Tires Too

WOW. I find it hard to believe that every shop owner is a con artist.

Selling tires can be your most profitable service you can do in your shop! Forget about profit percentages, look at profit dollars. I'll try to break it down to make sense. Let's say your labor rate is $80 per hour and you sell an additional $80 in parts at 50% profit for each hour of labor billed, your profit dollars are;

Labor sale $80

Part Profit $40

Total Gross Profit $120 per hour.

By selling tires at $20 over cost, plus charging $20 for mounting and balancing you will have the follow gross profit dollars by selling and install 4 tires in an hour of bay time;

Labor sale $80 4 tires x $20 each for mounting and balancing

Tire sale $80 - 4 tires x$20 markup on each

Total gross profit dollars $160 per bay hour. In addition you get the opportunity to inspect the brakes, shocks, struts, front end components, maybe sell the wheel alignment, road hazard protection plan etc. Tires can be install by an entry level tech or general service tech costing half of what an "A" level tech cost.

I know we often look at profit %, but it's really profit $ that pay the bills.

Just my opinion.

Russ

I am not a labor law expert but I believe that you are entitled to at least minimum wage for all your clock hours worked or your flat rate hours booked, whichever is greater.

For what its worth, dealer or otherwise, it seems the parts quality has gone into the crapper and the suppliers wont work with us. I have a Windstar on the schedule today that is in for its THIRD wiper motor. Yes I will get another motor but no comp for labor. And the sad part is their is no alternative. A reman motor regaurdless of who it comes from is the same rebuilder (except maybe Ford).

Jeff,

We had the same issue with a Windstar last year, actually had a water intrusion issue. Check the cowling and make sure rain water isn't running into the motor.

Russ

Gonzo,

THANKS

I really needed a little perspective today. Been having some personality conflicts in the shop, everyone is in a little bit of a mood, a couple of jobs not going to smoothly. I'm sharing this with everyone to hopefully change our moods a little bit.

Thanks again,

Russ

Has anyone tried the copper/nickel brake lines. I was always under the assumption that brake fluid absorbed copper, in addition to moisture.

Joe,

I hate to say that we have been using it for years, but I never thought about the brake fluid absorbing copper. I will have to find out about that. As far as using it, we have been very happy with it, it bends easily, flairs nicely and resist rusting.

Russ

Joe,

I spoke with Repair Pal about their Top Shop Program. It is pretty expensive, I spoke with the one shop that is listed as a Top Shop in the area, the owner at that time did not feel that the number of referrals/tow ins was worth the monthly fee that they charge. The program has very limited visibility in my area.

Russ

Rooster,

I can not even count all the different bulb #s we stock now. Wagner has a cabinet that you should be able to purchase thru your local supplier to give you a good starting point, but you may need to add additional part numbers. I believe we are stocking about 45 to 50 different bulbs. On wipers we use Anco Profile beam blades. The blades have multiple clips that allow coverage for most every vehicle we service.

http://www.ancowipers.com/products.html#p_profile

They had a starter kit that I believe was around $300 to $400 that gave you 6 each of the different length blades, plus all the different clips. We've used them for 2-3 years with great success.

Russ

Hey guys just wanted to get some opinions. My shop is located in Queens, NY. There are a ton of people in and around my shop as well as lot of competition. We are a relatively new shop (6-7 years old) and just moved into our new location in the summer. It was a nice upgrade from our very old and run down and Very small shop. Now we have approx 5,000sqft with a lot of new equipment, renovated office, lounge area, epoxy floors, etc. We mainly specialize in BMW work however I have been trying to open the doors to other German car makes. Although our new space is great, it is not in the most desirable location in terms of curb appeal. I sent out a direct mailer with Mudlick Mail to about 5000 homes. The mailer was sent out at around November 12. I have yet to really get much of a response from the mailer and I am rather disappointed. There are a number of factors that might have been attributed to the low response such as the mega storm that hit over here and also going into the holiday season.

