tyrguy

Sorry about the double post but I wanted to fix a few spelling errors and I couldn't find the edit button on my first post. The industry has been recommending best on the rear for probably 15 years or more. If a customer requests otherwise we will do it with a big disclaimer on the invoice. Plus, I keep a lot of articles under the counter from Road and Track, etc that stress the point. I did a track day in Texas with Continental where they had us go thru water in a turn with 1/2 worn tires on the front and then the back. With the 1/2 worn tires on the front you would feel the car start to understeer causing you to get off the throttle, this would cause a weight transfer to the front helping you regain control. With the half worn tires on the rear, the car would go into oversteer causing you to get off the throttle, which would transfer weight to the front making the oversteer worse and causing a spin. This happened to everybody even though they knew to expect it. Understeer is much safer for the average driver than oversteer. That's why car manufacturers build understeer in most cars. Also why most oval track race cars dial a bit of understeer in.

Every tire we sell includes lifetime rotations, re-balancing, flat repair and road hazard in the price. We will match any competitor's price as long as they are offering the same package. Usually by the time they add their lifetime services in, we are't that far off. Even with Tire Rack who doesn't offer the free rotations and re-balancing. Speaking of Tire Rack, online retailers are going to take a big hit this summer when the SCOTUS rules on sales tax.

I would double check that. I believe that the confusion is it used to be true that you couldn't charge more for credit card use, so giving a discount for cash would seem to do exactly that. But at that time it was how it was presented. If your "stated" price was a cash discount price and you charged more for credit cards, that indeed was illegal. But if your stated price was for any type payment you could indeed discount it for cash. However, the laws have pretty much changed so that you can now have a stated price and charge more for credit card use so that is a mute point. I don't believe cash discounts are illegal anywhere. And if they were, how could they prove what the discount is for?

If you read my post closer, you'll see that those productivity numbers were in a galaxy a long time ago and far far away. We haven't seen numbers above 90% since 2011. Last year we ended at 82.73%, 3483.83 billed versus 4211.0 worked. However, that's with just 2 techs versus 3 techs previously so our actual hours billed are down 2300+ from 2011 when we billed 5842/6331 or 92.27%. I'd be interested to hear what productivity numbers others are running. Straight calculation, hours billed/hours worked. We will finish the 1st Quarter at about 76%, 830.0/1094.0. Anybody else?

39 years doing this and I have no idea what you are referring to?

Employees get cost on everything.

I don't agree with those numbers. Most shops I know doing 1.0M to 1.5M have at least 8 employees. We hit close to 1.5M a few years ago with 8 employess. Myself, 2 advisors, 3 techs, and 2 tire changers. Since the 5 car dealerships opened across the street we have declined to 1.1M with 7 employees when my first tech hired in '79 retired in '16. When we were doing the 1.5M my techs were billing over 95% of their hours so there wasn't much more capacity to gain. However, we have since raise our parts matrix and hourly rate but even with that our sales would only increase to 1.7M if we were still billing the hours we used to. When I read shop profiles in the trade mags it appears that any shop doing over 2M has 10-12+ employees. 4M would need at least 15- 20+.

So I talked to the insurance company today. They left it up to me. They said if you feel responsible we'll pay the claim. As much as I wanted to say that I didn't see how in the world it could fall off after 2k miles, I said I just couldn't see any other explanation other than vandalism which I doubted. So I guess they'll be paying for everything except the oil change on the used engine.

Going to handle it. Called my insurance agent and he said it's covered....maybe. If they deem it could indeed be our fault it's covered. If they say we aren't responsible they won't. So it's a catch 22. I'll be happy if they say there is no way it's our fault but then I take the hit. In that case it will really make me look like a hero. On the other hand, if they say it could be our fault and they cover us, it makes us look incompetent.

When it rains it pours. Has anybody ever had an oil filter fall off 2000 miles after an oil change? Yesterday a good customer's car was towed in. His daughter was driving it and she started to smell something "hot". She thought it was overheating so she pulled into another shop. They racked it and found the oil filter was gone and there was no oil left. They put a new filter on and filled with it oil but of course now there is a rod knock. My tech of 36 years just can't believe it could happen after 2k miles. I tend to believe him but I don't see any other option but to put an engine in it at no charge. Comments?

This happened this week. A customer had their vehicle towed in...cranks but no start. They didn't call in advance or leave a note. We just find this 09 Caliber in our lot, unlocked with the keys in the ignition. My service manager goes out to the car and opens the door to get the mileage and such. Unfortunately, the guy had a door hinge problem that would only allow the door to open partially. When my service manager opened the door fully, the front of the door and the back of the front fender had a disagreement. Damage done, our fault according to the customer. I told him to get an estimate and we'd work something out. Probably be covered by insurance less the deductible. Since the hinge will be repaired as well I'm debating making him pay something.

No real health issues but it's only 4 months.

Negotiate. They needed a windshield before it ever came to you and he admits that.. The guy was going to need to replace it anyway so have the job done for him and have him pay 1/2 the retail price. He should be pleased as punch about that.

I'm with ya Xrac, I turn 65 in April and I'm looking forward to Medicare. My insurance just took another jump of $100 to about $950/mo with a 4K deductible. I expect to see a decrease similiar to yours.

And one more thing as long as I'm on my rant. Consider this..... At an average of 38.94/unit versus $20/unit, I can sell half the units and make the same amount of profit. Lastly, Whenever I think that just maybe I'd sell more tires by lowering my price I do this calculation. Lets say I lower my retail price 10%. JUST 10%. In this case that's about $16. That means my profit per unit is now $22.94, a 41% decrease. That means my friends that I now have to sell 226 units instead of 133 units to make the same profit. That's 70% more units with just a 10% retail price decrease.

