Quantcast
Jump to content

Suply chain, price points and woes of the Interwebs


  

1 member has voted

You do not have permission to vote in this poll, or see the poll results. Please sign in or register to vote in this poll.

Recommended Posts

The growth of the Internet has changed the way many places do business and has certainly effected the automotive service industry as well. Much of Internet technology is good, allows information to be readily available, streamlines information and workflow. Before I came back to automotive service I spent 10 years working in web based software development, so I think all of this is a good thing. What I don't like is the business model that most automotive parts manufacturers have adopted. If I simply google most part numbers I get from local suppliers I can get them cheaper online through places like Amazon and Rockauto. There are a few serious offenders like Gates, Standard Motor, Dorman ect. Most times I can find these products significantly cheaper in terms of my cost than my stocking suppliers. Now here is the issue, I don't think that my price is to high, I think the Internet price is to low. I understand that there is value added to a local supplier. Parts are in stock, there are operational and carrying costs, all which add value and cost to the local supplier. What I don't like is that large manufacturers don't support this segment of their customer base. There should be minimum retail pricing that the manufacturer allows which should be no less than the jobber price recommended by the manufacturer, it would be great if it were something like 10% over jobber. This would protect supply chain and the aftermarket service shops while still allowing the DIY to buy off the Internet. Its a hard sell at times when we're making slim margins on parts but the customer looks online, sees a price and thinks we're screwing them. Case in point, TCK271 Gates T-belt kit, cost me $144, list is $362, Amazon sells this for $92 shipped! I sell to the customer for $217, the lowest I can go without slitting my wrists.

 

How do you deal with this problem, how often do you run into it?

Link to comment
Share on other sites










The way I handle it is to not install a customer provided part. In the end you are responsible for the part regardless. say no warranty if it comes down to it in a court you are indeed liable. Weed out the bottomfeeders and thrive. fyi I will put on ppls wipers or install there bulbs but at no cost but brake pads, timing belts or anything else nope.

Link to comment
Share on other sites

The way I handle it is to not install a customer provided part. In the end you are responsible for the part regardless. say no warranty if it comes down to it in a court you are indeed liable. Weed out the bottomfeeders and thrive. fyi I will put on ppls wipers or install there bulbs but at no cost but brake pads, timing belts or anything else nope.

 

You are right, I don't remember where but I was reading just recently that regardless of your statement and the customer's acceptance that there is no warranty, any court will hold you to an "implied warranty." Basically according to the article it comes down to you charged the customer to XXX. The customer paid you to do XXX. The customer is entitled to "fair value" of XXX. Now as I read it that only applies to your workmanship and when yo install their part you are accepting it as viable and that becomes part of your workmanship as it is your professional assessment that the part is proper. Now in Michigan we do not have to provide a warranty and if we do it must be in writing on the work order in order for it to be enforceable. But this does not absolve a shop of responsibility to a customer to provide fair value in that if you installed a water pump and it leaked on the hoist then you have to do it again at no charge. If it starts leaking three months later, well then it's their baby and they get to hassle with the part supplier, unless you screwed up and didn't tighten a hose clamp, clean the gasket surface right or such.

.

IF I install customer supplied parts I have it on the work order and they initial by it that I only warrant my labor for the initial installation was done properly and according to the vehicle manufacturer's guidelines. The statement also spells out, in no uncertain terms that if the part fails after they leave the shop that there is no warranty expressed or implied regarding the part and associated labor to replace the part should it prove defective in the future. It probably would not stand up in court, but at least the judge should see that the customer knew and understood that they were accepting the risk of a faulty part. Typically I charge a higher labor rate and that drives these people away. I have however secured a few good customers by accepting their customer supplied part job when they thought they could do it but then decided it was wiser to have someone else do it. I respect people who want to do it themselves for the satisfaction, especially when they identify their limitations and stop before they make a bigger problem. The ones I have zero respect for are the one who want to get the part themselves because it's cheaper. Even had one guy ask me, "Well I'm gonna get it at NAPA, same place you do so why can't I get it and have you install it and save some money?" I told him I would be delighted to install his part, but the labor would be $ZZZ instead of $XXX. He decided he didn't like my attitude. He didn't like my attitude that I am in business to serve people who value my services, professionalism, integrity, dedication and expertise. People who value me enough to trust me to select the right parts, do the job the right way, and charge the right price for the quality and so I will still be in business next year when they need more service. Yep he didn't like my attitude. Fine, I didn't like his "You're charging me too much because I can screw it up cheaper than if you do it right" attitude either.

