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ScottSpec last won the day on February 11

ScottSpec had the most liked content!

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About ScottSpec

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    Experienced Poster

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  • Business Address
    11804 Coakley Cir., Rockville, Maryland, 20852
  • Type of Business
    Auto Repair
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    Shop Owner
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  1. ScottSpec

    Customer's buying their own parts

    I recommend you talk to you insurance company, and your lawyer. There is nothing you can do to limit your liability. You are just as liable for a customer's part, as you are for a part you purchased and installed. I think you might also find it difficult to offer different warranties for the same part. These are not just my opinions, they have been tested in court. Scott
  2. ScottSpec

    Customer's buying their own parts

    Yes, customers will always find something to complain about, and the approach I am thinking about is not without its risks. In fact, what you just asked was the first thing my service manager said to me when we discussed it. We have been moving away from having a posted "labor rate" for a while. We have a "labor rate" that we use to calculate the labor for a given job, but we always present the the total labor for each job to the customer. This makes it a bit more difficult to make an easy comparison. I also find it much easier to address higher labor, then trying to get a customer to understand that my business model requires me to double the price of a part. Labor charges are very subjective, while parts prices are objective. Each of our shops is unique, no one else can offer exactly the same service, and the customer has no idea what it cost to produce the labor. You can easily differentiate yourself, and therefore justify a different labor rate. When a customer tells you he/she found the same OEM part online, for 1/2 the cost, there is nothing you can do to differentiate the part you are selling, from the part found online. You are now in a position where all you can do is try to get them to understand that you have to mark parts up to stay in business. A lot of customers do understand this, but each one has a different idea about what constitutes a reasonable markup, and what is excessive, leaving them feeling ripped off. Whenever I discuss this idea, I feel the need to add my disclaimer. While I do continue to like the possibilities of conducting my business this way, I still have not tried it in my shop. So, I do also have some serious reservations about it. Scott
  3. For about 20 years, I would get those money cards, and put $20's in some and $100's in others. I would give the mailman, UPS driver, FedEx driver, Parts drivers, etc. the $20's. The $100's would go the the main parts guys we ordered from. There was always a lot of appreciation. For me, the Auto Repair business had been less and less profitable over the last decade. I had to cut this practice from the budget as well as Christmas bonuses, a yearly company event, and a number of other expenses. I agree, if you can afford it, these gestures go along way toward building loyalty. Scott
  4. ScottSpec

    Customer's buying their own parts

    Newport5, I know your question was meant for someone else, but I thought I would throw in my comments. I think selling and advising are 2 very subjective terms. We are all always selling customers on ideas and beliefs. We sell customers everyday on why they should chose our shop over others, why they should trust us, the value of quality parts, and maybe why are prices are higher than the shop next door. We sell these ideas by the appearance of our shops, the certificates on our walls, our websites, our online presence, and our words. I think quite often when we think of "selling" automotive service and repairs, we think about the shop or dealership that is selling work needed or not to maintain their numbers. Quite often using "scare tactics" or bait and switch. In my shop we do thorough evaluations on just about every car that comes in. We report the findings, the recommendations, and the cost for those. We answer any questions the customer may have, take them into the shop so they can see what we are talking about if needed, then we ask them what they would like to do. I tell them our job is to give them the best assessment of their vehicle, and there job is to decide what they would like to do. I think this would be labeled "advising", but make no mistake about it, this is still selling. I'm not evaluating, estimating, educating, and advising so they can take the car somewhere else to have it serviced. I think the word "selling" has 2 very different meanings. When you sell a customer a service or repair that benefits them by extending the life of their vehicle, gets them back on the road, or corrects a safety issue, "selling" is a good thing. When you sell 10 fluid flushes everyday to meet a quota, brake rotors when only pads are needed to boost your average RO, or tell someone the car is unsafe to drive so they have to have work done at your shop, "selling" becomes ugly. Scott
  5. ScottSpec

    Customer's buying their own parts

    Ricardo, Try Volvo Repair Rockville, BMW Repair Rockville, Audi Repair Rockville, MINI Repair Rockville, or VW Repair Rockville. We'll come up on the first page for all of them. These are the vehicles we want in our shop. Having said that, I stopped chasing SEO a year ago. I found no measurable benefit to our business being on the first page. The direct mail has been most effective advertising for us, which is why I have committed such a large portion of our advertising budget to it. Before we started 3 years ago, I thought direct mail was dead. In the those 3 years, direct mail has generated $250,000 in sales. I guess it shows what works for some doesn't necessarily work for others, Scott
  6. ScottSpec

