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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.

32 topics in this forum

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  1. Marking up parts

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  2. Labor Rates

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  3. Question on List Price

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  4. Parts markup?

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  5. Napa Tams list/mark up

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  6. Labor Rates

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  7. matrix help

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  8. SHOP LABOR RATE

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  9. Price Negotiations

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  10. Gross Profit

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  11. Parts markup

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  12. Price Sheets

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    • 456 views
  13. Storage fees.

    • 1 reply
    • 450 views
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    • Hi!  I'm looking to open a new automotive repair shop and I could use some help assessing a specific opportunity from the experts here.  To put this in perspective, I would be a new owner without prior repair shop experience, however, I understand repair work and have done almost all of my own work on my personal vehicles for nearly 30 years.  The scope of work I have personally performed included transmissions swaps, suspension, brakes, ignition systems, fuel systems, computer diagnostics and so on.  My formal training is in science and management and I've been in corporate positions for 20+ years.  I also have experience running my own real estate rental business.  I've always been interested in auto repair and I believe this business would be a very good fit for my aptitude, skills and experience.  I would plan to operate as the business owner and bring in skilled staff to handle repairs and customer engagement under my leadership. Here is the scenario I could use help with.  I found a 10,000 sq. ft. building which is split up between 6 existing bays (3 front and 3 rear), office space and retail area.  The section with the bays has about 5000 sq. ft. , about 1000 sq. ft. of office space and another 4,000 sq. ft. of retail area.  The property has not been used for auto repair in a long time but could be converted back very quickly along with opportunity to do something interesting in the retail area.    I have many potential ideas for the property.  I am running into two primary challenges in evaluating the opportunity.  The first is the competitive landscape and the second is how quickly I could ramp up the business along with how much business I would likely do from the location after ramp up. The property is located on a main road with 20-40k total vehicles/day depending on the day of week.  About a mile up the road, in a cluster, there are 6 name brand auto dealerships.  On the same road, within just a few miles from the site, there are three tire shops, one local and two name brand, along with a Midas and another local 6 bay garage.  Think of this as 5 competitors, each with 6 bays plus the new car dealers.  There are a handful of smaller local shops with 1-2 bays locally as well.  Also, there is a State DMV location, with inspection services in the same zone.  The overall geographic area is in a town that contains a Wal-Mart, Lowes, BJ's and a Costco plus restaurants, etc..  These stores are all within 10 minutes from the potential new location.  The next closest big retail areas are 30 minutes north or 40 minutes south of the target area described.  The demographics of the area skew affluent and population density is moderate - this is not a big city - however people are drawn in from at least a 30 minute drive time radius due to the shopping and other resources.  I have a few ideas to differentiate my business from the rest in the area although on Google, it appears that most of the competing businesses have decent reviews overall.  My shop would do all types of repairs including the heavier stuff and the bays are very tall so we could potentially accommodate trucks too. So, my questions are: Is this an opportunity worth considering given the competitive landscape? If I were to open a shop, how quickly should I expect business to ramp up? I am really looking for solid feedback from folks with deep experience in this industry to help me evaluate if this is a business proposition worthy of consideration at this location. Thank you!
    • Well, I'm not having a problem today.  I see a post box there now and I expect that it would work.   I didn't see one previously, but I can't promise that I wasn't blind on that day.  Indeed this was a response to that article and belongs there.
    • Same in Jersey! We are responsible for the part whether we supplied it or the customer. I use the same “insurance liability” statement. Shuts it down right there. Works every time. Never had a customer argue the point after that.
    • The Autel MaxiDiag MD808 is a good choice for a Professional OBD2 Scan tool because of the smart design and advanced features. It can help with oil and maintenance service light resets. But have some cons like slow speed for scanning & sometimes Inst. manual is indeterminate or vague.
    • We don't see it a lot, but when we do, we keep it simple. We tell them that we cannot install customer supplied parts, that my insurance company will not allow it, and that would put my business licenses, as well as a number of my relationships with outside organizations that require insurance, at risk. It completely eliminates the steak and potatoes conversation, or it's variations like bringing your own needles or stitches to the hospital. It also eliminates the I have to make money conversation. None of those usually go very well. It shows you are open to discussing it, and the customer will see that as an opportunity to sway you their direction. When they can't, they will experience it as a failure.  Joe, in your opening post, you stated: "I review all the benefits of me suppling the part, the warranty and the fact that if the part is wrong or defective or fails in the future, he will have no recourse and will have to pay to have done all again." You may want to check the laws in your area. There have been quite a few legal cases that have established that you are just as responsible and liable for a customer supplied part as you are for a part that you supplied. You may have to provide the same warranty on their part as you do on one you supply and sell. That's right, you may end up buying a new part out of your pocket, and providing the labor to install it. Even if a customer does not pursue legal actions, they almost always expect that you will "help" them out with the cost of replacing their part, after all, they "already paid you for the repair".  For anyone who is still installing customer supplied parts, I suggest you check with your insurance agent to see if you have coverage should the customer supplied part fails. Don't waste your time having a customer sign a waiver. These will never hold up in court. This has been battle tested. The courts hold you to be the expert, not the customer. If you agreed to install it, you have given it your stamp of approval, and now it is your responsibility.  There is a more complete article here: https://www.searchautoparts.com/cust-supplied-parts-liability-again One interesting extract from that article is: "I know that in my home state of Maryland and many other states, there also is an issue of parts warranties not being transferrable. In Maryland, any installed part has to be given a minimum 4,000-mile/90-day warranty, and any repair facility would be on its own if a customer supplied part fails. Those implied warranties are very serious business, with all of the risk and liability that comes with them, including such little gems as responsibility for property damage or bodily injury. Install a customer supplied part at your own risk."   Maryland also happens to be where my shop is.     
    • Personal on all 4 subjects. The only texting I do is to get authorization on an ESTIMATE overrun and to advise the customer of job completion and picture of INVOICE. On texting of job completion and picture of INVOICE I have had very positive feedback.    
    • Every bay in my shop is no different than a machine in a factory making whatever they make. I need that machine running to make living. That's why I bought the machine.  What happens when the customer supplied part is wrong or defective? Now my machine is shut down while I wait for him to get off work, find the time to ship it back and get a new one delivered plus spend time helping him negotiate who's fault the problem was? Who's going to pay me for the lost income while my machine is shut down? The cheap customer? 


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