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Wholesale/dealer question
Posted by Rod W.
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Wholesale/dealer question October 26, 2004 03:07AM |
Registered: 17 years ago Posts: 382 |
<HTML>I have a Chevy dealer right across the street form my shop who is starting to bring me cars. He has a shop he's been using for 3 years, but likes the idea of me being so close. He's sent me a couple vehicles already & was real happy with the work.
When we started out, he came into our shop & saw all the Benz's, Lambo's, BMW's around and he said to me..."Remember, I'll be sending you Chevy's & Pontiacs and I'm not expecting that you make them look like MB's (chuckle-chuckle). Just clean them up nice. Put some wax on 'em and I'll pay you $90/car. Anything above & beyond wash/wax/interior clean up, you can bill me extra for." So far, so good. I've been able to bill him an extra $40 for a stone chip touch up I did on an Aztek & an extra $20 to heat up & push out a bumper corner that was damaged. The UCM seems to be a real nice guy and I think we'll work out well together.
There's also a new shop opening up right behind us that restores, cutomizes and sells classic American cars like Shelby's, GTO's, Mustangs, Vettes, etc. Anyhow, he's going to pay me $90/detail & $50 to buff/compound the ones that need it. He's going to send me all his detail work which will range from 2-3 to 10+ cars/week. He's also willing to send me any retail work that comes into his shop.
So I have a question. In order to get more work from the Chevy dealer & keep the other shop from looking elsewhere, I was thinking of offerring a tiered incentive program. Something like the first 10 cars for $90, the 2nd 10 for $80 and all the rest for $70. This would apply to each calender month. The discount applies to details only, not any of the extra services. Also, on the retail jobs, the guy mentioned a referral fee, which is fine with me because he's basically acting as my sales rep, so I think it's fair to give him a little commission. I'm thinking something like $25/full detail. But, I wanted to see if any of you have any kind of incentive/referral programs set up with your shops and how that's worked out for you.
Please, no need to discuss the pros & cons of dealership work. I've read all the threads. I really don't have a choice as winter it coming fast and I really need some steady cash flow so I can continue building the retail & marine side of the biz.
One more thing...the guy that owns the classic car shop has 43,000 s.f. of space & he's using 25,000 of that for storage & will offer detailing service to the owners while their vehicles are stored through the winter, so I'll be able to go over to his shop & work on his customers' vehicles over the winter. Some of his customers have some rare vehicles that they don't want moved, so this works out very well for them. This would all be retail work.</HTML>
Shine On!
Rod Wesley
Touch Up 'N' Go!
Auto & Marine Appearance Center
We take your car from Rough to Buff!
Visit our website at: www.touchupngo.com
When we started out, he came into our shop & saw all the Benz's, Lambo's, BMW's around and he said to me..."Remember, I'll be sending you Chevy's & Pontiacs and I'm not expecting that you make them look like MB's (chuckle-chuckle). Just clean them up nice. Put some wax on 'em and I'll pay you $90/car. Anything above & beyond wash/wax/interior clean up, you can bill me extra for." So far, so good. I've been able to bill him an extra $40 for a stone chip touch up I did on an Aztek & an extra $20 to heat up & push out a bumper corner that was damaged. The UCM seems to be a real nice guy and I think we'll work out well together.
There's also a new shop opening up right behind us that restores, cutomizes and sells classic American cars like Shelby's, GTO's, Mustangs, Vettes, etc. Anyhow, he's going to pay me $90/detail & $50 to buff/compound the ones that need it. He's going to send me all his detail work which will range from 2-3 to 10+ cars/week. He's also willing to send me any retail work that comes into his shop.
So I have a question. In order to get more work from the Chevy dealer & keep the other shop from looking elsewhere, I was thinking of offerring a tiered incentive program. Something like the first 10 cars for $90, the 2nd 10 for $80 and all the rest for $70. This would apply to each calender month. The discount applies to details only, not any of the extra services. Also, on the retail jobs, the guy mentioned a referral fee, which is fine with me because he's basically acting as my sales rep, so I think it's fair to give him a little commission. I'm thinking something like $25/full detail. But, I wanted to see if any of you have any kind of incentive/referral programs set up with your shops and how that's worked out for you.
