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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?

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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.

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  • 2 weeks later...

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?

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      It always amazes me when I hear about a technician who quits one repair shop to go work at another shop for less money. I know you have heard of this too, and you’ve probably asked yourself, “Can this be true? And Why?” The answer rests within the culture of the company. More specifically, the boss, manager, or a toxic work environment literally pushed the technician out the door.
      While money and benefits tend to attract people to a company, it won’t keep them there. When a technician begins to look over the fence for greener grass, that is usually a sign that something is wrong within the workplace. It also means that his or her heart is probably already gone. If the issue is not resolved, no amount of money will keep that technician for the long term. The heart is always the first to leave. The last thing that leaves is the technician’s toolbox.
      Shop owners: Focus more on employee retention than acquisition. This is not to say that you should not be constantly recruiting. You should. What it does means is that once you hire someone, your job isn’t over, that’s when it begins. Get to know your technicians. Build strong relationships. Have frequent one-on-ones. Engage in meaningful conversation. Find what truly motivates your technicians. You may be surprised that while money is a motivator, it’s usually not the prime motivator.
      One last thing; the cost of technician turnover can be financially devastating. It also affects shop morale. Do all you can to create a workplace where technicians feel they are respected, recognized, and know that their work contributes to the overall success of the company. This will lead to improved morale and team spirit. Remember, when you see a technician’s toolbox rolling out of the bay on its way to another shop, the heart was most likely gone long before that.
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