Article

Service and Parts Profitability

June 2012, Auto Dealer Today - WebXclusive

by David Keller, CPA, CFE - Also by this author


Gross profit percentages are very important if you want to show a profit in the service and parts departments. You should set your minimum goals to achieve 70 percent for labor and 40 percent for parts. Accessories are normally priced somewhat lower, with a gross profit of approximately 10 percent to 30 percent, depending on what item is sold and what the competitive pricing is.

There are some who would argue you can’t afford to charge yourself retail rates for internal labor and parts. The difference between these gross profit percentages and what I see on some financial statements is normally immaterial to the vehicle gross profit when reviewing the averages for all repair orders.

To compute the labor rate you should charge, take your average labor hourly technician cost, including any incentives for hours or parts sold, and divide it by 30 percent (100 percent less the 70 percent gross profit you want to make) to arrive at the hourly labor rate you should charge yourself or others. For example, if your hourly pay is $15, then divide $15 by 30 percent to arrive at a $50 per hour labor rate. This will allow you to make a 70 percent gross profit on your labor charged.

To compute the parts retail price, you would use the same formula. For example, if your parts cost is $15, then divide $15 by 60 percent (100 percent less the 40 percent gross profit you want to make) to arrive at a $25 retail parts price. This will allow you to make a 40 percent gross profit on your parts sold. Most parts system setups use a markup method rather than a gross profit method. If this is the case, then you should use at least a 67 percent markup to achieve a 40 percent gross profit on your financial statement.

On repairs, you will normally have approximately $1 of labor charged for every $1 of parts sold. If so, you will average 50 percent to 55 percent combined gross profit on labor and parts sales. On maintenance-type work, there will normally be more labor and fewer parts, as you are basically running through a checklist to see what the vehicle needs.

What work should you sublet out? If you have the stalls and qualified technicians available, you want to do as much of the work yourself rather than give another shop the gross profit you would be making on the repair. You should try to maintain a 15 percent gross profit on any sublet labor you sell. This would include towing, tires, glass, etc.

I see many dealers who are subletting out repairs they could complete themselves. If you have the shop space, you should be completing these repairs yourself even if who you are using is cheaper. The reason is you will make some profit even at the cheaper price, which will go straight to the bottom line as profit and utilize unused shop space.

Accounting for all available labor hours versus the flat-rate hours turned will provide you with a technician efficiency report. The technicians should have two timecards. One is for clocking in normally at the start of the day, clocking out/in for lunch and clocking out at the end of the day. This timecard will track the total time the technician is on site. The second timecard is to track the hours charged to each repair order so the labor can be costed out and the hours turned can be charged to the appropriate sales account.

The difference between the total hours and the flat-rate hours generated is called unapplied time. The goal is to keep unapplied time to a minimum. Even though the technician may not be busy all the available hours, any differences should be documented on the repair order timecards so you know what they were doing when they had unapplied time. They could have been cleaning the shop or running for parts. If they are actually working but not on vehicles, then their time should be charged to an appropriate expense account and not unapplied time (a cost of sales account with no matching sale account).

Another tip is to not keep repair orders open for long periods of time. Close out the items you have completed and open a new repair order if you are waiting on parts. If you do so, then your sales and cost of sales will be more accurate each month and your internals will update the cost of your inventory much faster.

There is a great possibility of theft in the parts area. To protect yourself, use purchase orders and let your suppliers know they are required. The purchase orders should have the repair order number on them and also a stock number if you are repairing your own vehicle. A random review on a regular basis of purchase orders and the repair orders they are attached to will hopefully reduce the possibility of theft.

The parts department personnel should be completing mini parts physicals daily. If you take the number of bins you have in the parts department and divide it by the number of working days in the month, you will arrive at the number of bins you should be taking a physical inventory of daily and verifying the physical counts to the parts pad. You would then run the variance report monthly to see any differences you have encountered. By taking the physicals daily and your entire parts inventory monthly, you hopefully will catch problems before they get out of control. Parts shortages cut directly into your gross profits and should be minimized.

If you structure your parts and service departments to accurately track your sales and cost activity with adequate setups of minimum gross profits, you only have to worry about the volume of work you sell. That is up to you.