 

My main goal is really to drive new business to the shop. I have been on a on going campaign to stay in touch with our old customers however with the new space and new bills, I see the need to increase my customer database. Has anyone had any experience with direct mailers in the NYC or highly dense metro areas? I am reluctant to try again due to the costs of sending out mailers but I was thinking of maybe giving it another shot toward the spring time.

 

Thoughts?

Welcome to the site. Glad your on board. One of the keys to a direct mail campaign is to figure out what you are trying to accomplish with the mail piece. If you are looking to drive car count you have to have a compelling offer, if you are trying to establish a brand image for your shop you may not see an uptick in your car count right away. I've had good luck with a "Birthday Mailer" to a targeted demographic. I've also have good results with Mudlick Mail with a $19.95 Oil Change. We actually have an ARO of $125 on our Mudlick Mailers. That offer may not work for you with Euro cars, but you need to find some offer that would get them to try a different facility from where they are going now.

What type of offer did you put on your Mailers?

Did you do just one mailing or have you continued mailing?

I'll be happy to share other things we have done if you are interested.

Good Luck,

Russ

I know many of you probably follow Mitch Schnieder's blogs, here is one I think is really important and possibly an interesting marketing tool; http://workshop.search-autoparts.com/_Made-Where/blog/6474405/31710.html?as=31710.

I'm going to be meeting with my vendors next week to see who wants to support this kind of a marketing campaign. Let me know what you think.

Thanks,

Russ

We use Valvoline Flush products and charge;

Brake Fluid Flush $119.95

Intake/Top Engine Cleaning $119.95

Coolant Flush $129.95

Power Steering Fluid Flush $99.95

Trans Fluid Flush $169.95

Oil/Block Cleaning $99.95

I've decided to do the following;

I will concentrate my focus and efforts on the things I can impact/control. I will not waste effort bitching about the government and what they are doing or not doing. People still need to have their vehicles serviced, I will concentrate on doing that to the best of my abilities, at a price that allows me to make a living and profit.

I know this is simplistic and some may say naive, but I will not become a victim by not concentrating on the things I can control and blaming others for my troubles.

I've been struggling with this all summer. I actually changed my parts matrix earlier in the year and lowered some of my pricing, brakes in particular. I was feeling some push back from customers on our premium brake service. I have not liked the results, it dropped my overall parts margin by about 2%. I have recently tweaked the matrix again to try and recoup the lost margin.

Labor rate is at $79.43 currently and I really haven't had many customers ask about it. I also increased the labor matrix to increase the effective labor rate on bigger jobs. I will probably increase our labor rate by about 4% next month.

Joe,

Red Sox fan here in New Hampshire. Guess I should just keep my mouth shut after the last 2 years though!

Russ

i've never had a comeback with a plug,

though on my car hauler with 80psi tires, the plug gets out slowly while driving (still gets me through the day).

 

so i go plugs on small car tire punctures, patch-plugs on trucks and high performance cars

Type S Zero,

Take a minute and google tire repair lawsuits. It is shocking to see some of the settlements involved in tire repair lawsuits. If you do not follow industry standards in repairing tires you are leaving yourself open to some major exposure. A plug is not a proper repair. We charge $25 to do a patch/plug repair.

Russ

Hi Joey N,

We bought the John Bean/Snap-on aligner several years ago after only using Hunter Aligners for 20 years. I have been very happy with this unit, it's easy to use, fast, accurate and has all the features we use except for steering angle resets. Steering angle reset info we get from Alldata or scan tools. We do between 6 and 8 alignments a day. We upgraded our rack last year and I did stay with a Hunter Rack, it's expensive but they last forever.

I was unsure of making the financial commitment to buying alignment equipment, but when we did our steering/suspension repairs went up significantly. It really was a huge impact to our sales and profits above just alignment sales.

Good luck,

Russ

Tires Too

Joe and Keith,

These are some great comments and insights on the "new normal". We are seeing the same thing with our good long term customers now pricing services before authorizing the work. If this truly is the new normal and cost control is going to impact who is the "last man standing", what can we do to drive down our costs? Has anyone had success with pooling specialty tools with other local shops? How about local marketing groups? Should we be looking to limit the scope of our service offerings and specialize by Vehicle Brand? Do we aggressively market to drive up car counts as average repair orders are going down?