    Customer's buying their own parts

    Ricardo, I'm experiencing something a little different. Maybe it is because of my location or our size. We are just outside of Washington DC which is a fairly affluent area, and our sales were $830,000 last year. So newer cars may be populating our area at a earlier and faster rate. We have a strong web presence. Other shops are always calling me to find out how we are ranking so well. You wont find a single bad review of our shop. We have 6 showing reviews, and 26 hidden on Yelp, and they are all 5 star. We have 32 reviews on Google, 30 of them are 5 star. the other 2 are for another shop. We purchased their customer base, and Google merged the reviews. We have 33 reviews on RepairPal. 28 are 5 star. The other 5, are 4 or 4.5 star, and those were because we weren't in a convenient location for them, or we were not able to reproduce a problem, and were only able to offer them a possible solution. We spend $30-35,000 a year on direct mail, and for those to be effective, we have to offer an incentive that really hurts profitability the first time they come in. We email service reminders, follow up for reviews, and text with customers. The county I am in is the 4th richest in the country, with a population of over 1,000,000. I have a program where I will donate 10% of the invoice to a PTA when they directed a customer to us. I sent out emails for several years to all the PTA's I could find the addresses for. That yielded me 2 customers. A few years ago we spent $10,500 on a large billboard on a major road near our shop. It brought in 1 customer. We are RepairPal certified which sends us a few cars a month. We tried all the usual suspects like Groupon, Living Social, and a few I'm sure I'm forgetting. We even had a customer reward program for a few years. That was an expensive lesson. We have made a lot of changes to adapt to the changing landscape. We were a Volvo Specialist for the first 20 years. In 2010 it was clear that was no longer going to work. We started adding more and more makes. Now we will service any 4 wheel passenger vehicle. We added State Inspections, Tag and Title Service, and I even got my Notary. We added 6 Free Loaner cars. We started manufacturing some special tools, and through eBay we are selling them all over the world. We do software downloads for many of shops in the area, as well as diagnostic work when they are stuck. We provide a rebuilding service for the READ units on the Volvo, Jaguar, and Land Rovers. I did one for a guy in Africa a few weeks ago. In April of 2017 we bought the customer base of a European Specialist when he went bankrupt after years of declining sales. He was doing well over a million dollars a year for many years just a decade earlier. It increased our revenue about 15% for 2017, but we have been flat this year so far. It scares me to think about if we had not gotten that customer base. I'm pretty convinced that more, and or better advertising is not going to grow or even save my business. More and more I am experiencing the opposite of what Old and Tired is, and that probably has more to do with my dissatisfaction of this business than anything else. Customer's used to respect and value what we do. Now it is a commodity. I have labeled it the Amazon effect. They want immediate service, the best price, and if they are not happy with what they got, they want a refund. You are correct, the next generation of technicians will have to have computer and IT skills. Fortunately for me I have them, and it's why I will probably be out of here, and in the IT field in the next few years if my new product does not work out as I hope. The question will be, will individuals with those skills, go to work in the Auto Repair industry, or go to a Tech firm with guaranteed salaries, no requirement to invest thousands of dollars a year in tools, vacations, sick leave, 401k's, stock options, and room for growth. Maybe it's me. Maybe I am just old, tired, and after 30 years of this, ready for a change. Scott
  7. ScottSpec

    Customer's buying their own parts

    Ricardo, I don't think the industry will go away overnight. but if your sales drop a few % every year, which is what I am hearing from most of the shop owners I talk with, how long will it be before you are no longer profitable? I also replied to your private message. Scott
  8. ScottSpec