If anyone would like to receive a spreadsheet to calculate the lost gross profits on internals and the average increase per repair order by charging regular retail rates, please email me and I will send it to you.

Vol. 9, Issue 4

Comment

  1. 1. Bruce Gebhard [ May 14, 2014 @ 05:17PM ]

    Mr. Keller ... Just read your 2012 article ... Service and Parts Profitability ... and per your offer ... I would appreciate it if you would send me a spreadsheet to calculate the lost gross profits on internals and the average increase per repair order by charging regular retail rates. Thank You ... Regards, Bruce Gebhard

  2. 2. Bradley Foster [ May 19, 2014 @ 05:30AM ]

    I too would like to see the mentioned spreadsheet. Thank you! Great read!

  3. 3. Dan [ July 02, 2014 @ 06:23AM ]

    Great article......yes, please send me the spreadsheet you spoke about

  4. 4. Emily Sorensen [ July 21, 2014 @ 09:18AM ]

    Agreed...Please forward the said spreadsheet to me as well.
    Thank you

  5. 5. Brian Scott [ August 27, 2014 @ 06:17AM ]

    If the above mentioned spreadsheet is still being offered I would really appreciate it as well.

    Thanks,Brian

  6. 6. Eric Styons [ November 02, 2014 @ 05:43PM ]

    Great points in your article. If the spreadsheet is still available, I'd like to get a hold of it. Thank you.

  7. 7. Eric Styons [ November 02, 2014 @ 05:43PM ]

    Great points in your article. If the spreadsheet is still available, I'd like to get a hold of it. Thank you.

  8. 8. Bruce Carr [ November 03, 2014 @ 06:32AM ]

    Would you send me the spreadsheet for the internal rate. I have tried to change this for a year now.

  9. 9. Muhummed [ November 20, 2014 @ 08:00AM ]

    Great read David. Could you kindly send me the spreadsheet as well. Thank you.

  10. 10. Chris [ December 21, 2014 @ 06:11AM ]

    Could you please send me one to.

  11. 11. mark calvillo [ January 03, 2015 @ 11:51PM ]

    If that spreadsheet still available Please send me a copy

  12. 12. Philippe Gerling [ January 14, 2015 @ 08:56PM ]

    If this spreadsheet is available, please send me a copy.
    Thank you.

  13. 13. Dan [ January 19, 2015 @ 07:57AM ]

    Please send spreadsheet. Thank you

  14. 14. Alex [ January 27, 2015 @ 12:04AM ]

    Is the spreadsheet available

  15. 15. John [ January 29, 2015 @ 05:32PM ]

    Would love a copy of the spreadsheet

  16. 16. Brian [ March 01, 2015 @ 07:41AM ]

    Great article.. If that the spreadsheet is available, please email me a copy.
    Thank you

  17. 17. Jeff [ March 04, 2015 @ 11:22AM ]

    great article, would love a copy of that spreadsheet

  18. 18. Billy Milone [ March 04, 2015 @ 06:39PM ]

    Great article is right!! I would also love a copy of that spreadsheet. Thank you

  19. 19. cat [ March 20, 2015 @ 07:53PM ]

    I would like to have the spreadsheet too.plese

  20. 20. Nick Bradick [ March 23, 2015 @ 02:04AM ]

    Excellent article and would love a copy of your spreadsheet.

    If anyone would like to receive a spreadsheet to calculate the lost gross profits on internals and the average increase per repair order by charging regular retail rates, please email me and I will send it to you.

    Nick

  21. 21. Joe Willey [ March 23, 2015 @ 08:04AM ]

    would you please send me a copy of the spread sheet

  22. 22. Abhi Khurana [ April 21, 2015 @ 11:53PM ]

    would you please send me a copy of the spread sheet as well.

  23. 23. Abhi Khurana [ April 22, 2015 @ 12:24AM ]

    I would like a copy of spreadsheet as well. Please and Thank You .

  24. 24. mike [ April 23, 2015 @ 05:31PM ]

    I will take one as well thanks

  25. 25. Mike botelho [ April 23, 2015 @ 09:10PM ]

    Thanks

  26. 26. Mike botelho [ April 23, 2015 @ 09:10PM ]

    Good info.

