U.S. Sets Dumping Margins on Chinese R134 Freon
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By Joe Marconi in Joe's BlogMost shop owners would agree that the independent auto repair industry has been too cheap for too long regarding its pricing and labor rates. However, can we keep raising our labor rates and prices until we achieve the profit we desire and need? Is it that simple?
The first step in achieving your required gross and net profit is understanding your numbers and establishing the correct labor and part margins. The next step is to find your business's inefficiencies that impact high production levels.
Here are a few things to consider. First, do you have the workflow processes in place that is conducive to high production? What about your shop layout? Do you have all the right tools and equipment? Do you have a continuous training program in place? Are technicians waiting to use a particular scanner or waiting to access information from the shop's workstation computer?
And lastly, are all the estimates written correctly? Is the labor correct for each job? Are you allowing extra time for rust, older vehicles, labor jobs with no parts included, and the fact that many published labor times are wrong? Let's not forget that perhaps the most significant labor loss is not charging enough labor time for testing, electrical work, and other complicated repairs.
Once you have determined the correct labor rate and pricing, review your entire operation. Then, tighten up on all those labor leaks and inefficiencies. Improving production and paying close attention to the labor on each job will add much-needed dollars to your bottom line.
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By Joe Marconi
As we close out 2022, it's time to reflect on the past year. Review your accomplishments, the state of your business, your personal life, and things that could have gone better. The key thing to remember is that it's better to have a plan and goals instead of trying to fly blind.
Establish your goals for 2023 and beyond. Include family time too, and time for yourself. It's not all about business. Having the right balance will actually make your business more successful.
Speak with your employees too. Find out from them what went wrong, what went right, and what they would like to see in the coming year. While you can't always act on what your employees want, getting their perspective will not only help you create the plan moving forward, it will help to build morale, a win/win for all.
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By carmcapriotto
Keith Perkins, L1 Automotive Diagnostics and Program, L1 Automotive Training, Listen to Keith’s previous episode HERE. This is Isaac Rodell's first appearance on Remarkable Results Radio. Find Isaac on Facebook "Isaac Rodiesel" Talking Points:
The struggle to improve the transfer of technical knowledge is the same people show up to training every seminar. Yet there are a few new faces but not enough to make a larger impact on the need and value of training. How do we connect with people who do not seek out training on their own Paying for training, room, board, and time off needs to be the standard in the industry When Issac owned his shop, he made the same mistake that so many shop owners today are making and not supporting 100% of his technician's training requirements (registration, room, board, and making their pay whole) Only shop owners who attend training can see the value. Once they attend, they are all over it and turn their training commitment into a pillar of their company Training pays it does not cost There are many deals available for equipment for pennies on the dollar from shops that are liquidating. This a sign of the times when shop owners hesitate to become a business person The first hybrid in the US was Honda Insight in 1999 Many of our young trainers have never set a carburetor Job security to work on ICE (Internal Combustion Engines) for many, many years to come as the age of the car grows by about 6 months per year and we currently are at 12.9 yrs Buy a used 2005-2009 Toyota Prius to work on, to use as a training vehicle, and to wrap with the wording ‘We Service Hybrids.’ There is a worst-case scenario from Toyota about placing the keys about 20’ from the car when doing an oil change. Verify the car is off when doing an oil change on the IC Engine Issac and Keith are in the Mobile Diag. The dynamic of the job is changing because many shops are tooling up, and there is more competition than ever Big pivot to remote programming Issac encourages the young generation to go to training and will sponsor someone each year to go to ASTE If senior members of a shop avoid going to training, invest in your young people. 20% of technicians are 55 -64 average age from a survey. Astonishing number In high school, 90% of men worked on their cars back in the day when there was shop class Today very few high schools have shop classes and must send their students to a co-op center Reference Bob Cooper Episodes with consumer panel HERE Kieth and Issac are not fans of Flat Rate. When a technician returns from training within 2 weeks, be sure he/she teaches a short class of the training they had. Practice what you learn and teach what you learn When you teach, you learn Fight the 30-day forgetting curve Crispy Cream Waffle Video HERE Issac has been making laptops for OE programming since 2014
Connect with the Podcast: Aftermarket Radio Network Subscribe on YouTube Visit us on the Web Follow on Facebook Become an Insider Buy me a coffee Important Books Check out today's partners: Set your sights on Las Vegas in 2023. Mark your calendar now … October 31 - Nov 2, 2023, AAPEX - Now more than ever. And don’t miss the next free AAPEX webinar. Register now at AAPEXSHOW.COM Shop-Ware: More Time. More Profit. Shop-Ware Shop Management getshopware.com
Click to go to the Podcast on Remarkable Results Radio
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By carmcapriotto
Guest host and shop tour with Jon Kloosterman, Director of Operations, Westside Service, Zeeland, MI. Jon discusses his 2 year apprentice program and the importance of hiring employees that will fit into their team culture. Jon Kloosterman, Director of Operations, Westside Service, Zeeland, MI. Jon’s previous episodes HERE
Key Talking Points
5 shops, 4 locations 2 year apprentice program- cater to your own organization, tool funds, match with master technician, and given time frame to complete certifications. Challenge- fitting the business culture Finding apprentices through high schools- Jon is on board for local high school. Original location- expanded to 7 bays “Goals Set, Goals Accomplished” - team goals lead to team events
Connect with the Podcast:
Aftermarket Radio Network
Subscribe on YouTube
Visit us on the Web
Follow on Facebook
Become an Insider
Buy me a coffee
Important Books
Check out today's partner:
Dorman gives people greater freedom to fix vehicles by constantly developing new repair solutions that put owners and technicians first. Take the Dorman Virtual Tour at www.DormanProducts.com/Tour
Click to go to the Podcast on Remarkable Results Radio
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By Joe Marconi
Last week, I had an interesting conversation with a shop owner friend of mine. He told me that he does not mark up his parts as much as he once did, mainly because of pushback from customers. He states that Google, Amazon, Rock Auto, and others, have hurt that part of the business.
