Pricing Parts Purchased from Dealers [THA 153]
Bill Haas, AAM, is the owner of Haas performance consulting LLC, with 40 years of experience in the automotive service and repair industry. Clients have access to Bill’s solution-based focus, expertise, unique perspectives and in-depth knowledge of the industry.
Bill began his career working part-time at a full-service gasoline station in Appleton, Wisconsin. His career includes time as a technician, shop owner, technical trainer and on the staff of the automotive industry’s oldest and largest association representing automotive service and collision repair businesses. While at the association Bill had the opportunity to work with all segments of the industry.
His knowledge of the industry has been shared on many occasions as he has been invited to speak at numerous industry events as well as providing testimony at hearings of the US Congress and several state legislatures on important legislation and regulation affecting the automotive industry.
Bill received the Accredited Automotive Manager (AAM) credential from the automotive management institute in 1996 and has been a member of the automotive management institute’s faculty since 2002.
Bill is also the business manager for NACAT, the North American Council of Automotive Teachers. His services include business management seminar development and delivery, keynote presentations, business consulting, performance coaching, and strategic planning facilitation. Listen to Bill’s previous episodes HERE.
Rick White has been working in the automotive, software & coaching industries for greater than thirty years and is currently an AMI-approved training instructor. He brings to the table a career’s worth of technical experience, twenty plus years of management experience and four years of fleet management experience. He owned and managed several successful automotive repair shops.
Currently, Rick is President and Lead Coach for 180BIZ, an auto repair shop training and business coaching company proudly serving the independent auto and truck repair shop owner since 2006. Rick owned and managed several successful automotive repair shops.
Rick has been acknowledged as an industry expert and has been featured in many automotive trade publications such as AutoInc, MotorAge, Parts & People, Auto Report, Automotivation and Ratchet & Wrench. His blog was voted one of the top 10 in the country and was featured in Success Magazine.
In addition, while a shop owner, he has served as
- President of the Massachusetts & Rhode Island chapter of the Automotive Service Association,
- Mechanical Director of the Massachusetts & Rhode Island Chapter of the Automotive Service Association and
- A member of the ASA National Mechanical Operations Committee.
Rick has been training and speaking at industry events across the country including AAPEX for the Auto Care Association, VISION for ASA Midwest, EXCEL for AASP MO, Shop Survival Summit for AASP PA, ATE for ASA NW and ASTE for IGONC. Listen to Rick’s previous episodes HERE.
- Fear. The unwritten rule that we are supposed to be cheaper than the dealerThe cost of repairs is higher than ever; don’t be afraid to charge properly
- You can’t grow a business from a place of fear
- Rick White: I would rather explain my price one time rather apologize for poor quality over my lifetime
- Don’t treat your customers like the dealer. You will quickly go out of business
- Our value proposition for the customer should take the fear of a proper mark-up out of the equation.Do you deliver: Trust, safety, warranty, accessibility, reliability, timeliness and dependability to your relationship.
- Start with your net profit strategy in mind. Parts Mark-up is an important element in supporting your net profit goals.
- Dealers mark-up the parts they use in their service baysSome customers say they can get the job done at the dealer for less money. That should be an easy value proposition to sell against
- List price does not predicate what you should sell the part for.
- ‘Dealer Parts’ is the wrong phrase to ever use. A part is a part is a part, wherever you get them (careful not always true). Aftermarket or Dealer Parts should have no bearing on any pricing strategy, quality, performance, risk, exposure and warranty among other reasonsCall your suppliers Primary Vendor and Secondary Vendor. Do not mention supplier or Dealer.
- All parts should be put through a matrix
- Use the HAND test for each part purchase invoice. Cover up the vendor name with your hand. It doesn’t matter where you purchased the part. You’ve got to make a proper margin
- Get off the price point and talk about your value proposition. The entire team need to be on this page
- Three Questions to Qualify a Price Shopper. You are looking for the right customers.What makes you think you need a ____________
- Why didn’t you have the other shop do the repair?Too much money and doubt may be the answer
- It sounds like you are looking for a second opinion
- With a price shopping customer, you are only going to build a transactional customer. No referrals, no retention. Just based on price today. No loyalty. No trust.
- You need the confidence that it is OK to make money. You must be the CEO of the business
- Find the businessman in you
- If your margins aren’t right, where else are you making up the margin? Your net profit will never exist if you are not being a businessman and making an overall margin that allows your net profit to be there so you can take your quarterly dividend
- Service Advisor training on how to deal with price objections and sell with confidence your value propositionShop owner needs to provide the overarching culture: Mission, Vision, Purpose, and value. It is easy to sell this
- Value shoppers are your targets
- Help your customer to the degree that you can make a profit when you find that there isn’t a match, send them to your competitor that does everything for cheap
- Fear. What should you be afraid of?Afraid of a customer leaving
- I may charge too much
- I can’t meet payroll
- Fear that you are not making enough money!!!!!!!!!!!!!
- When you charge enough you can do amazing things for your customers
- Google Search on John Ruskin. Find quotes from his. Inspirational
- It all starts with a net profit goal and then building a gross profit margin model that attains that goal. Remember you pay bills with gross margin dollars
- You sell solutions not parts or labor
Do a google search on John Ruskin to find some great quotes. https://www.brainyquote.com/authors/john-ruskin-quotes
- A special thanks to Bill Haas and Rick White for their contribution to the aftermarket.
- Books Page HERE
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