    Customer's buying their own parts

    Ricardo, Looking for ways to get out of this business, I created some shop management software about 5 years ago. It was the first web based system created. It never really caught on, so I closed it off to new users. There are still about 50 of us using it. I've put my business up for sale a few times with the plan of getting into IT. I've done some consulting, and I can make more money at home with a computer than I can with my shop, probably twice as much; without all the headaches. The shop does allow me more freedom though. I was committed to selling it at the end of last year, then I invented a new consumer product that has the potential to make me more money than my shop ever has. So I'm now using the business structure and assets to develop and market the product. If you are interested in see the product, you can check it out at https://www.tubeanew.com I hate sounding pessimistic, but the truth is that the automotive repair business is dying. It has been for many years. More reliable cars, longer service intervals, and cars by subscription. Most of the "gravy" work is going away, being replaced with more advanced diagnostic work, and repairs that require us to purchase subscriptions to download software every time a module is replaced. Quite often you have to update your own computer with the manufacture's latest software to do those downloads adding another hour or so to the job. You keep your fingers crossed that the download doesn't fail leaving you with a bricked module, and when their system doesn't work correctly, tech support is quite often lacking. I did a X3 a couple weeks ago using a pass through. After 5 days it was at 50% complete. Once I switched to the BMW ICOM, it was much faster, about 4 hours. However, even after that the system wanted a release code for the new rack that was installed. Even though it was BMW's system asking for the code, BMW support had no idea how to provide one, and said the system should have done it automatically. So it ended up having to go to the dealer for the code. We've had a couple of Tesla's in the shop recently. More and more cars will be EV's and HV's. In 2 years all Volvo's will be, and they are 60% of our business. EV's and HV's will never need brakes. The steering racks will never leak. EV's will never need oil changes, transmission flushes, power steering flushes, air filters, spark plugs etc. There will be no more engine, transmission, differential or fuel system repairs. What is your software product? Scott
  9. ScottSpec

    Customer's buying their own parts

    My official start was May 1, 1989, but we started doing work in April.
  10. ScottSpec

    Customer's buying their own parts

    I've thought about making the change many times. It sounds good on paper, but obviously I have not been able to convince myself to try it yet. It would be a radical change, but I am thinking more and more seriously about it. While it would eliminate some of the discussion with the customers about parts costs/markups, the more beneficial part to me is to be able to predict my costs and charge accordingly. I would not have to hope to sell a lot of parts. Scott
  11. ScottSpec

    Customer's buying their own parts

    Since 1989. It will be 30 years in May. Why do you ask? Scott
  12. ScottSpec

    Customer's buying their own parts

    Ricardo, I feel a little unpatriotic when I say this, but that number would actually increase our profit by about $13,000 because that amount would no longer be going to sales tax. I could even just start paying sales tax on everything I buy and stop having to collect and report it myself. Interesting conversation. Scott
  13. ScottSpec

    Customer's buying their own parts

    Ricardo, If we stopped worrying about parts margins, this business would be much easier to evaluate, predict, and make a profit. The current model, which most of us are still using, me included really leaves a lot to chance in this business. I could sit down in a few minutes and calculate how much each bay cost me, how much each tech cost me, and how many hours at what rate I need to charge to make sure I am profitable. While we use a standard markup, it is very difficult to know what dollar amount I am going to sell in parts. Think about this for a moment. You have an A tech that spends 6 hours removing a dash to replace a $80 blend door motor which also requires calibration with a scan tool that cost him a few thousand dollars, or as I like to say $200 a month. Next to him, you have a B tech who spends 6 hours replacing 6 sets of brake pads. The B tech generated the same amount of labor, but ~$400 more in parts, and probably makes half of what you paid the A tech. Is your business really doing better because you made sure you made your $40 on the blend door motor. If you sold the parts at cost, assuming you had a 50% margin, you would only need to raise your labor rate $20 to come out ahead. I just ran some numbers from last out of curiosity. If I raised my labor rate $55 and stopped marking up parts, I would be ahead of the game. We all talk about how important it is to charge for diagnostic time, and it is. However, it's the most cost intensive work we do, and since there are no parts sales to go along with it, it's also the lowest sales generator per hour. Scott
  14. ScottSpec