  27. 27. Larry Ackerman [ April 24, 2015 @ 04:37AM ]

    please send me a copy of your spread sheet

  28. 28. Larry Ackerman [ April 24, 2015 @ 04:38AM ]

    Please send me a copy of your spread sheet

  29. 29. Krystal Munday [ May 05, 2015 @ 04:27PM ]

    Please send me a copy of your spread sheet. Great Read. Thanks

  30. 30. jason [ May 25, 2015 @ 11:15AM ]

    Please send me a copy of your spreadsheet. Great article!

  31. 31. Brigette Rowlands [ May 26, 2015 @ 01:23AM ]

    Good Day David
    I am currently doing my MBA on Parts and Service and would appreciate any information you can share with me
    Regards
    Brigette
    South Africa

  32. 32. Eddie C. [ June 04, 2015 @ 06:30AM ]

    Please send me a spread sheet, thanks!

  33. 33. Jack A Rollens JR [ June 12, 2015 @ 10:42AM ]

    Great article, Please send me a copy of your spreadsheet.

    Thank you

  34. 34. Fahad [ June 19, 2015 @ 11:42PM ]

    Great article, Please send me a copy of your spreadsheet. Thanks

  35. 35. T.C Coleman [ July 07, 2015 @ 08:01AM ]

    Great article please send me a copy. Thanks!

  36. 36. Tina Richard [ July 07, 2015 @ 10:16AM ]

    Please send me the spreadsheet

  37. 37. Kevin Hurley [ July 12, 2015 @ 09:13PM ]

    Thank you please send me a spreadsheet

  38. 38. Iona brightman [ July 20, 2015 @ 09:54AM ]

    Thank you, please send me the spreadsheet.

  39. 39. Matt H. [ August 07, 2015 @ 09:51PM ]

    Excellent article. Nice to get a different Perspective on things. Add me to the spreadsheet list please!

  40. 40. Christian [ August 21, 2015 @ 05:41PM ]

    GREAT ARTICLE, PLEASE SEND ME THE SPREADSHEET AS WELL

  41. 41. Richard Chase [ August 23, 2015 @ 05:32PM ]

    Mr Keller, I just read your article on Service And Profitability on Auto Dealer Today. it was a good article. I would like for you to send me a spreadsheet if it is still available.

  42. 42. Nathan Snyder [ August 25, 2015 @ 06:14AM ]

    Well said. Please send me the spreadsheet as well.

  43. 43. Joshua Bagley [ September 09, 2015 @ 08:19AM ]

    I would like for you to send me a spreadsheet if it is still available.

  44. 44. Rashmi [ October 07, 2015 @ 01:08AM ]

    Please send me the spreadsheet if still available.

  45. 45. Stephanie Winn [ October 10, 2015 @ 09:22AM ]

    Please send me the spreadsheet also. Thank you so much!

  46. 46. Jackie King [ October 21, 2015 @ 05:48AM ]

    Could you send me the spreadsheet please? Thank you very much.

  47. 47. randy smith [ October 21, 2015 @ 12:52PM ]

    I am very interested in the internal parts spreadsheet, to help determine parts markups and margins for used car -internal repairs in our dealership.

  48. 48. Laura Moyers [ October 31, 2015 @ 07:37AM ]

    I would like a copy of the spreadsheet referenced in your atricle. Thank you!

  49. 49. Ryan robison [ November 02, 2015 @ 08:08PM ]

    Please send my way!

  50. 50. Kim Minton [ November 17, 2015 @ 11:24AM ]

    I would like this spreadsheet also. Thank you

  51. 51. Justin Harris [ November 18, 2015 @ 12:04PM ]

    Please send me spread sheet. Thank you!

  52. 52. Mahesh Salvi [ December 02, 2015 @ 12:36AM ]

    Excellent article. Nice to get a different Perspective on things.

    Kindly send me the spreadsheet, thanks in advance

  53. 53. Dexter Cain [ December 09, 2015 @ 05:46PM ]

    Please send me spread sheet. Thank You!

  54. 54. Thomas Montefusco [ December 27, 2015 @ 08:47PM ]

    Happy Holiday's Please send me the spreadsheet. Thanks so much!

  55. 55. RAMSEY [ December 28, 2015 @ 12:06PM ]

    Happy Holiday's Please send me the spreadsheet. Thanks so much!