It always amazes me why guys use a parts matrix and get a hefty GP on parts but are willing to sell tires at cost or a few dollars above. If you are marking them up $20 as you say, which is indeed the price of a mount and balance, then you are selling them at cost. Why in the world would you do that? Hell. at least mark them up $30 so you are making $10 on the tire plus a mount and balance. As for putting internet tires on, you would make the same amount of money and not have to stand behind the product. Sounds great to me. Thru yesterday, we have sold 133 units this month, at an average profit of 38.94/unit. That's $155.76/set. That's a whole lot better than $80/set. And don't tell me it's because I don't have competition. I can throw a baseball from my bays into a Super Walmart's bays. Okay I'm exaggerating, it's probably 150 yards. And I also have an NTB 1/2 mile down the street. Lastly there is another strong independent 1.5 miles up town. Using my matrix that I have outlined on this forum, we can compete with anybody. I just tell the customer that we will meet anyone's price if the total package [lifetime tire services] is comparable, and we do. Sometimes we have to knock a few bucks off to compete but it's not much. The only thing that still grips my ass is that they won't level the sales tax field when competing on the internet. It's coming though and that will hit the Tire Racks of the world hard. Lastly, I never consider the back end manufacturer's money into my markup. That's mine, period.

That's not what he was referring to as "scam". He said " Everyone pays the same % for the bank /service charges and each card has different processing fees. What you pay over that is the scam ." So what he's really saying is every service passes the same bank costs along and what you pay over that is their profit. Actually, not even net profit, just gross profit. He said nothing about contracts or fee creep. My comment was just that you always hear people refer to some industry's charges as a scam or ripoff when they have no idea of the costs of doing business in that industry. As we all know, it happens to us all the time.

Kind of funny how whenever someone talks about a industry they are not part of profit is referred to as a "scam".

Who says tires have to be a flat markup. Although we use a few tire matrixes for our program brands, they only vary by a few points. But here is a generic tire matrix we use. Cost 0-49.99 /63, 50-74.99 /66, 75-99.99 /69, 100-124.99 /73, 125-149.99 /74, 150-174.99 /76 and so on. Resulting retail prices include valves, mount, balance, alignment check, taxes, lifetime rotation, balancing, flat repair and road hazard. Obviously when quoting tires it's important to point out everything that's included. So, last week the average tire that went out of here had an average invoice cost of 97.89. We'd retail that tire for 141.95. Profit on a set of 4 would be 176.24. Now, we run sales every month where we give "instant counter rebates" of 40-60 off a set which might bring the profit per set down to 136.00-116.00.

We take checks all the time. If I hadn't looked, I would have said we take 3 or 4 NSF checks a year. But I just checked and we have taken only 1 in the last 4 years!! It seems like people just don't bounce checks as much as they used to. We do have a few restrictions though. Unless it's a customer we know, we don't take checks that are written on a bank out of our county. Secondly, we limit 1st time customers to $500. Thirdly, we don't take "starter" checks. Lastly, if it is a first time customer, we make a copy of the check and driver's license together and keep it until the check clears.

We include a RH with every tire we sell. It's included in our price. It's a straight proration from day 1 and continues until the tire is down to the last 2/32s. Besides the prorated price the customer pays for mounting and balancing. We also offer an optional Tire Pros warranty for $4.95 a tire that is nationwide and no proration for the first year.

Been with retriever just a little over a year. First few months were great, with a net after all fees at 1.43 to 1.65. However starting this summer we have started to see fee creep. Last 4 months were 1.59, 1.65, 1.74, 1.96. I called Jason last week and he said that I'm probably doing more AMEX. I told him no, we haven't been processing any AMEX. He seemed puzzled and said he'd check it out and have an answer by the 17th. We'll see but apparently other Tire Pros dealers have noticed the same thing.

The problem with the free alignment check is that more and more we are finding that fewer vehicles need any adjustment. We have always offered a free alignment check with the purchase of tires. And as little as 10 years ago it was rare that the vehicle didn't need at least some adjustment. However, my latest audit showed that upwards of 1 out of 3 cars need nothing adjusted. So 33% of the time I'm paying my tech a half hour to do the free check. I suppose if you have one of those Hunter drive over alignment checking devices it might make sense to include the check with the LOF. However, I have my doubts about the accuracy of those units. We have sold tires and through the free check found vehicles needing aligned that the customer states was just checked by one of those systems and declared to be okay.

Except for oil change parts, we stick with the same parts matrix on ALL parts. On tires we use a matrix specifically design for tires. Parts matrix: 0-10 70%, 10.01-20 65%, 20.01-75 57%, 75.01-150 51%, 150.01-750 47%, 750-up 36%. Tire matrix: 0-49.99 39%, 50-74.99 36%, 75-99.99 33%, 100-124.99 29%, 125-149.99 28%, 150-174.99 26%, 175-199.99 25%, 200-224.99 23%, 225-249.99 22%, 250-274.99 21%, 275-299.99 20%, 300-up 19%. This markup includes installation and all future tire tire services.

Although I laid out my history of Saturday hours, I failed to give a conclusion stating my opinion on what is best. Would being open on Sat result in more sales? Absolutely. But there is a trade off. As I have stated in other forum topics, I haven't had to hire a tech in 23 years. Besides a generous pay and benefits plan I truly believe the reason for the longevity of employment I'm experiencing is due to giving the lads a full weekend away from the shop. Lastly, I dusted of the archives and looked back at our numbers from 1994 to 1995 when we made the switch. Our numbers went down 1.3%.