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Posted (edited)

Hello there.........

 

This is my first post and I wanted start by thanking you all for the wealth of information and insight available through this forum. I hope that eventually I'm be able to share some of my own insight with fellow members.

 

I have a quick question regarding stocking inventory and I apologize in advance if this has been covered in previous posts (I tried searching but was unable to find any answers to my specific question).

 

Ill try to be brief:

 

We've been in the business for roughly a year and a half and it seems I've hit a brick wall when it comes to controlling COGS. We are doing quite a bit of brake work, so I'm going to start by focusing on the profitablility of that service. I've recieved pricing from a few different vendors for brake pads and it looks like I could save anywhere from $5 - $20 per set if I buy in bulk. It has been suggested that I need to carry around 100 SKUs to achieve a respectable rate of coverage. Does anyone have any thoughts on this topic? I realize the vastness of brake part applications on todays vehicles, so my assumption has always been that this is a fools errand. However, if im able to sell a job based on the availability of parts and speed of service, while at the same time achieving lower COGS, its a win win. The pads we currently install meet or exceed OE and I have no intention of trying to expand margins by installing a lower grade pad. This is simply out of the question. Any thoughts or suggestions would be greatly appreciated.

 

Thank so much!

 

 

Edited by SACTO AUTO
Posted

Unless you can get the pads in your stock on consignment, I wouldn't stock them. If you stock them it means you put the money out yourself and you have investment tied up in something that might not move. I stock almost nothing because I have two auto part stores within a mile of my shop. Like was mentioned above unless you know exact numbers you sell on a regular basis I wouldn't do it.

Posted

I agree with both the comments above. I once considered stocking brake pads, and I only work on Toyota/Lexus/Scion... There are still too many variables to offset the cost of stocking pads.

Posted

We currently are in a stocking program for brake pads with Advance Auto Parts. We only have to stock 10 sets of brake pads though and all of the brake pads we purchase from them for any type of vehicle is a set price. For us, this makes it easier to have a set price for brake service for almost every make and model. I think if we were required to stock 100 sets, we would not have done it as that is way to many.

 

Posted

Welcome Sacto.... I'm not far away up in Auburn...

We do just euro cars. Even still there are tons of options. I stock about 8 sets of pads for cars we work on often. It doesn't really benefit us that much, we get worldpac 4x a day so we can still have a car out in 2-3 hours by ordering in.

I would say keep your inventory down as low as possible. You may pay a little more, but that's the cost of doing business on someone else's money. Say you hve 10 sets that never sell. You won't get your money back, and then you will be annoyed that you selected those pads to stock... Just not worth it.

  • Like 1
Posted (edited)

My apologies for the late response....Ive been having issues logging into the site ??? Worked with Mozilla finally.

 

Anyway, WOW!! Thanks to all of you for the comments and great advice! I would agree that only a consignment program would make this worth the effort. In a cost comparison, current vendor vs. alternate vendor SKUs, Id only be saving an avg of $8 - $10 per set which was dissapointing to say the least. Besides, having just started up I feel im still a bit underpriced given the quality of our work and the parts we install. I have no compunction whatsoever in raising prices eventually. Also, I have great service with the current vendor. Delivery times are consistent (15 mins +/-) and so far the pads themselves have performed well (the rotors not so much :/).

 

Love hearing there is profit to be found in brakes. I agree. Now if I could just find more jobs to do in a day!! The greatest challenge of all, right??

 

I am beyond excited to have found this forum. Thanks again.

Edited by SACTO AUTO
  • 1 month later...
Posted

We stock oil and air filters, chemicals and oil. A selection of steel brake lines too. That's about it. The parts stores get here in 10 minutes, I let them carry the inventory. No price difference . I got a free cabinet for stocking oil filters - wow - the convenience makes it worthwhile. Even air filters are crazy , I probably have 300 in stock but if it's not here 99% of the time it won't get sold.

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  • Have you checked out Joe's Latest Blog?

         0 comments
      It always amazes me when I hear about a technician who quits one repair shop to go work at another shop for less money. I know you have heard of this too, and you’ve probably asked yourself, “Can this be true? And Why?” The answer rests within the culture of the company. More specifically, the boss, manager, or a toxic work environment literally pushed the technician out the door.
      While money and benefits tend to attract people to a company, it won’t keep them there. When a technician begins to look over the fence for greener grass, that is usually a sign that something is wrong within the workplace. It also means that his or her heart is probably already gone. If the issue is not resolved, no amount of money will keep that technician for the long term. The heart is always the first to leave. The last thing that leaves is the technician’s toolbox.
      Shop owners: Focus more on employee retention than acquisition. This is not to say that you should not be constantly recruiting. You should. What it does means is that once you hire someone, your job isn’t over, that’s when it begins. Get to know your technicians. Build strong relationships. Have frequent one-on-ones. Engage in meaningful conversation. Find what truly motivates your technicians. You may be surprised that while money is a motivator, it’s usually not the prime motivator.
      One last thing; the cost of technician turnover can be financially devastating. It also affects shop morale. Do all you can to create a workplace where technicians feel they are respected, recognized, and know that their work contributes to the overall success of the company. This will lead to improved morale and team spirit. Remember, when you see a technician’s toolbox rolling out of the bay on its way to another shop, the heart was most likely gone long before that.
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