Please, no need to discuss the pros & cons of dealership work. I've read all the threads. I really don't have a choice as winter it coming fast and I really need some steady cash flow so I can continue building the retail & marine side of the biz.
One more thing...the guy that owns the classic car shop has 43,000 s.f. of space & he's using 25,000 of that for storage & will offer detailing service to the owners while their vehicles are stored through the winter, so I'll be able to go over to his shop & work on his customers' vehicles over the winter. Some of his customers have some rare vehicles that they don't want moved, so this works out very well for them. This would all be retail work.</HTML>
Shine On!
Rod Wesley
Touch Up 'N' Go!
Auto & Marine Appearance Center
We take your car from Rough to Buff!
Visit our website at: www.touchupngo.com
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Re: Wholesale/dealer question October 26, 2004 03:39AM |
Registered: 17 years ago Posts: 3,550 |
<HTML>Rod:
You need to do nothing with regard to lowering your price. Do you know what it costs you to run your business? Do you know what your hourly shop rate should be based on what salary and benefits you want to take from the shop as well as all your fixed and variable expenses?
That is the key, knowing what it costs you to operate before thinking this price is great or that price is great. You cannot make a decision about anything related to price until you know what is costs you to operate.
If your work and service is good, do not whorer yourself by lowering prices. Stick to your guns. They want good work and service, not price.
Regards
Bud Abraham</HTML>
buda
You need to do nothing with regard to lowering your price. Do you know what it costs you to run your business? Do you know what your hourly shop rate should be based on what salary and benefits you want to take from the shop as well as all your fixed and variable expenses?
That is the key, knowing what it costs you to operate before thinking this price is great or that price is great. You cannot make a decision about anything related to price until you know what is costs you to operate.
If your work and service is good, do not whorer yourself by lowering prices. Stick to your guns. They want good work and service, not price.
Regards
Bud Abraham</HTML>
buda
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Re: Wholesale/dealer question October 27, 2004 01:44AM |
Registered: 17 years ago Posts: 505 |
<HTML>Rod,
I do agree with Bud, to some extent.
It is winter coming, but as Bud says very clearly, you have fixed costs and expenses.
If the dealer is honest, based upon his observation and comments regarding your normal work, then that is your start point.
Yeah, you are not going to make a "roach coach" look like a high dollar ride for a less price.
Set down with him, and "in writting", have him express to you, "his" expectations, and when and how, the dealership is going to pay you.
Give it a try, if you have time to do the vehicles.
One thing, he should understand, up front, that he is "getting a deal", and you will put your "profitable" details in front of his "deal".
Then watch the New Car and Used Car Sales Manglers pitch a bitch, when they "want it now!".
Part of the business.
No matter how you and the dealer principle put the deal together.
Ketch</HTML>
Do it right or don't do it all!
I do agree with Bud, to some extent.
It is winter coming, but as Bud says very clearly, you have fixed costs and expenses.
If the dealer is honest, based upon his observation and comments regarding your normal work, then that is your start point.
Yeah, you are not going to make a "roach coach" look like a high dollar ride for a less price.
Set down with him, and "in writting", have him express to you, "his" expectations, and when and how, the dealership is going to pay you.
Give it a try, if you have time to do the vehicles.
One thing, he should understand, up front, that he is "getting a deal", and you will put your "profitable" details in front of his "deal".
Then watch the New Car and Used Car Sales Manglers pitch a bitch, when they "want it now!".
Part of the business.
No matter how you and the dealer principle put the deal together.
Ketch</HTML>
Do it right or don't do it all!