I'm just throwing out thoughts and questions to everyone to brainstorm on this subject and welcome every ones thoughts and comments. I know there is a great wealth of experience in this group and I am happy to steal other peoples ideas.

Thanks,

Russ

Joe,

Here's an update as to where I'm at on WC. I've joined the NHADA (NH Auto Dealers Association). They have an in house WC Trust. The rates I've been quoted are cheaper than I had previously and historically they've returned 30% to 40% of premiums back to the group based on loss history. They classify my service writers as clerical not technicians. I'm very frustrated by the run around I've gotten by the carrier I had. They were holding fast to their interpretation of Service Writers as NOT falling into a clerical class. Tried to LOGICALLY discuss the fact that they may not strictly be clerical, but that classification was much closer to their job responsibilities than a Tech class. They used the fact that there were only 2 classifications available; clerical and technician, therefore if they were not clerical they had to be techs. I maintain that there should possibly be a third classification between the two. I am trying to get someone in the Insurance Comisioners office to hear my out on this subject.

In the short term I've resolved it by moving the policy to the association, but I think the State Insurance Comisioner needs to address this issue.

Here is a repost from april;

I hate to have another government mandate but I think we, as an industry, share some of the blame. The tire industry trade groups, TIA and others, have for years endorsed that a proper tire repair requires the removal of the tire from the vehicle, dismounting the tire from the rim, inspecting and repairing from the inside of the tire. This can not be done profitably when we try and compete with the guy down the street that is willing to throw a plug in it for $5.00. When you look at some of the multimillion dollar judgements that have been handed out over the last few years for improper tire repairs, it makes it a lot easier to say "NO" to a customer who wants a $5.00 repair. We have not done plug repairs for 15+ years. Have we "lost" some tire repair business to the guy down the street - yes. Do I sleep better at night knowing we are doing proper repairs - YES. Most customers, and the ones we want to keep, understand that we are trying to keep them safe on the road. We take a little time to educate them as to why we repair the tire the way we do and it goes a long way to build a trusting relationship with them.

Joe,

I'm in the middle of this myself. My WC Insurance company has charged us a clerical rate in the past for my service writers. During the audit this April they decided to lump everyone together at the Tech rate, giving me a bill for about $7000. I'm trying to fight it with mixed results so far. I have an employee leasing firm that says they will classify Service Writers as clerical if I start using their service, but I'm not sure I want to go that way yet. We are sending a letter to the Insurance Commissioner to see if we can get anywhere there. Everyone I talk to says that NCCI a company out of Florida does the determination for the various classifications. I feel like I've been talking to the wall, trying to get the same point as you across; Ok maybe the Service Writers are not fully clerical, but they sure are not Techs and should not be classified at the Tech rate. I've gotten no good response to that statement except that NCCI classifies them that way. There has to be some other classification for our SW. I'll keep an eye on this forum and update as we go.

Russ

We are $14.95 and I think I am too low.

We charge $25 to patch a tire. This is the total price including remounting and balancing. I'm not sure it's enough for all that is involved in doing the repair, but that's what we charge.

Joe,

There just is too much potential liability to not follow industry guidelines for tire repairs. We have only done internal patch or patch and plug repairs in our shop. The manufacturers are trying to distance themselves from potential liability do to substandard repairs. It's a service that is in demand from our customers, but we need to do it properly and get paid a fair price for the service.

Russ

Joe,

Thanks for the idea. I went to the local grocery store and bought a couple of dozen flowers(some roses and carnations) and put them in a vase on the counter. We put up a little sign saying Happy Mothers Day, as a token of our appreciation please take a flower. Response has been great.

I've used Rotary Lifts for 20+ years and had great luck with them. Last year we were looking to add 4 lifts and replace 3 of our oldest Rotary Lifts. Lift company I was dealing with suggested Forward Lifts (company owned by Rotary). We have had a number of minor problems with them from the start, leaking hoses, broken lock release cables. I should have stayed with Rotary Lifts.