  56. 56. Frank s [ January 06, 2016 @ 06:21PM ]

    Please send my way as well , thank yoi

  57. 57. Sherri [ January 08, 2016 @ 12:42PM ]

    I would like a copy as well please

  58. 58. Andy white [ January 19, 2016 @ 07:40PM ]

    I would like a copy also

  59. 59. Andy white [ January 19, 2016 @ 07:42PM ]

    Copy of the spread sheet please

  60. 60. Carien [ January 22, 2016 @ 10:26PM ]

    Can you also email me

  61. 61. Tigh pesicka [ January 23, 2016 @ 07:22PM ]

    Please email me as well thank you

  62. 62. John R Torres [ February 09, 2016 @ 03:40PM ]

    Please email to me the spreadsheet - I would be very much appreciated !

  63. 63. Starr [ February 10, 2016 @ 11:00PM ]

    Is it to late to get a copy of the spreadsheet? That would be cool. Thank You

  64. 64. Chris Pearce [ February 12, 2016 @ 07:28AM ]

    I would like to have this spreadsheet please.

  65. 65. Ryan Allen [ February 14, 2016 @ 10:46AM ]

    I would like to look at the mentioned spreadsheet. Thanks

  66. 66. Marla [ February 22, 2016 @ 11:36PM ]

    If I could receive the mentioned spreadsheet that would be awesome. Not only would it give personal gain but I would love
    to prove the point that not every spreadsheet created helps when it comes to automotive shops..

  67. 67. toby [ February 24, 2016 @ 02:40PM ]

    I would like to see your spread sheet also thanks.

  68. 68. Ray Fajardo [ February 24, 2016 @ 02:52PM ]

    If you could e-mail the mentioned spreadsheet it would be appreciated, Thanks

  69. 69. Rob [ February 26, 2016 @ 08:21PM ]

    I would like to see the spreadsheet if it's still available.

  70. 70. ZK [ March 02, 2016 @ 08:56PM ]

    If possible may I have the spreadsheet too? Much appreciated, thank you.

  71. 71. SHANKARRAMAN [ March 05, 2016 @ 08:26AM ]

    Excellent, can you kindly share me the spreadsheet.

  72. 72. BRANDON BINGHAM [ March 06, 2016 @ 12:50PM ]

    Please send the spreadsheet. Thank you very much!

  73. 73. Allen Grim [ March 11, 2016 @ 11:30AM ]

    Please send spreadsheet. Thank you

  74. 74. Caryn Sanborn [ March 12, 2016 @ 01:08PM ]

    Can you please send me that spreadsheet as well!
    Thank you

  75. 75. Caryn Sanborn [ March 12, 2016 @ 01:12PM ]

    I would like the spreadsheet as well! Thx

  76. 76. Connie Mundy [ March 22, 2016 @ 01:19PM ]

    I would like the spreadsheet
    Thank you

  77. 77. Claude Chiles [ March 22, 2016 @ 01:32PM ]

    I also would love a copy of the spread sheet

  78. 78. jeremy artus [ March 30, 2016 @ 09:25PM ]

    I would like to have a copy of the spread sheet.

  79. 79. Larry Spencer [ April 03, 2016 @ 10:13AM ]

    Please add me to the list of spread sheets

  80. 80. Colby Willis [ April 07, 2016 @ 06:14AM ]

    I would like a copy of your spread sheet as well.

  81. 81. michael [ April 12, 2016 @ 01:44PM ]

    I also would love a copy of the spread sheet

  82. 82. George W [ April 13, 2016 @ 12:14PM ]

    Awesome Article. WOuld love a copy of the spreadsheets as well

  83. 83. Sean moore [ April 17, 2016 @ 12:52PM ]

    Great info. Would greatly appreciate the spreadsheet

  84. 84. Brian [ May 14, 2016 @ 09:17AM ]

    If still available. I would love a copy of the spreadsheet. Thank you in advanced

  85. 85. Bryan Marino [ May 15, 2016 @ 02:29PM ]

    Please send the spreadsheet. Thank you very much!

  86. 86. Joe [ May 16, 2016 @ 01:08PM ]

    Yes if still available please send me a copy of the spreadsheet. Thank you and enjoyed your article.
    Joe

  87. 87. Jimmy [ May 31, 2016 @ 08:22PM ]

    Would like a cooy of the spreadsheet.

