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ScottSpec last won the day on February 11

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About ScottSpec

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    Experienced Poster

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  • Business Name
    Scott's Automotive
  • Business Address
    11804 Coakley Circle, North Bethesda, Maryland, 20852
  • Type of Business
    Auto Repair
  • Your Current Position
    Shop Owner
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  1. We don't see it a lot, but when we do, we keep it simple. We tell them that we cannot install customer supplied parts, that my insurance company will not allow it, and that would put my business licenses, as well as a number of my relationships with outside organizations that require insurance, at risk. It completely eliminates the steak and potatoes conversation, or it's variations like bringing your own needles or stitches to the hospital. It also eliminates the I have to make money conversation. None of those usually go very well. It shows you are open to discussing it, and the customer will see that as an opportunity to sway you their direction. When they can't, they will experience it as a failure. Joe, in your opening post, you stated: "I review all the benefits of me suppling the part, the warranty and the fact that if the part is wrong or defective or fails in the future, he will have no recourse and will have to pay to have done all again." You may want to check the laws in your area. There have been quite a few legal cases that have established that you are just as responsible and liable for a customer supplied part as you are for a part that you supplied. You may have to provide the same warranty on their part as you do on one you supply and sell. That's right, you may end up buying a new part out of your pocket, and providing the labor to install it. Even if a customer does not pursue legal actions, they almost always expect that you will "help" them out with the cost of replacing their part, after all, they "already paid you for the repair". For anyone who is still installing customer supplied parts, I suggest you check with your insurance agent to see if you have coverage should the customer supplied part fails. Don't waste your time having a customer sign a waiver. These will never hold up in court. This has been battle tested. The courts hold you to be the expert, not the customer. If you agreed to install it, you have given it your stamp of approval, and now it is your responsibility. There is a more complete article here: https://www.searchautoparts.com/cust-supplied-parts-liability-again One interesting extract from that article is: "I know that in my home state of Maryland and many other states, there also is an issue of parts warranties not being transferrable. In Maryland, any installed part has to be given a minimum 4,000-mile/90-day warranty, and any repair facility would be on its own if a customer supplied part fails. Those implied warranties are very serious business, with all of the risk and liability that comes with them, including such little gems as responsibility for property damage or bodily injury. Install a customer supplied part at your own risk." Maryland also happens to be where my shop is.
  2. ScottSpec


  3. 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
  4. 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
  5. 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
  6. 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
  7. 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
  8. 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
  9. 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
  10. 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
  11. My official start was May 1, 1989, but we started doing work in April.
  12. 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
  13. Since 1989. It will be 30 years in May. Why do you ask? Scott
  14. 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
  15. 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

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