AndersonAuto

June was awesome for me as well. We set another all time record month for both gross sales and GP$. Second month in a row we've done that. Time to pass out Benjamin's to everyone again!

Tyrguy beat me to it. My parts margin for the month is 55.58%. That's cost times 2.25 on average. If you're having a hard time getting 50% parts GP, or have no idea how it's even possible, you need to have a serious look at some management and advisor training. It's an important piece of the puzzle in keeping the lights on.

I agree. Joe's customer was looking to cut not only the cost of parts, but labor too. He could have given him the ball joints at cost and bumped the labor to make up for it, and the customer would have still DIY'd the thing. If that weren't the case, he would have tried to get Joe to install ball joints that he bought at AAP. The customer will eventually learn his lesson, or he'll be broke all his life paying for repairs (and not just auto repair) twice. Move along and serve the next customer who's willing to pay for your service.

It's a house brand oil from our local supplier, Allied Oil. It's Dexos approved, but we don't have to pay for the brand name. Very few customers know or care, and if they do we are glad to install whatever oil they want, but certainly not for 29.95. The filter is also a house brand from Factory Motor Parts. Super cheap, and hasn't given me a bit of trouble for over 4 years using them. Again, if someone cares, we'll be happy to upgrade the filter as well, for a price. We are certainly doing well with this. I did just short of 2 Million last year (as in 1.5 days business short) and as of today I'm up 17.89% over last year. The second half of last year was really strong, so I suspect that gain over last year will shrink a bit, but I expect to end the year at 2.2 and a 20% net. That said, oil change marketing does produce a fair number of "one and done" customers. Quite often they will spend money fixing other things they need on that first visit, but you may never see them again. It's just a part of the model. A lot of guys couldn't sleep at night knowing they're going to have 100 customers fall into the Lost Customer category in a given month. I just roll with it and keep pounding the marketing. We're certainly doing things to try reducing the outflow, but it will always be there to some extent.

I outlined all of this in another thread.

Really? I had actually started to type out a response, but decided that due to your tone it was just going to turn into a urination contest with no real point. If you think that after your rant directed at me, my telling you to relax is an attack, you've got much bigger problems than I thought. Thin skinned perhaps? In the mean time I'll continue to wish for a good solution to the technician licensing issue without being at risk of govt regulators finding an ever increasing need to justify their existence. Have a great afternoon. I know I am.

Dude, relax.

This is something I've struggled with. On the one hand, I completely agree that we need some sort of system to ensure that technicians are qualified. In the state of Kansas, as in most states, there are licensing requirements, tests to ensure competence, and continuing education requirements for a whole array of professions. You can't call yourself a Dr without passing medical board exams, you can't call yourself a CPA without passing the CPA exam. You also can't cut someone's hair or give them a massage. Or pull a permit for new construction for plumbing, electrical, or to be the general contractor. And probably a thousand other professions I can't think of at the moment. The qualification requirements to be a technician is to simply say "Hi, I'm a mechanic". But..... The states that do have auto repair regulatory bodies (the BAR in CA and other states) the main focus is on the front counter, not the techs. Those states seem to believe that the most damage comes from unethical shop owners, not incompetent techs. And if we did end up with a technician licensing regulations, would we end up like hair salons with the constant harassing of the techs by the state? I have a friend who was fined by the state because she had a spray bottle on her station that was unmarked. It contained water. After paying her fine, she had to make sure there was a label on the bottle that said "water". I don't know about you, but I'm not interested in that sort of meddling.

Yes, I am offering a full synthetic Dexos approved oil change for $29.95. The margins aren't much, but it's not zero. Just north of $5.00 if my lube dude does it. Pretty much zip if one of my master techs does it. But margin on the oil change isn't the point of the oil change. The inspection is. And no, we don't just load the RO up with wallet flushes. My advisors won't put up with that. We do a full and proper inspection on the vehicle, that we can demonstrate the need for any item at any time, and we present the findings to the customer. Since my advisors are great at their job, they sell a large portion of the work. I spent the weekend at the lake, and on Saturday my guys closed $17,751 at $555 a repair order. We're closing in on another record month, and should end up at about $220K. Then I'll net 20% of that. And I've promoted myself up to shuttle driver. Life is good.

I do cheap oil changes, although since switching to only using full synthetic it went up to $29.95. No desperation here. It's part of my business model, and working fantastic. Now that you mention it, a permanent sign is certainly cheaper than my mailers. I'll have to think about doing that.

There was once a guy who ran a Honda shop in Nebraska who put out an auto shop marketing booklet. I'll never forget the first 3 steps to auto shop marketing in that booklet. 1. Soap 2. Paint 3. Light

I think you may be a little confused about the definition of ELR. What you're describing is that you charge your full door rate on most services except LOF and tires. That's not what it means. Effective Labor Rate is the result of dividing the billed hours by the technician into the charged labor dollars to the customer. Let's assume that your door rate is $112. If your tech flags 10 hours and you bill the customer $1120, then your ELR is $112, or 100% ELR. But, if your tech flags 11.5 hours and you bill the customer $1000, then your ELR is $86.95, or 77.63%. Always do this calculation from your books and payroll. As in, what do the books (not the management system) say that you collected in labor charges for the period in question, and how many hours did you actually pay the tech? It's really easy for the advisor to "forget" to add labor hours to the RO, but the tech flags the time. Or, if you pay the tech based on the hours shown in your management system, the advisor can add hours without adding dollars to the RO. ELR is one of the fastest ways to check whether your advisor is giving away labor. If your ELR is way off, it doesn't point to the problem, but it shows you that there is a problem. Then you start auditing repair orders.