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Re: Wholesale/dealer question October 27, 2004 03:47PM |
Registered: 17 years ago Posts: 499 |
<HTML>Bad move Rod. Win these guys over with the quality of your work - not "super prices". Once they have you on the pricing it's all downhill from there and then all the "favours" they want will start to surface. I know from 11 years of dealing with these guys and they are all alike. We get $115 for cars and I think I am getting out of it next year because we can charge up to $300-$400 for a premium detail with chip repair or dents or minor paint repairs etc... to a retail customer and we get paid THAT DAY with no BS. We are also considering installing spray in bedliners and refinishing alloy wheels now as well. Dealers for the most part SUCK to deal with. They are pushy cheap a-holes who appreciate nothing that you will do for them no matter how far you bend over backwards. If you are making money doing it great but I would focus on growing the retail side of your business if you want to make money in the long run. Dealer work used to make up 50-60% of my workload and now we are down to 30-35%. Our retail sales are up 20% over the same period because we aren't spending all day screwing around with low profit wholesale work. It's great when you are slow but sucks big time when you can be busy with the big dollar jobs.</HTML>
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Re: Wholesale/dealer question October 27, 2004 05:04PM |
Registered: 17 years ago Posts: 585 |
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Re: Wholesale/dealer question October 28, 2004 03:43AM |
Registered: 17 years ago Posts: 382 |
<HTML>Great advice, everyone! Thanks! I've decided to scrap the "incentive" plan. I decided that at $90/detail, I really can't afford to go any lower. In fact, I did another car for the Chevy dealer today & he wants me to start doing the touch up work on his cars. So, I'll charge $30-$50 for stone chip & minor scratch touch-ups. Since I mix my own paint & most touch-ups take less than 30 minutes, this is pretty good money.
Scott-thanks for your tips. I too have dealt with many dealers over past 3 years doing paint work before I did detailing. I've learned that, for the most part, they're pretty much like you described. Every now & then, you come across one that's truly interested in quality and wants to be fair, but they're far & few between.</HTML>
Shine On!
Rod Wesley
Touch Up 'N' Go!
Auto & Marine Appearance Center
We take your car from Rough to Buff!
Visit our website at: www.touchupngo.com
Scott-thanks for your tips. I too have dealt with many dealers over past 3 years doing paint work before I did detailing. I've learned that, for the most part, they're pretty much like you described. Every now & then, you come across one that's truly interested in quality and wants to be fair, but they're far & few between.</HTML>
Shine On!
Rod Wesley
Touch Up 'N' Go!
Auto & Marine Appearance Center
We take your car from Rough to Buff!
Visit our website at: www.touchupngo.com
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Re: Wholesale/dealer question October 30, 2004 03:43PM |
Registered: 17 years ago Posts: 499 |
<HTML>UPDATE:
My largest dealer account (of the 2 I held on to after deciding to scale back that part of my business) gave me a call last night to let me know that he was very appreciative of all my hard work but he has decided to take all his work "in-house" because the body shop is really slow. No notice, nada. This is the way these guys operate unfortunately. Funny thing is these are the same guys that as late as a couple of weeks ago were still trying to beat me down on prices based on "how much work we send" when they were planning to stop sending the work out to be done. However, I look at it as a positive (hopefully!) and I will now have the time to spend growing the paint business and focusing on the retail side. It may work out to be the best thing that has ever happened to usin the long run although it may hurt a little initially.</HTML>
My largest dealer account (of the 2 I held on to after deciding to scale back that part of my business) gave me a call last night to let me know that he was very appreciative of all my hard work but he has decided to take all his work "in-house" because the body shop is really slow. No notice, nada. This is the way these guys operate unfortunately. Funny thing is these are the same guys that as late as a couple of weeks ago were still trying to beat me down on prices based on "how much work we send" when they were planning to stop sending the work out to be done. However, I look at it as a positive (hopefully!) and I will now have the time to spend growing the paint business and focusing on the retail side. It may work out to be the best thing that has ever happened to usin the long run although it may hurt a little initially.</HTML>
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Re: Wholesale/dealer question October 31, 2004 11:28PM |
Registered: 17 years ago Posts: 382 |
<HTML>Scott-I've been there with dealerships too. Except with me it happens when they get a new UCM which is about every 6-12 months. He comes in & brooms out all the salespeople & either cuts the vendors already low prices or he inspects every car personally after the vendor spends an hour walking the lot & writiing them up, and you're lucky if you get one car to do! I hated doing paint work for dealers after their was a shake up. Eventually, I just stopped going to them as it wasn't worth the gas to go there for just one job a week.