Link to comment
Share on other sites

My issue here is not the customer bringing parts to me. We deal with that in a different way, I usually simply ask them if they would bring eggs to a diner. The issue at hand is one of customer perspective. If a customer leaves and googles parts on their bill, or is just interested and has done so before hand and see that the price I charge them is 2 or three times what they can buy it for online, they believe that I must have gotten a better price than the online price, since I'm in the industry. They then think that I screwed them. That is the problem.

Link to comment
Share on other sites

Exactly of course a steak is cheaper at the store then the resturaunt but you cannot bring your owm. Im the same way you cant bring your own. Im nice in the way i present it ususally but I refuse to do it. Its the way I choose to do it. Is it correct? Its all a matter of opinion. Same with giving quotes over the phone I refuse to do it cause I know I cannot give an accurate $ I may give a ball park but I am not going to low ball it get it in tear it down and call with 1k more needed. After a while we have weeded out the bottom feeders and its allowed me to give better service to the better customers. When times were slow we were not and I am happy about that.

Link to comment
Share on other sites

  • 2 weeks later...

This problem has become bigger for us in San Diego. We get it regularly. The only real way I see to solve this issue is Labor rates have to increase to compensate for the loss of profit. My parts profit has gone down 5% over the past two - three years because of this (and with the parts companies increasing their costs.) I really feel like the parts companies aren't thinking ahead with their philosophy and if many auto repair shops go out of business they are going to take a hit, although their have been many parts companies that have gone out of business already.

 

I think the smart shop owners will do what they have to in order to survive and labor rates will increase naturally as a result, as our parts profits decrease. It's harder for a customer to justify labor rate than it is for them to justify why your part you sold them is $90 less online, same brand. etc. This is how plumbers, electricians, and others get away with charging more per hour than many of us do. I have been slowly ratcheting up my labor rate with very little squawking. However, raise your parts prices to your customers and watch the complaints start.

Link to comment
Share on other sites

Now matter how you slice it and dice it at the end of the month we need to be profitable. Next time somebody complains about part prices I'm going to try moving the part profit over to labor and see what happens.

Link to comment
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
  • Have you checked out Joe's Latest Blog?

         5 comments
      I recently spoke with a friend of mine who owns a large general repair shop in the Midwest. His father founded the business in 1975. He was telling me that although he’s busy, he’s also very frustrated. When I probed him more about his frustrations, he said that it’s hard to find qualified technicians. My friend employs four technicians and is looking to hire two more. I then asked him, “How long does a technician last working for you.” He looked puzzled and replied, “I never really thought about that, but I can tell that except for one tech, most technicians don’t last working for me longer than a few years.”
      Judging from personal experience as a shop owner and from what I know about the auto repair industry, I can tell you that other than a few exceptions, the turnover rate for technicians in our industry is too high. This makes me think, do we have a technician shortage or a retention problem? Have we done the best we can over the decades to provide great pay plans, benefits packages, great work environments, and the right culture to ensure that the techs we have stay with us?
      Finding and hiring qualified automotive technicians is not a new phenomenon. This problem has been around for as long as I can remember. While we do need to attract people to our industry and provide the necessary training and mentorship, we also need to focus on retention. Having a revolving door and needing to hire techs every few years or so costs your company money. Big money! And that revolving door may be a sign of an even bigger issue: poor leadership, and poor employee management skills.
      Here’s one more thing to consider, for the most part, technicians don’t leave one job to start a new career, they leave one shop as a technician to become a technician at another shop. The reasons why they leave can be debated, but there is one fact that we cannot deny, people don’t quit the company they work for, they usually leave because of the boss or manager they work for.
      Put yourselves in the shoes of your employees. Do you have a workplace that communicates, “We appreciate you and want you to stay!”
  • Similar Topics

