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Posted

We had an issue with one of our important accounts about the price of an air filter of all things. 2014 Dodge Charger. Air filter price installed was $51.00. Our price was $25.48. This is for a premium filter as the economy grade was not in stock anywhere and this client demands a quick turn around. Our pricing on filters is based off a pretty standard matrix and we do not charge labor. One of my techs inadvertently got into the debate and tells me how "down south" (he worked in North Carolina for a stint) they only mark filters up $10 and don't charge labor on filters either. Seems unrealistic to me but nonetheless I still would appreciate actual shop owners input on this subject. Am I too high, too low, or in the ballpark? How do you guys price smalls such as filter, blades, etc.?

Posted

Did the customer have a problem with the price? I am unsure of where the problem arose. Is it just the tech thinking hes doing something wrong?

 

We personally mark all parts up via our matrix. Since air filters are in the lower price range we generally leave the matrix as is with the higher %. We also charge for labor, usually .2 - .3. 99% of the time I do not allow my techs to do anything unless they are getting paid for it. If its by chance we decide to perform a air filter swap courtesy for a good client (no charge) we will always at least make sure we are making some money on the part. We are for profit businesses and businesses exist to make money. Doesn't mean we can't help people, we most certainly should however we have to make a profit to continue to provide exceptional service and be in existence for our clients. Profit is not a dirty word.

 

You may or may not want to treat your fleet accounts a bit differently. I don't do fleet work so my experience is limited however from all the questions I've ever asked, you should set terms in the beginning (payment terms, labor rate, parts pricing etc). Make sure everything is agreed upon before hand and that you are still profitable. If you are working with a stand up commercial account that appreciates your relationship and work I don't see it being an issue.

  • Like 1
Posted

Sorry, but the first thing that jumped out at me is you're installing filters for free. Why?!?! I mean, 75% of my customers couldn't install their filters on their own if their life depended on it, so why would we do it for free? That is exactly why people come to shops, because they can't or wont do the work themselves and are willing to pay for it.

Posted

It was an issue with the client. He was wondering why it was so high. We worked things out with him and he's cool with it now. They are on pace to do $200,000 with us this year so we bend over backwards to make them happy. I was worried I may have been overpricing them.

Posted

I don't know about you, but that filter right now is not a common stock item, my cost on the Hastings is $17.25 and the OEM Mopar is $33.23. List price is $53.28.

 

Not knowing the context I wouldn't be able to tell you anything other than selling it at $51 on a corporate account that you have to wait 30 to 60 days to get paid is kinda cheap.

 

And don't get me started on techs trying to tell me how others do it and how to run my business. I listen to what they have to say, but never get them involved discussing pricing in front of my customers. It's me who has to worry about making their payroll even when sales for the week haven't broken even. Suffice to say they haven't a clue as to the plain overhead expenses that take to keep the doors open and the lights on, their benefits, taxes, etc.

  • Like 1
  • 2 weeks later...
Posted

We mark up premium filters to our fleets at 1.7 . The issue about free install Most shop's do not show labor charge for a filter , not worth the battle we add it into are retail price , tech gets compensated. It is not labor and parts to fight about--- what do you want to make and what the costumer percieves - Most client's it would be a debate for labor on an air filter.

 

My Belief Dan Reichow

Posted

I'm amazed out how many people on here really think that most of their customers could change their own filters and wiper blades. Maybe our shops have very different clientele, but I'd say about 25% of my customers don't even know how to open the hood on their car. Of the remaining 75%, maybe half would even get close to where the air filter is located, but they still wouldn't know how to access it without breaking a couple of engine cover clips and unknowingly disconnecting vacuum lines, etc.

 

The way I look at it, folks come to us and pay us to do work they either don't know how to do or have no interest in doing it themselves. IE, you know how to grill a steak, but Outback doesn't cook it for free just because it's not that difficult or because it's a routine thing. You pay them for the convenience and they might even use some better spices or cooking techniques that you don't know about. I view it the same way.

Posted

This issue depends on your customer base. I deal with low income customers and I could not get away with that. The same thing would go with a battery. They know they could go to AutoZone and buy it with free install so all I can do is sell it at AutoZone walk in price and pocket the difference of my discount. For the air filter, at my shop I wouldn't go much more than $10.00 mark up with no labor. I have some friends with nice big shops on the high income side of town and it is a different story for them.

  • 2 weeks later...
Posted

We are in NC and we don't charge labor for air filters but we matrix the part completely. For a Napa Gold filter on average we pay about $7 and sell it around $22ish (all matrixed)

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  • Have you checked out Joe's Latest Blog?