Retail is definitely much more profitable, but your work has to be absolutely perfect. Your prep time increases dramatically because the bumpers have to be perfect with no sign it was ever damaged. Dealers didn't care that much about the results as long as you couldn't see anything walking up to the car. The salesman were experts at diverting any attention away from the areas that had been re-painted and if the customer did notice it, they would have some lame excuse that it was a "dye mark" or that there must have been a problem with the color mix when it was sprayed at the factory, etc. I was always amazed at how not a single one of these customers ever questioned the explanation given by the salesman!</HTML>
Shine On!
Rod Wesley
Touch Up 'N' Go!
Auto & Marine Appearance Center
We take your car from Rough to Buff!
Visit our website at: www.touchupngo.com
Retail is definitely much more profitable, but your work has to be absolutely perfect. Your prep time increases dramatically because the bumpers have to be perfect with no sign it was ever damaged. Dealers didn't care that much about the results as long as you couldn't see anything walking up to the car. The salesman were experts at diverting any attention away from the areas that had been re-painted and if the customer did notice it, they would have some lame excuse that it was a "dye mark" or that there must have been a problem with the color mix when it was sprayed at the factory, etc. I was always amazed at how not a single one of these customers ever questioned the explanation given by the salesman!</HTML>
Shine On!
Rod Wesley
Touch Up 'N' Go!
Auto & Marine Appearance Center
We take your car from Rough to Buff!
Visit our website at: www.touchupngo.com
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Re: Wholesale/dealer question November 01, 2004 01:26PM |
Registered: 17 years ago Posts: 499 |
<HTML>For sure Rod. I have actually never had a problem with changing UCM's but whenever it gets a little slower the bean counters start chopping and clean up is ALWAYS first to get hit. I have actively been trying to pursue the retail market over the last year more than ever and it is definitely the way to go if it can sustain you through the whole year. Problem is if the weather is bad (which it was last winter) the dealers can really save your ass when it snows or rains almost every day in January. Anyway, I am going to really start pushing the "lease return" inspection side of the business to fix damage before a car is returned. Big money there if we can start to capitalize on it and get the word out. One of my dealers just hammers their customers when they bring their cars back and it has any damage on it. Like fixing a door ding that we can fix for $100 and charging the customer $300 because they are stuck. My biggest thing right now is getting the shop set up to paint properly. I need to figure out exactly what the requirements are with respect to ventilation, paint booth etc.. and of course the most important issue - safety.</HTML>
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Re: Wholesale/dealer question November 02, 2004 12:26AM |
Registered: 17 years ago Posts: 382 |
<HTML>Scott-If I recall, you've got a Paint Bull paint system, right? If so, give them a call to see what kind of help they can give you in setting up the paint side of your business. I know here in the U.S., there's no special equipment or requirements regarding spraying as long as the area being painted is less than 9 s.f. If you get into larger repairs, then you need the downdraft spray booth which, as you know, can be very expensive. So, unless you want to get into painting whole cars or doing body shop type repairs, why not just keep it to the small touch-up stuff like bumper scuffs, paint chip repair, etc?
One thing you'll have to really be careful of is silicone if you're going to paint in the same building as you're detailing in. You may have to switch to body shop safe detailing products to avoid fisheyes in your paint.</HTML>
Shine On!
Rod Wesley
Touch Up 'N' Go!
Auto & Marine Appearance Center
We take your car from Rough to Buff!
Visit our website at: www.touchupngo.com
One thing you'll have to really be careful of is silicone if you're going to paint in the same building as you're detailing in. You may have to switch to body shop safe detailing products to avoid fisheyes in your paint.</HTML>
Shine On!
Rod Wesley
Touch Up 'N' Go!
Auto & Marine Appearance Center
We take your car from Rough to Buff!
Visit our website at: www.touchupngo.com
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Re: Wholesale/dealer question November 02, 2004 02:34PM |
Registered: 17 years ago Posts: 499 |
<HTML>I am actually heading down to Saginaw on Thursday to meet with Jason Zimostrad and maybe Fred Alverado regarding those very concerns. I am not getting into large reapirs because that is not the focus of what a "rapid repair service" is all about. However, the ministry of the environment here in Ontario is very strict with respect to regulating paint repairs so I want to make sure I won't run into any regulatory problems down the road.</HTML>
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