I don't want to debate that fact right now, but what I told him is that It doesn't matter how you arrive at your required profit, but you need to maintain profits.
If you concede on your part margin, then the only way to maintain your required Gross and Net Profit is to increase your labor rate.
Your thoughts and opinions? I would like to know what other shops are doing with part margins these days.
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By Joe Marconi
SOURCE: Tire Review Magazine:
Auto shoppers in America are more likely than ever before to consider buying a fully electric vehicle, and new EV entries are responsible for much of the added consideration. These new entries, many from long-established vehicle manufacturers, are turning EV skeptics into likely EV considerers, according to the J.D. Power 2022 U.S. Electric Vehicle Consideration Study.
The percentage of shoppers who say they are “very likely” to consider an EV for their next purchase or lease climbs to 24%, four percentage points higher than a year ago, the study says. Several factors are at work in promoting the increase, but the introduction of new electric models—some of which are in an important and largely untapped segment such as pickup trucks—is a primary reason for the increased consumer interest. One hurdle to EV adoption revolves around shoppers’ living and working situations. There is a substantially higher ratio of shoppers who own their home who say they are “very likely to consider” an EV (27%) than those who rent (17%). Not only are homeowners more affluent, on average, but are more likely to be able to charge an EV at their residence. Perhaps most tellingly, 34% of those who indicate they are unlikely to consider purchasing an EV say they lack access to any charging capabilities at home or work.
The study, now in its second year, finds that the more vehicle owners drive, the more they are likely to consider an EV. While daily commuters who are encountering higher fuel prices are logical candidates to switch to EVs, those who take frequent vacations and road trips might be assumed to be less likely to adopt EVs. But, like heavy commuters, heavy road-trippers have a higher EV purchase consideration tendency than those who use their vehicles less often for this purpose. It could be an indication that frequent drivers are increasingly seeing the advantages of EVs compared with their gasoline-powered counterparts.
Still, as the number of EV models proliferates, auto manufacturers must seek to convert the large percentage of EV shoppers who say they are “somewhat likely” to consider into actual customers. The study points out a key opportunity to accomplish that: expose EVs to those shoppers who have never driven, ridden in or even sat in such a vehicle.
Echoing last year’s findings, the 2022 study reveals that firsthand experience with EVs plays an important role in purchase consideration. Only 11% of study respondents who had no personal experience at all with EVs say they are “very likely” to consider an EV. That percentage more than doubles to 24% among those new-vehicle shoppers who have simply been a passenger in an EV and rises to 34% among those who have driven an EV. Owners of EVs are also sold on the technology, as 48% of owners say they are “very likely” to consider another EV for their next vehicle purchase.
Following are key findings of the 2022 study:
EV consideration stronger among premium buyers: Since purchase price continues to play a prominent role in the vehicle purchase process, and because EVs often have higher price tags than their gas-powered counterparts, it is not unexpected that EVs are finding more favor among premium buyers than mass-market buyers. Some 37% of premium vehicle owners indicate they are “very likely” to consider an EV for their next purchase vs. just 21% among those who currently own mass-market vehicles. EV consideration by owners of mass-market vehicles on the rise: Though premium vehicle owners remain more likely to consider EVs than owners of mass-market vehicles, the owners of mass-market vehicles increasingly register an interest in buying an EV. The year-over-year increase in those who say they are “very likely” to consider an EV is up to six percentage points among owners of mass-market vehicles and up one percentage point among owners of premium vehicles. This suggests some owners of mass-market vehicles are receptive to more affordable EVs. More information engenders more consideration: The study reinforces findings from a year ago that a lack of information about EVs is a key factor in shoppers’ rejection of them. Nearly one-third (30%) of rejecters cite a lack of information as a reason for their lack of consideration. Because firsthand experience with EV technology is still not entirely commonplace, shoppers need to be better informed about the ownership experience they offer. EV consideration by geographic location: It is not unexpected that new-vehicle shoppers in the West region show the highest proclivity for EV purchase. Some 31% of those in the West say they are “very likely” to consider an EV. Surprisingly, the South (26%) tops the Northeast (22%) among those who say they are “very likely” to consider an EV. The North Central is at 22%. Legacy automakers turn in strong showing: Owners of numerous mass market brands express an increased interest in EVs from a year ago. At the same time, owners of several premium brands, including Tesla, express somewhat less interest in making their next vehicle an EV. “Tesla remains a dominant player, but new-vehicle shoppers are proving quite willing to consider EVs from legacy brands,” Stropp said. The U.S. Electric Vehicle Consideration Study is used to gauge EV shopper consideration. Study content includes overall EV consideration by geography; demographics; vehicle experience and use; lifestyle; and psychographics, the company says. It also includes model-level consideration details such as cross-shopping and “why buy” findings and an analysis of reasons for EV rejection. The study measured responses from 10,030 consumers and was fielded from February through April 2022.
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