         0 comments
      The Technician Shortage Is Our Fault, And It's Time We Own It
      Nearly every day, I hear shop owners complain: "There's a technician shortage. We can't find qualified people. There's no one out there." If that's true, then who's to blame?
      The industry? The schools? The government? I don't know how you feel, but who promised us an endless supply of qualified technicians?
      Another common complaint is that young people do not want to work in the trades. Well, if that were true, then why are other trades such as HVAC, electrical, and plumbing growing? What are they doing that the automotive industry is not? 
      Here's the reality we need to face: We do have a problem, but we shouldn't look for someone or any entity to rescue us. Not the government. Not the trade schools. Not the recruiting companies. No one owes us a workforce. If we want great people in our industry, it's up to us. At some point, we need to own up to the truth: Building a pipeline of qualified technicians is our responsibility.
      In this blog article, I will break down the key reasons we are in this situation today and what we, as an industry, can do to solve the technician shortage. Are you ready to look in the mirror?
      Have We Pushed Technicians Away?
      Let's take a look at flat-rate pay. True flat rate, which pays a technician only for the hours they produce, is a controversial pay plan that emphasizes high production levels and creates a competitive work environment that, if not properly controlled, can lead to increased mistakes and a decline in morale and team spirit. Additionally, the stress and physical demands placed on technicians as they age are not favorable to long-term employee retention. What do we do with technicians as they grow older into their fifties and begin to slow down? 
      I have heard all the arguments and pros and cons of flat-rate pay, and I am not going to judge any pay plan. Let the facts speak for themselves. True flat rate has changed in most areas around the country and has evolved into a pay plan that gives technicians some pay guarantee.
      Many shop owners have learned that team morale, along with the opportunity to earn income, is important to technicians and to the company's long-term success. But let me ask you: how many technicians have left or been pushed out over the years because of the old flat-rate pay system?
      Another issue is the workplace environment. I remember being grateful to be hired as a young technician at a local repair shop. While very thankful, the work environment was not ideal. The shop owner kept the bay doors open year-round (I am from New York) unless it rained or snowed. He felt that if the bay doors were closed, customers might think we were closed for business. We had no heat and no hot water. Many of the jobs were done outside, year-round,  in all types of weather. The starting pay was minimum wage, with no benefits, sick days, or vacation pay. 
      Now, again, I need to point out that I was truly grateful for the opportunity this shop owner gave me. I learned a lot working there, and the experience was pivotal in my career. But looking back, I wonder how many people were discouraged by these working conditions?
      While the physical demands of the repair workplace are daunting, perhaps even more critical is the culture. Too many of my generation shop owners preached the mindset of "my way or the highway." We were the business owners, after all. We started our companies, took all the risks, and provided jobs. Why shouldn't we be the ones to set the ground rules our way?   
      Many of us found over the years that the "my way or the highway" mentality was a sure way to isolate employees and make them more likely to look over the fence for greener grass. In other words, it led many technicians to seek employment elsewhere, where they felt they could be appreciated and recognized for their hard work. The issue, however, was that there wasn't much green grass around. Disappointment after disappointment, bouncing from repair to repair shop, eventually led to despair. So, I ask you: were workplace conditions a contributing factor in today's technician shortage?
      Another factor that we are all well aware of is the complexity of the modern automobile. When I started, the work was mostly physical, and you were required to master essentially three vehicle models: General Motors, Ford, and Chrysler. Let's fast-forward to today. The evolution of automotive technology, along with the extensive training and tools required, has outpaced the typical technician's pay compensation, with no clear career path. Again, leading to frustration and insecurity about the future.
      Here is the bottom line: people don't leave their job; they leave their experience. We must do a better job. 
      The News Isn't all Bad; Your Next Steps to Fix the Technician Shortage
      To fix the technician shortage, it will take a combined effort from everyone in the automotive industry, particularly automotive shop owners. Shop owners are in the perfect position to make the greatest impact, not only on their businesses but also on the future automotive workforce.
      First, shop owners must become better leaders and understand that their ultimate success is directly dependent on the people they assemble around them. Any shop owner who mistakenly believes they can build an empire solely on their abilities is destined for serious disappointment. Business owners who think like this will eventually plateau. Without the collective contributions from a team of qualified people, your business will stall; it will not continue to grow.
      Create a workplace that attracts top talent: a clean, professional, well-equipped facility designed to support productivity, teamwork, and a career, not just a job. Build a great reputation in your community by getting involved locally. Become the auto repair shop that people take notice of as "the" place to work.
      Next, shop owners must become more financially knowledgeable. Knowing your numbers and what you need to achieve for a strong bottom-line profit is essential to paying technicians the money they need and deserve. Profit will also allow you to compete with other trade industries by providing a benefits package that has real take-home value and security.
      When it comes to culture, this is where the rubber hits the road. People crave recognition, praise, and a sense of purpose. Despite what you hear, people are not just money-motivated. Once people feel secure in their financial situation, retaining and motivating technicians can only be achieved by connecting with them on an emotional level. You cannot show enough appreciation. Give out praise for a job well done as if your business depended on it, because it does.
      As technicians age, we need to have a place for them. Expecting a 58-year-old to perform like a 35-year-old is unrealistic. We need to be more focused on career pathing. Provide training, skill development, and coaching to develop leaders and mentors within our older workforce. While their bodies may have slowed, the knowledge they have gained is priceless. 
      Our future is dependent on young people entering our industry. We need to give more young people opportunities. Every shop owner across the country should consider hiring an apprentice, then build an apprentice training plan and career path for them. If every shop did this, we could solve the technician shortage within five years. Get involved with the trade schools and high schools in your area. Look into the NAPA Apprenticeship Program. Don't sit on your hands with this one. Do it today.
      Lastly, don't get left behind. Commit to ongoing training for all your employees. Keep up to date with tools and equipment tailored to your business model. Don't try to be all things to all people and all vehicles. Identify your core profile customer and the vehicles they drive, and become an expert on those vehicles and the services you offer.
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