    • By carmcapriotto
      In this week’s episode, Hunt gets into the financial intricacies faced by auto repair shop owners, from refinancing debts and selling shops to securing new mortgages in today’s unpredictable market. He explores the strategies and tips to steer through the banking hurdles and optimize your financial operations.
      • Market Update & Interest Rates: Starting with a quick market update, Hunt discusses the current state of interest rates and how they're affecting both personal and commercial loans. Despite the unchanged rates by the Federal Reserve, the historical highs are impacting mortgage affordability and commercial borrowing costs.
      • Loan Acquisition Challenges: The episode sheds light on the complexities of acquiring loans in the current financial climate. Hunt discusses the often opaque criteria banks use to approve loans, offering some tips for what shop owners can do to increase their chances of securing financing.
      • Listener Q&A and Acknowledgments: A special thanks to listeners for their engaging questions in the previous mailbox episode. Your curiosity fuels our content, and we’re here to address your concerns, guiding you toward informed financial decisions for your auto repair shop.
      • Rapid Fire Tips for Financial Management: Closing the episode, Hunt offers some rapid-fire advice for managing your finances better, from understanding the nuances of loan interest rates to practical tips for ensuring your business stays liquid and prepared for any financial challenges ahead.
      Thanks to our partners, NAPA TRACS and Promotive
      Did you know that NAPA TRACS has onsite training plus six days a week support?
      It all starts when a local representative meets with you to learn about your business and how you run it.  After all, it's your shop, so it's your choice.
      Let us prove to you that Tracs is the single best shop management system in the business.  Find NAPA TRACS on the Web at NAPATRACS.com
      It’s time to hire a superstar for your business; what a grind you have in front of you. Great news, you don’t have to go it alone. Introducing Promotive, a full-service staffing solution for your shop. Promotive has over 40 years of recruiting and automotive experience. If you need qualified technicians and service advisors and want to offload the heavy lifting, visit www.gopromotive.com.
      Paar Melis and Associates – Accountants Specializing in Automotive Repair
      Visit us Online: www.paarmelis.com
      Email Hunt: [email protected]
      Get a copy of my Book: Download Here
      Aftermarket Radio Network
      Click to go to the Podcast on Remarkable Results Radio
    • By carmcapriotto
      Thanks to our Partner, NAPA TRACS and AutoFix Auto Shop Coaching A deep dive into the SWOT analysis of our industry with a panel of shop owners.  As we navigate the evolving automotive landscape, it's crucial to turn threats into opportunities, revving up for success. Andy Fiffick, CEO Rad Air, 10-locations, franchise. Listen to Andy’s other episodes HERE Greg Bunch, Aspen Auto Clinic, Transformers Institute. Listen to Greg’s previous episodes HERE. Brian Sump, Avalon Motor Sports, and Urban Auto Care, CO. Brian’s previous episodes HERE
      Watch Full Video Episode The Concept of Mastermind (00:01:58) Discussion on the concept of mastermind, its origins, and its application in the automotive industry. The Role of Independent Repair Shops (00:02:47) The nimbleness and expertise of independent repair shops compared to dealership networks, and the need for better public perception. Challenges of Independent Repair Shops (00:04:49) The weaknesses and challenges faced by independent repair shops, including the lack of unified marketing efforts and lobbying. Perception and Marketing of the Industry (00:09:16) The need for greater respect and recognition for the automotive aftermarket industry, and the importance of effective marketing strategies. Courage and Self-Respect (00:12:36) The courage and self-respect required to succeed in the automotive industry, along with the need for transformation in mindset. Advancements in the Industry (00:14:35) The industry's progress and advancements, challenges faced by smaller independent shops, and the industry's value and fragmentation. Image and Perception of Independent Shops (00:16:25) The importance of image, modernization, and professionalism in independent repair shops to build trust and attract customers. Training Engagement (00:17:15) Discussion on the importance of owners engaging in training with employees and setting an example. Shop Management System (00:17:49) Importance of a shop management system for profitability and efficiency, and the support and training offered by NAPA TRACS. Auto Shop Coaching (00:18:00) The benefits of Auto Shop Coaching in redefining success and efficiency within a shop, and the importance of accountability. Owners' Involvement in Training (00:21:03) The importance of owners attending training classes and being involved in the learning process to understand and support their employees. Challenges in Attracting Talent (00:23:36) Discussion on the challenges of attracting and retaining young talent in the automotive industry. Opportunities in Change (00:28:07) The positive aspects of change, embracing new technology, and being first to market with innovative equipment. Industry Opportunities (00:29:58) Discussion on the opportunities for growth and impact in the automotive industry, despite challenges and competition. Rising to the Opportunity (00:30:47) Embracing the opportunity to make a significant impact in the industry through creativity, thought, and effort. Car Count and Economy (00:33:37) Discussion on the impact of car count and the economy on the automotive industry. Challenges with Car Maintenance (00:34:16) Issues with consumer awareness of car maintenance, including oil changes and service intervals. Barrier to Entry (00:35:29) The increasing barrier to entry for new shop owners due to technological advancements and specialized skills required. Consolidation and Opportunities (00:38:26) Opportunities for family-owned and independent operations amidst market consolidation and private equity involvement. Threats and Strategic Thinking (00:43:22) Discussion on threats such as constant change, aging technicians, and government involvement, and the need for strategic thinking. Future of the Automotive Industry (00:46:52) Optimistic outlook on the future of the industry, including the potential for strong independent shop operators to thrive. Mental Resilience and Rising Costs (00:48:31) The importance of mental resilience and adapting to rising costs as a key factor in the industry's success.
      Thanks to our Partner, NAPA TRACS NAPA TRACS will move your shop into the SMS fast lane with onsite training and six days a week of support and local representation. Find NAPA TRACS on the Web at http://napatracs.com/ Thanks to our Partner, Auto-Fix Auto Shop Coaching Proven Auto Shop Coaching with Results. Over 61 Million in ROI with an Average ROI of 9x. Find Coach Chris Cotton at AutoFix Auto Shop Coaching on the Web at https://autoshopcoaching.com/ Connect with the Podcast: -Follow on Facebook: https://www.facebook.com/RemarkableResultsRadioPodcast/ -Join Our Private Facebook Community: https://www.facebook.com/groups/1734687266778976 -Subscribe on YouTube: https://www.youtube.com/carmcapriotto -Follow on LinkedIn: https://www.linkedin.com/in/carmcapriotto/ -Follow on Instagram: https://www.instagram.com/remarkableresultsradiopodcast/ -Follow on Twitter: https://twitter.com/RResultsBiz -Visit the Website: https://remarkableresults.biz/ -Join our Insider List: https://remarkableresults.biz/insider -All books mentioned on our podcasts: https://remarkableresults.biz/books -Our Classroom page for personal or team learning: https://remarkableresults.biz/classroom -Buy Me a Coffee: https://www.buymeacoffee.com/carm -The Aftermarket Radio Network: https://aftermarketradionetwork.com -Special episode collections: https://remarkableresults.biz/collections        
      Click to go to the Podcast on Remarkable Results Radio
    • By Changing The Industry
      Episode 159 - Facing Harsh Climates, Staff Dynamics, and Industry Changes With Kory Rozema
    • By Joe Marconi

