don't print the rate or hours (not required to).   We simply quote a labor charge for the job.   I have a shop near me with a labor rate of $99, but job for job, his labor charges are same or higher than mine - using additional labor hours.  We pad for our persistent negotiators to have room for them "to win".   If asked, we share the labor rate.   We start with a base diagnostic of $99.95 for the 1st hour.  While working on this, we fail to always charge for longer diags.  Sometimes it's lost and sometimes we factor it into the rest of the job when building the quote.      Even when we're asked the labor rate, we haven't received any negative feedback on it.  We build value / trust which helps on approvals.  If we don't close a deal, it is usually related to cost-of-job vs value-of-the-car OR cost-of-job vs down-payment on a new car.   I get more vitriol for having the audacity to charge for diag.   If I get a pure price shopper, I quickly dismiss them saying we won't be the cheapest.  
    • We're far from that, I took 0 offense to what you said and just look to provide a medium for discussion.  We all do what we need to do to survive, but I think more often than not we all do the same things at different times in our career and how it was executed... depends on the outcome.   To your point, we're really upfront with new customers that we do not work for free and there will be a charge to look at their vehicle.  We literally give them the keys and state "This is how long it takes us to do X, we need to do X first and then move onto Y, which requires Z time.  It is impossible to predict if we will need more time at this stage, but we can only promise to be fair and forthcoming in everything we do. We understand this might not suit your needs, but we're always here should you need it." When you say that because you mean it and not because it's a sell line, people will open their minds to the idea of trusting you. Once you give them a reason to solidify that trust by doing exactly as you said... you change the conversion from 2 in 10 customers to 4 in 10 customer becoming life long customers. I really just want to reiterate to everyone that the basis for my success started when I treated every single customer as I would expect to be treated in that scenario.  It doesn't mean I didn't lose my cool or make a mistake or I didn't perform a service for free to make it up to someone... It means I set my goal and I did everything in my power every single day to achieve it. Ultimately, years of free training provided by a local vendor.... made me open my eyes.  But I still had to do the leg work.   Just remember everyone: A thorough vehicle inspection takes no less than 45 minutes. Full code scan: 10 minutes on a $4000+ piece of equipment, with monthly updating costs. Test drive?:15 mins min, depending on customer concern Lift and wheels off: 15-20 mins Document findings: text, photo 10 mins Build estimate: 5 minutes to 3 hours. The fastest at their craft and process can do that in 45 minutes. It;s likely closer to an hour from start to finish depending on exact needs. Would you call your plumber and electrician, that pays you for your service at your shop, and expect them to do the equivalent for free? Why should you?
    • I like a lot of what you wrote.  From the way you structured your scenario that I replied to, it sounded like you did all that work and then handed them the bill.  I couldn't figure out at what points you contacted the customer for additional approval.  For my misunderstanding I apologize, but I NEVER intended any disrespect.   I agree that documentation and explanation are key.  My best customer is the educated customer.  Not college or higher learning, but the one who is aware of what I have done, what needs to be done and why it needs to be done to achieve their objective of a safe and reliable car.  I feel it is my job to educate them on these topics so they can make an educated decision that hopefully is the best decision for them and their family.  So documentation is key.  You really caught my eye with your line, "When you treat someone like a friend and respect their hard earned money..." because that is exactly how I treat my customers.  I work hard for my money and demand value for what I spend.  I expect to provide the same to my customers.  And above all, I fully realize that I am spending my customer's money when I recommend a repair.  I understand Genuine's position and I fought the same fight, people claimed they didn't have any money.  And during the recession or the beginning months of the year, that is true, many people are barely getting by.  But building a relationship, if you can, is the key.  Out of 100 customers through the door, you might only retain 20 and only 10 become long-term customers.  But building relationships and adamantly demanding honesty, knowing when to turn down a job because it's not "right" is the best way to conduct business I believe.   We all hear, "But I'm going to be selling the car soon," as a ploy to get us to 'band-aid' a repair.  What happens when we do? A year later the customer comes back with, "But you just FIXED it."  But did you really fix it or did you just band-aid it so they could sell the car like they swore they were going to do?  Or you put the cheapest part on because anything was better than the bad on that was on the car.  One year warranty you tell them but that won't matter because they are going to sell the car.  Two years later they come back, "But you just put that on, now it's bad again.  I shouldn't have to pay for it again because YOU put a cheap part on."  It took me about 3 years to finally figure out how to call the "But I'm selling it" customer a liar without being offensive and to REFUSE to do anything but, "The right job, the right way, at a fair and honest price."  Now when I hear that line, unless there is literally a For Sale sign in the window, I do NOT believe it and I NEVER compromise my quality and integrity in order to meet their expected low price point.  I have built a reputation and most of my customers simply say, "Fix it, I trust you."  But that is of course after I explain, what went wrong, why it needs THIS specific repair and how much it will cost. But the bottom line is, I hope you did not feel that I was disrespecting you, or if you did that you understand now that I was not.  I just didn't know where in your scenario you made your calls for additional time and repairs.
