matrix help

[Dr.Dave]

Hey guys I know we have gone over this before but I'm still having a hard time.I have been open for 3 months now I;m in the middle of a small communty on the edge of a small city/town.I am a Napa Care Center,I use Tracs.I am a mechanic/tech by trade so this is new to me.I went to one of Chubby's seminars and agree I was not marking up enough and need to start thinking like a shop owner.I was bouncing around the 40% gross profit,I now try 50% for smaller parts.Chubbys matix seems too high for me only because all my costumers are first timers.Chubbys methods seems its more for established garages.I also think that Napa's prices on some things to me are high,And things like fluid ATF oil can,t be marked up 69% if your needing say 7 qt Dex Merc would be $18 a qt to the costomer if I bought from Napa....really? I need a matrix I can trust I,m adjusting prices on the fly I can't teach anybody how to do tickets like this.Please does anybody have a happy medeuim?

[DewayneP]

I can't offer help on the matrix, but I can offer some advise. Find your local lubricant dealer and buy in bulk. When I say bulk I don't mean 500 gallons at a time. I'm working with a local dealer that has lubricants (oil, ATF, Antifreeze, grease, gear oil, etc...) available in Quarts, gallons, 5 gallon buckets, 16 gallon drums, 30 gallon drums, 55 gallon drums and bulk (they fill your tank). I have found them to be the best way to get a fair price on items like oil, ATF, etc... I, like you, was purchasing oils from NAPA but they don't give any discount on that stuff. I paid $6.79/quart for Dexron VI and couldn't bring myself to charge the customer more than $7.25/quart. I thought that was enough to pay. Anyway, for the oils and lubricants buy in bulk and you will be able to use your matrix and be competitive without having to manually adjust prices. For example, I pay under $4 a quart for Dexron VI in quart bottles by purchasing from the lubricants dealer. If I bought it in a 5 gallon bucket the price would drop and so on. Good luck.

[Joe Marconi]

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[Dr.Dave]

My advice is not to come out of the gate too high priced or too low priced. You need to have a balance between being competitive and being profitable. Eventually, after you have been in business for while and track your costs of doing business, you will know what your breakeven is and what you need above breakeven to make a return on investment. With that said, you also need to build a customer base.

 

Sell value, not price. The price is the first thing the customer asks for and should be the last thing you tell them. In other words, don’t tell a customer, “You need a tire rotation”. Instead, tell the customer, “Mr. Customer, your front tires are starting to show wear on the outer edges and to maximize tire life and save you money in the long run, we need to rotate the tires today”. See the difference?

 

I know you asked for help with a matrix, but I want to stress, it’s not all about price. Again, show value in your service.

 

For lower cost items you can charge 60 to 80%, let say under $15.00. So if a part that cost you $3.00, you may be able to get $12.00 list. As the cost price gets higher, let say $50.00, you may want to charge $100.00 for that part. You overall profit should be enough to support your business. If for purchase an engine for $1,500.000, your percentage may only be 15-20%. Shops typically look for anywhere from 45-55% overall on parts.

 

Hope this helps…

Thanks I'm getting closer to getting my pricing together i got some fluid from a distributor .i AM STILL AFRAII HAVE BEEN DOING MY OWN MARK UP AFTR LOOKING AT THE COST ON EVERY TICKET BUT THAT IS TIME COMSUMING AND i WON'T BE ABLE TO GET ANYBODY ELSE TO MAKE ESTAMATES UNTIL I HAVE A PRICE FORMULA IN PLACE .CAN ANYBODY POST SOME IDEALS FOR A NEW BUSINESS MATRIX USING NAPA?