We have two "guard dogs". More like door greeters. The pit bull is mine, and the Rot puppy belongs to my manager. Neither one spends the night at the shop. The Rot sheds quite a bit and we have to sweep often, the Pit sheds but it's super short so you don't see it. We have a 2.5 acre lot, so the poop mess isn't a problem.

A full synthetic oil change for under $30 is a heck of a value. 😉 There are a lot of different business models that can work. Your method is effective for you, and mine is effective for me. Nothing wrong with either. A lot of it depends on your demographic. I happen to have a really good demographic that most shops would envy. The local demo has money, but not so much that they buy new cars on a whim. There are a lot of stay at home moms that actively look for bargains so they can make a single income stretch a little further, but at the same time they know that they can't trust their vehicle to just anyone. This is where being super competitive on the commodities like an oil change come in. Lure them in with the oil change, then impress them with the great facility and staff. Steady car count and good ARO have been the result. Because of my demographics and the kind of operation we run, we get very few of the "problem" customers that most people associate with bargain hunters. Like I said in another thread, who cares if you get rich by serving people looking for a discount oil change? You're still rich, right?

I recently started doing a better job with contacting the customer after the sale. We used to call everyone about 3 days out, but as we grew it got to be a burden placing 400+ phone calls a month for follow up. Our goal in these calls was to be as unobtrusive as possible, so we made an effort to call the home phone number during the day and leaving a message. Unfortunately most people now use cell phones only, so that plan doesn't work anymore. The latest fix to that is to send text messages. We use an automated service for this. Customers seem to appreciate the follow up, and appreciate that we didn't interrupt them doing it. Unlike an email, no one ignores the text message. We get replies to most text messages within a few minutes of sending them, so it's something we do have to actively manage. If someone asks a question or has a problem, they expect a response fairly fast. Fortunately, I've got Patrick to help manage the near constant stream of text messages.

I haven't used them, but I can tell you that they're pretty good at marketing themselves. I see them everywhere I go online, so they're good at reaching their target audience. I have no idea if that translates into more cars and better customers for their clients.

My shop is dramatically different from yours as far as space/racks goes, so I don't have good answers for most of your questions. I do know however that you should absolutely be charging for diagnostics. But don't call it diagnostics to your customer. Testing and inspection are the correct words, because that's what you're charging for. The tests and inspections may lead to a diagnosis, but that's simply a result of your expertise when looking at the results of the tests and inspections.

I belonged to my local chamber for quite a few years. I think every local chamber is different, but I found that mostly it became a way for every insurance agent under the sun to market to me. I got very little business from it.

If all I did were oil changes, I'd be in the oil change business. I'm not. The game truly is simple. Get the customer in the door by just about any means possible, do a quality inspection, and present them with the findings. You can't do that if you aren't getting the car in the door, and the easiest way to get the car in the door is by enticing them with a great deal on the most basic of maintenance needs.

Oil costs 2.58 a quart. 5 quarts is $12.90. Filters average a couple bucks. Lube dude costs $15 an hour. Figure .3 to do the oil change, that's $4.50. 12.90+2+4.50=19.40 The lube dude's hourly production is good, but he's new so I don't have great tracking on him yet. Again, I don't really care if I make a dime on oil changes. I'd do them for free if I had to. Making money on oil changes is not the point of the oil change.

Straight costs (parts and direct labor only) are $19.40 assuming my lube dude is doing the oil change. GP is then 35% if they're using the coupon with the cheapest price. But GP on the LOF isn't the point. The point is getting the car in to do the inspection and talk about what the car needs besides the oil change.

I'll have to look at my oil cost tomorrow, but I do know that it's only 53 cents a quart more than the blend I was buying. That makes the synthetic oil change cost about $2.50 more than the blend oil change was, and I raised the coupon price by ten bucks. I make more money on the coupon oil change, and it's a smoking deal for the customer.

I hope everyone had a great month. April seemed to be off for a lot of shops, so if yours was one of them I hope it turned around for you. I had a great month! My guys turned in an all time record month. They beat the snot out of the previous record by $15K, and had a higher GP doing it. Car count is up, ARO is up, and I spent most of the month at the lake working on my boat while my guys took care of business. Tomorrow is one of my favorite times. I get to go in and write some serious commission checks. I'll probably flip everyone a Benjamin while I'm at it. Life is good.

I pay flat rate with no guarantee. Easy for me, easy for the techs. All I have to do is keep the phones ringing and the bays full.

$47.50 regular price, but most people show up with the $29.95 mailer coupon. If not the mailer, they at least will want the $34.95 coupon from my web site. I rarely sell the oil change at full price.