    • I've learned a few things on my own, but this: Not because I think I can't but because I do not have the means, opportunities or privileges to do so.  This is probably the most accurate phrase I've read in a while.   But you know what I did have when I didn't have means, opportunities or privileges?  I had time to pick a discipline and learn it.  Then I enacted it.   While I let that run it's course, I found the next thing I knew nothing about and couldn't afford an expert, I learned that to the best of my ability and enacted it.   I've run this gauntlet for almost 12 years now over 3 locations and on the brink of watching it all vanish at least twice in those 12 years.   Through those trials were and sometimes still are a sh*tload of tears, but tomorrow is always a new day and as long as I conducted myself with integrity today... I'll sleep just fine.   Not to discount Genuine, location surely is a strong variable in success, but that doesn't mean you can't find a form of success in a sh*tty location. I've done it, with the most laughable budget known to man and in a miserable part of town all by making a plan and enacting it one day at a time. Plan has a fault? Something doesn't work? Adjust. Repeat.   Some of the best advice I ever got was exactly this:  Your shop is no different than a factory, a factory has to have X level of output to be sustainable.  Your shop has to reach X level of output just like the factory does.  I'm not going to tell you how to do it, but if you want to survive you have to have to figure out how to do it. I had never thought about shop output as related to factory output.  That seed is what lead me to charging for diagnostic and thorough inspections.  But I didn't wake up the next day and go full rate.  I worked my way there.  Finding my footing along the way and over delivering to my customers in every way possible.
    • Anyone have any first hand experience with this company? Rocket Level Marketing. Pushing hard on IG, looks legit but most do. Thanks in advance.
    • Wow, so well said on every level ThetrustedMechanic. Thanks for such a well written reply! It doesn't help pay the bills but knowing I'm not completely crazy or alone in my circumstance does ease that "turnip stew" a little. And I have spoken with JTB - and have his book. Nice guy, well intentioned, and many of his methods may work in many places...I just can't explain it, nor does anyone believe it unless they've walked a mile in my shoes....I operate in that corner of the twilight zone where things just do not react like the rest of the world. I'd pay dearly if someone could come in and change it and prove me wrong! I'd like to retire on an up note! Best success to you as well.
    • We have a fair amount of customers that are very budget conscious.  We just treat them like people and help them make the best decisions based on whatever they can afford.  Even if they can't afford anything. The ones who understand what you do for them, become your biggest advocates without you ever knowing.  The ones who don't, never return and likely aren't a good customer base for you anyway. To make you feel better... I started here "So sometimes it's easier to play their game, agree to "include it in the cost of repair" and not have to deal with the jack legs getting in there first. "... and worked my way up slowly to where I am.  We all have to start somewhere. One you built up the trust, where customers aren't wondering if you're taking advantage of them all the time... the pricing part gradually becomes easier.  It's just never "easy". 
    • Hi all! Lots of interesting scenarios unfolding here, and most all are very valid. BUT, all work great in a perfect world. As someone above stated, "until techs all get on board like plumbers, electricians etc"...THAT is the key! In a community where ALL the shops abide by this policy - charging fairly for their diag time - it works great. But unfortunately, especially in low income areas, it just doesn't work that way. AUTOZONE becomes the diagnostic place and any guy on the street will attempt to replace any part they say is needed. When all that fails (and we all know it will) THEN they end up on my door, broke, angry, and expecting me to gladly pick up the pieces! Now, in addition to the original problem, I have to address all of the other stuff that someone has done.  It's the nature of the beast trying to operate a legit business in poorer neighborhoods. So sometimes it's easier to play their game, agree to "include it in the cost of repair" and not have to deal with the jack legs getting in there first. Truly it is a lose lose. A reminder to the wise when thinking about getting in this business.....LOCATION LOCATION LOCATION has never been truer!

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