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The Power of Being Part of a Banner Program


Carguy

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I've decided I want to join a banner program, but I'm having a difficult time deciding which one. 

My shop is in Tucson Arizona. We (Tucson) are kind of unique in that the parts supplier in town who is usually going to have the part available and reasonably priced is a locally owned franchise called Merles. (not a national chain)

They've been around a long time and have market saturation locally that the big boys have always envied. 

They were recently (within last 2-3 years) purchased by the same conglomerate that owns NAPA, which extends their buying power even further. 

They give excellent service and pricing, and when our shop was brand new and had no established credit they gave us NET 10th credit terms immediately when everyone else (First Call, Factory Motor Parts, Autozone, Worldpac etc...) wanted us to either pay cash to get established, or guarantee it against mine and my business partner's personal credit. 

They have a program called Auto Service Experts (I'm not sure if this was a banner program they've always been affiliated with or if it came in with their affiliation with NAPA)

However, Advanced Auto Parts recently moved into Tucson and they are wanting our business. They are very competitively priced.  They (along with Carquest and Worldpac) are part of the Tech-Net program.

The one advantage Tech-Net appears to have over Auto Service Experts is their labor claims. (Auto Service Experts limits you to 3 hours at $75/hour and a limited number of claims each calendar year)

Tech-Net current labor reimbursement on labor claims is also $75/hour but they don't have limitations on how many hours per claim (based solely on labor manual flat rate time) or how many claims per year....which could be huge if you get a bad part on a high labor job like an oil pump. 

However, in order for my customers to be covered on the 36/36 warranty and for me to get the labor claims all parts would have to come from them (Advanced, CarQuest or Worldpac).

Merles has been good to me and I value that business relationship. I'm not ready to stop buying from them. However, the tech-net program offered by Advanced Auto Parts appears to be a better overall program than what they offer.

My local Advanced Auto Parts branch has given me excellent customer service so far, and is willing to price match. However, they don't always have the part available same day and rather than wait a day for them to bring it down from Phoenix I'd rather just purchase the part from Merles.

I saw in a different thread someone talking about Certified Auto Repair banner program offered through First Call. It claimed that the nationwide warranty is good no matter where you buy your parts because it's offered through Certified Auto Repair, not by Firstcall. However, that is a very old post and I'm not sure that information is still valid. Everything I've read on the program that is current seems to suggest you are expected to buy your parts from FirstCall. 

One option is to join both banner programs and then continue buying my parts on a case by case basis from either Merles or Advanced whichever has the part available immediately at the best price (which is what I'm currently doing)

However, I'm not sure I can justify the cost of both programs annually for the overall benefits. 

Another option is to go ahead and join Tech-Net because it's the better program, and roll the dice on Advance Auto Parts eventually being able to offer me the same level of service that Merles has offered me in the past.

The final option is to join the Auto Service Experts program that Merles offers.  I'm not really happy with the severe limitations on their labor claims, but in every other way the program is competitive with Tech-Net.

Obviously, this is a decision my business partner and I will have to make, and I'm not asking anyone to tell me what I should do.

However, if there are other options I'm not aware of (like a true banner program that covers you no matter where you buy your parts) or if anyone has any other input or information on the two programs I'm discussing that I may not be aware of, I'd deeply appreciate it.

Thanks in advance. 
 





 

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  • Have you checked out Joe's Latest Blog?

         0 comments
      Auto shop owners are always looking for ways to improve production levels. They focus their attention on their technicians and require certain expectations of performance in billable labor hours. While technicians must know what is expected of them, they have a limited amount of control over production levels. When all factors are considered, the only thing a well-trained technician has control over is his or her actual efficiency.
      As a review, technician efficiency is the amount of labor time it takes a technician to complete a job compared to the labor time being billed to the customer. Productivity is the time the technician is billing labor hours compared to the time the technician is physically at the shop. The reality is that a technician can be very efficient, but not productive if the technician has a lot of downtime waiting for parts, waiting too long between jobs, or poor workflow systems.
      But let’s go deeper into what affects production in the typical auto repair shop. As a business coach, one of the biggest reasons for low shop production is not charging the correct labor time. Labor for extensive jobs is often not being billed accurately. Rust, seized bolts, and wrong published labor times are just a few reasons for lost labor dollars.
      Another common problem is not understanding how to bill for jobs that require extensive diagnostic testing, and complicated procedures to arrive at the root cause for an onboard computer problem, electrical issue, or drivability issue. These jobs usually take time to analyze, using sophisticated tools, and by the shop’s top technician. Typically, these jobs are billed at a standard menu labor charge, instead of at a higher labor rate. This results in less billed labor hours than the actual labor time spent. The amount of lost labor hours here can cripple a shop’s overall profit.
      Many shop owners do a great job at calculating their labor rate but may not understand what their true effective labor is, which is their labor sales divided by the total labor hours sold. In many cases, I have seen a shop that has a shop labor rate of over $150.00 per hour, but the actual effective labor rate is around $100. Not good.
      Lastly, technician production can suffer when the service advisors are too busy or not motivated to build relationships with customers, which results in a low sales closing ratio. And let’s not forget that to be productive, a shop needs to have the right systems, the right tools and equipment, an extensive information system, and of course, great leadership.
      The bottom line is this; many factors need to be considered when looking to increase production levels. While it does start with the technician, it doesn’t end there. Consider all the factors above when looking for ways to improve your shop’s labor production.
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