I have found myself asking this many times over my career in the bay and as a shop owner. This can be especially stressful if the customer’s car is on the lift and you have three other cars needing to get on that lift. Then just as you are getting ready to call the brick and mortar and see where the delivery driver was, he pulled into the lot with the part. Now I can install the part and get that car off the lift and the next one on. So, what is the importance of timely parts delivery and a great counter person. We as technicians are expected to diagnose the vehicle order the correct parts then install said parts then confirm the repair and release the vehicle to the customer. So, the only thing that is outside of your control is the correct part and its availability.
The Parts Counter
We all have a parts professional with which we have developed a trust. We know with confidence that they are going to get us the part while making sure it is correct for our application. I have worked with one main parts professional for the better part of the last fifteen years. He knows my preferences and when I am willing to wait for a specific component brand. Now that I don’t operate a shop daily, it is still convenient to know all I have to do is text him the vehicle application and the part I need and he will have it waiting for me to pick up. I am not saying I just blindly follow him. I still do review invoices and occasionally question a price. As a whole, I am very pleased with this relationship and if I were to open up a shop full time again I would expect the same treatment.
Business Plan?
So, why this article? Recently I was asked to consult a friend of mine that is considering purchasing a repair facility in a larger metropolitan area. This gentleman had operated a very successful repair facility five years ago before selling it and moving to a new area. He has now decided to look at purchasing a repair facility from an owner that is retiring. This location has 10 usable bays in a metro area that is seeing a revitalization of business and families moving in. The business location is at a busy intersection which is good although the building itself needs a facelift. We discussed the location as well as his plans for the building facelift and all things looked promising for the facility.
Then we started talking about staffing. Currently there are 6 qualified technicians, two service managers, a receptionist/bookkeeper, and a cleanup/delivery person. His concern was if it was properly staffed to be efficient. I said that, depending on his future plans, he might look into hiring an apprentice type technician from a local trade school or college especially since a couple of the techs were older and they may be looking to retire in the near future. Next, he asked my opinion on hiring a parts specialist. I asked what his idea was behind doing so. He said he had been looking at their last two months of repair bills and noticed a reoccurring theme. Several occasions the vehicle was brought in for diagnosis. If the repair was not a safety issue or hazard for the vehicle owner, they were rescheduled to come back an average of one week later to complete the repair. This rescheduling was mainly due to being overbooked on most days and just could not get the repair done without completely backing up the existing schedule. He compared the jobber price on the part at a retail store and the cost of that same product online. He determined that he could increase profit by 35 to 45 percent by ordering the part online. This is where the parts specialist position would be beneficial. They would be responsible for looking at the vehicle diagnosis and, in cooperation with the technician and service manager, determine if it could wait for two or three days before being repaired. If it was determined, the vehicle could wait, the parts specialist would order the part online from a reputable supplier that carried the same brand component as the local brick and mortar store. If not, then the part would be ordered from the local vendor. This parts specialist could also be the backup for the service managers when one of them was away from their desk.
Is It Smart Business?
Understand, this is currently a very successful repair facility and my friend believes there is room to update the processes to improve the bottom line. At first, being an old-school technician when it comes to the repair shop/parts store relationship, I had some concern. Together we sat down with the operation numbers from the last six months. After looking at the numbers proving the repair facility was a successful and profitable business, we then separated out the repair bills where the customer returned for the repair. After adding a conservative 30% to the parts total and then adding that back in, would the new position of parts specialist pay for itself? To my surprise, it could be justified. In fact because of the facilities customer base, the position would not only cover the employee expense but also increase the yearly bottom line by about 3-4%. So, I asked, what about the possibility of the wrong part or a failed part. How would the warranty of on-line parts be handled? He had thought of that and had already researched several on-line suppliers. Their return policy was very easy to get a refund or new part. If the part failure would cause undue stress to the customer relationship, they would just get the part from the local vendor. In this instance, they would lose the extra 30% but would still have the standard part markup. After much discussion, my friend is in the process of purchasing this business. I’ll keep you updated on his progress in future articles.
Could This Change The Industry
I have known for some time now that the continued auto part offerings on-line were going to change the industry, but was just not sure how. I thought it would first reduce the sales totals for the big box stores since the DIY customers would use on-line ordering more than the DIFM market. After sitting down with my friend and looking at actual operating numbers, it is definitely going to change the way the DIFM operates. However, I don’t believe this operating plan will work for all repair shops. The key thing that make this feasible for him is the customer base. They are already conditioned to waiting a couple days for the repair plus it is also a very established location. In some areas of the country, Amazon is offering same day delivery. This will lead to more DIFM shops going to on-line ordering. I am concerned for the smaller warehouse distributors since they don’t purchase in volume like the big 4. Their margin is a lot thinner. If the DIFM shops start to shift to more online ordering, we will see less individual WD’s and more consolidation.
But Online Doesn’t Have My Part, Or Do They?
I recently had to diagnose a malfunctioning blend door motor on a 1998 Oldsmobile 88, an oldie but it was in great shape and the owner liked the fact that it was paid for and had low miles. The problem was the electric blend door actuator was bad. I texted my local parts man and told him what I needed and gave him the actual numbers from the original motor. He called me back to make sure I had not given him the wrong number. I confirmed the number, and he told me that it did not cross to his product line even though it was a good GM number. I asked him to explain the part that his cataloging showed for my vehicle. After describing it, we found that his unit had the wrong number of pins in the electrical connector so it would not work. He then told me he had found the part on Amazon and it crossed to the original number and had the right number of pins in the connector. I ordered the part and received it two days later. The part was installed and it and solved the owner’s problem at a lower cost for the part. You may say, “Why would my parts man refer me to on-line?”. I think it’s because he is good at what he does and customer service is one of those things. I needed the part, and he could not supply it, so he sent me where I could get it.
Brick and Mortar Beware
Before you part stores fire up your email hate machine and dispute this coming change. Just think about how you run your business. Do you not look at every avenue to increase the year end bottom line black ink number? Then why would you expect any different from your customers? There will always be auto parts that only you can provide and there is no replacement for an educated counter person when it comes to finding that one of a kind specialty part. I just believe that in order for your store to survive, you will have to take a serious look at your current business and determine how you move forward. You may find ways to help your customer or offer training that the on-line suppliers aren’t. Customer service and having a good relationship with the repair facilities is going to be key. I don’t have the answer, but I do know one thing for sure. Change is coming in the auto parts industry. You can either accept it and change or stay the same and accept the smaller year end numbers.
Change is the law of life. And those who look only to the past or present are certain to miss the future.
-John F. Kennedy
By: Richard Young