      Premium Member Content 

      This content is hidden to guests, one of the benefits of a paid membership. Please login or register to view this content.

    • By carmcapriotto
      Thanks to our Partner, NAPA Auto Care Recorded Live at Vision Hi-Tech Training & Expo, Jeremy O'Neal shares his journey of transforming a struggling business into a thriving enterprise, emphasizing the critical role of service advisor training.  Jeremy also highlighted how understanding the business, the owner's goals, and team dynamics is essential before implementing any training program. It's not just about fixing cars; it's about creating an exceptional customer experience that drives business success. Jeremy O’Neal, Advisorfix, Freedom Auto Repair, Hesperia, CA. Previous episodes HERE. Show Notes
      Service Advisor Coaching & Training: https://www.advisorfix.com/ Jeremy's Transition to Shop Ownership (00:00:36) Jeremy discusses his transition from service advisor training to owning Freedom Automotive. The Impact of Vision 2024 (00:04:17) Jeremy and Carm discuss the impact of the Vision 2024 event on their lives and the industry. Youth Presence at Vision 2024 (00:04:48) Carm and Jeremy discuss the significant presence of young talent at the Vision 2024 event. Jeremy's Business Growth (00:06:56) Carm inquires about the growth of Jeremy's business over the past eight years. The Importance of Service Advisor Training (00:07:11) Carm and Jeremy discuss the critical need for service advisor training in the automotive industry. Jeremy's Business Transformation (00:08:55) Jeremy shares the transformation of his shop, including significant growth and plans for expansion. The Role of Service Advisors in Business Growth (00:09:29) Jeremy discusses the potential for business growth by adding service advisors and technicians. Customer Service Challenges (00:10:45) Jeremy and Carm discuss the decline in customer service and the impact on the automotive industry. The Role of Customer Experience (00:12:21) Carm emphasizes the importance of creating a great customer experience in automotive repair shops. Parenting and Cultural Observations (00:13:24) Jeremy shares his observations and concerns about modern parenting and societal changes. Firing underperforming staff (00:15:20) Jeremy discusses his commitment to high service standards and the consequences for those who don't meet them. Training and standards (00:16:07) Carm questions Jeremy about his work-life balance and the importance of training in maintaining high standards. NAPA Auto Care Center program (00:16:55) Carm discusses the benefits of the NAPA brand and the Pro Image upgrade program for automotive shops. Employee commitment and performance (00:19:00) Jeremy shares his experiences with committed but underperforming employees and the impact on customer service. Service advisor training and culture (00:21:20) Jeremy emphasizes the importance of daily coaching and the shop owner's role in guiding training and culture. Continuous improvement and learning culture (00:23:03) Jeremy discusses the importance of employees having a learning culture and the availability of educational content. Phone call analysis and customer service (00:24:22) Jeremy explains the value of listening to service advisor calls for assessing competency and customer responses. Service advisor's impact on top-line sales (00:26:26) Jeremy highlights the significant impact of service advisor competency on the shop's top-line sales. Life Cycles with Customers (00:30:57) Jeremy shares a personal anecdote about a customer's car and the importance of understanding customer needs. Building Trust with Customers (00:31:35) Jeremy discusses the importance of building trust with customers and ensuring they follow the shop's process for repairs. Market Trends and Automotive Industry (00:32:52) Jeremy talks about market trends, the impact of COVID-19, and the future of the automotive industry, including the rise of EVs and hybrid vehicles. Success in the Marketplace (00:34:19) The discussion revolves around the importance of solid processes, good people, and effective marketing to succeed in the marketplace. Communication and Networking (00:35:18) The conversation shifts to the significance of communication and networking, including a mention of the Disney Institute's emphasis on personal interaction. Reflecting on Life's Milestones (00:37:21) Jeremy reflects on life beyond 50, the legacy he aims to leave, and the importance of capturing special moments with loved ones.
      Thanks to our Partner, NAPA Auto Care Learn more about NAPA Auto Care and the benefits of being part of the NAPA family by visiting https://www.napaonline.com/en/auto-care Connect with the Podcast: -Follow on Facebook: https://www.facebook.com/RemarkableResultsRadioPodcast/ -Join Our Private Facebook Community: https://www.facebook.com/groups/1734687266778976 -Subscribe on YouTube: https://www.youtube.com/carmcapriotto -Follow on LinkedIn: https://www.linkedin.com/in/carmcapriotto/ -Follow on Instagram: https://www.instagram.com/remarkableresultsradiopodcast/ -Follow on Twitter: https://twitter.com/RResultsBiz -Visit the Website: https://remarkableresults.biz/ -Join our Insider List: https://remarkableresults.biz/insider -All books mentioned on our podcasts: https://remarkableresults.biz/books -Our Classroom page for personal or team learning: https://remarkableresults.biz/classroom -Buy Me a Coffee: https://www.buymeacoffee.com/carm -The Aftermarket Radio Network: https://aftermarketradionetwork.com -Special episode collections: https://remarkableresults.biz/collections    
      Click to go to the Podcast on Remarkable Results Radio


  • Our Sponsors



×
×
  • Create New...