    Customer's buying their own parts

    CAR, What are your suggestions? I have long considered just selling parts at my cost and adjusting my labor, or some other fee to compensate. I've suggested it here on AutoShopOwner before. It would reduce work load, eliminate a more and more harmful data point for customers to judge our pricing, and eliminate the need to explain to customer's why we need a margin on parts. As if customers really care about why we charge a markup at all. As shop owners we continually search for the best price on everything. From parts, supplies, tools, rent, insurance, etc.. We shop on Amazon, eBay, AliExpress, etc., but we get frustrated with customers when they do the same thing. If there is anyone here that pays supplier B more money for parts than supplier A because supplier B needs to make a higher margin to pay his bills, I would love to hear from them. Having said all that, I have just not been able to get myself to do it. It's a radical change and we would need to make sure we have a labor formula that works. Scott
  15. I wanted to expand a little on the comparison to Doctors. While I completely agree that we should be treated the same way, and be compensated for our time and diagnostic test, just as doctors and other professionals are. There is a part of that equation, that really has not been discussed, and that is customer retention. I have not had much of an issue getting customers to pay diagnostic fees. However, when customers agrees to pay them, regardless of how you word it, or explain it to them, I believe most have an expectation spoken or not, that those fees will lead to a diagnoses. But, regardless of that, most are certainly going to leave having an issue that is still unresolved. Which is what led me to the original title of my post. Do you guarantees any results from your diagnostic time? I was reminded of this by a few recent events in my own life. First there is my 85 year old mom. She has been taken to the hospital multiple times in the last few years for episodes in which her blood pressure spikes unusually high accompanied by a number of other symptoms. The do some test, her pressure comes down, and then have her follow up with a doctor within a few days. She gets some test at the doctors, usually a prescription of some sort, and goes on her way. One even removed her gall bladder. It is usually only a matter of time before it happens again. Once it happens again, she usually starts looking for another doctor. She has been through this cycle numerous times. So yes, those doctors were compensated, but they also lost a patient/customer when they were unable to find the cause of the issue, and she had to go searching elsewhere for a solution. Earlier this year I had a kidney stone. It passed, but about a month later I started having the same symptoms, so I went back to the emergency room. They were not comfortable doing anther CAT scan so they took an X-Ray and said they can't see anything. So I made an appointment with my doctor who requested a copy of the original CAT scan, and he said everything looks fine. Guess what I made an appointment with another doctor, which I am still waiting for; because I need a solution, not a test. Right now I'm trying to sort out what will work best for my shop. I don't know the answer to that yet. Just throwing thought out here now. What I'm seeing is, if I send them somewhere else to deal with an issue I don't want to lose hours and hours in, I may lose a customer, If I have a customer's car for a week or two sorting something out, I might lose a customer, and If there is an issue I can't give a definitive answer on I might lose a customer. So right I'm thinking sending them somewhere else prevents me from losing hours and hours. Just to give you an idea of the type of issue(s) I'm talking about, here is the latest we were working on. We had a 2007 Audi that intermittently would not start. It was there for a few days were we would go and try to start it from time to time. After a few days we started to experience the issue. There were no codes, and since it ran normally when it started, we were pretty confident that there were no mechanical issues, the coils were okay, and the fuel was okay. When it wouldn't start, you could smell fuel, so we knew the injectors were firing, the coils had built in modules, with ~12 volts voltage, and a good trigger signal. The cam and crank sensor tested normal when it wasn't starting. Then one day my tech noticed that when it wasn't starting, if he turned the key back to the run position quickly, it would start. He was able to do this several times, so that lead him to believe the issue was the contacts in the ignition switch. Pretty logical. He replaced the switch, but that didn't fix it. At that point he came to me to let me know he was out of ideas. So we started working on it together. I started by re-scanning the car. I got the same results. No codes. I was not able to get it to start the way he did when is was failing. But after a while, I noticed that if I let go of the key and it jump back quickly, while the crank with no start was happening, it would start when the key no longer engaged the starter. I was able to do this over and over. So I theorized that a voltage drop must be happening when the starter is drawing current. We check the computer power and ground. No problem there. we checked the ground from the battery in the trunk all the way up to the engine, and there was very little voltage drop. We did find enough of a voltage drop from the positive side to make us think we may have found the issue. So we ran a jumper from the battery to the front of the car. The problem continued. After a little more brain storming and testing, we finally found the issue. I'm going to wait a few days before posting what we found in case anyone wants to take a guess. The other one that comes to mind is a BMW that we replaced the DME. If you have ever done a software download on a BMW with the factory system, it will not allow you to do just one module. If you want to load one module, there are several others that require to be updated first. Well, the downloads failed half way through leaving 5 or 6 modules dead. I worked on it for a week or so. Sent it to another shop who said he could straighten out. He was not able. I had a mobile programmer come out. He was not able to do anything with it. It took me about 2 more weeks, but I eventually was able to get all the modules back online and updated. It was rewarding once it was done, but it didn't help my bank account.