  88. 88. Jimmy [ May 31, 2016 @ 08:22PM ]

    Would like a copy of spreadsheet.

  89. 89. jim minnig [ June 04, 2016 @ 02:29PM ]

    i would also appreciate a copy of thar spreadshhet. thank you

  90. 90. paul a [ June 08, 2016 @ 12:27PM ]

    If still available. I would love a copy of the spreadsheet. Thank you in advanced

  91. 91. paul a [ June 08, 2016 @ 12:27PM ]

    If still available. I would love a copy of the spreadsheet. Thank you in advanced

  92. 92. Rj [ June 11, 2016 @ 10:17AM ]

    I'd love to see the spreadsheet

  93. 93. Bryce D. [ June 16, 2016 @ 11:48AM ]

    I'd love a copy of the spreadsheet

  94. 94. Scott [ June 20, 2016 @ 07:19AM ]

    I hope you are still offering that spreadsheet. Please send if possible. Thanks and good article that gets to the meat of serv/pts deps....

  95. 95. Mary Espejo [ June 21, 2016 @ 09:32PM ]

    Aloha
    Yes the article was informative. I would like to get your input on an unapplied time issue that has been ongoing for several years at our dealership. If you could contact me by email, I can explain in more detail.

    Thanks

  96. 96. Ian [ June 26, 2016 @ 06:58PM ]

    Great article. Could you send me a copy of the spreadsheet. Thank you in advance.

  97. 97. AmandaS [ July 11, 2016 @ 07:49AM ]

    Great article!! Would love the spreadsheet you are offering.

  98. 98. Bill Hickok [ July 21, 2016 @ 08:29AM ]

    Would appreciate a copy of the spreadsheet. Thank you.

  99. 99. Christina M. [ July 30, 2016 @ 07:11PM ]

    Great article! Please send me spreadsheet. Thank you!

  100. 100. Christina M. [ July 30, 2016 @ 07:12PM ]

    Great article! Please send me a copy of spreadsheet.

  101. 101. stathis [ August 06, 2016 @ 04:56PM ]

    Would appreciate a copy of the spreadsheet. Thans a lot!

  102. 102. Brandon Smart [ August 07, 2016 @ 06:35AM ]

    Please send me a copy of your spreadsheet.

  103. 103. Larisa [ September 02, 2016 @ 03:52AM ]

    Good article...Please may you send me a copy of the spread sheet.

  104. 104. Katie S. [ September 08, 2016 @ 11:50AM ]

    Interested in a copy of the spreadsheet.

  105. 105. Katie S. [ September 08, 2016 @ 11:51AM ]

    Interested in a copy of the spreadsheet

  106. 106. loren moss [ September 10, 2016 @ 05:44AM ]

    Yes please send me the spreadsheet also thank you

  107. 107. loren moss [ September 10, 2016 @ 05:45AM ]

    Yes please send me the spreadsheet also thank you

  108. 108. loren moss [ September 10, 2016 @ 05:45AM ]

    Yes please send me the spreadsheet also thank you

  109. 109. loren moss [ September 10, 2016 @ 05:48AM ]

    I was wondering what is a more important factor to your service department overall profitability gross profit percentage or your effect of labor rate and why

  110. 110. Shen Yim [ September 11, 2016 @ 10:36AM ]

    Thanks for the efficient and effective article. Please email a copy of the spreadsheet.

  111. 111. Patti Molinari [ September 21, 2016 @ 05:46PM ]

    thanks and please send me the spreadsheet

  112. 112. Jack Crowder [ September 23, 2016 @ 11:42AM ]

    I would be interested in seeing the spreadsheet you have mentioned in this article. please send me a copy.

  113. 113. Joe [ October 12, 2016 @ 02:07PM ]

    Mr. Keller,

    Great summation - If your spreadsheet is still available, I would appreciate receiving a copy of it.

  114. 114. Jim [ October 13, 2016 @ 01:32PM ]

    I also would be interested in seeing the spreadsheet. So many variables play into the whole process anymore, it would be nice to see if we are missing anything. If you could email me a copy that would be wonderful. Thanks

  115. 115. Gary [ October 19, 2016 @ 10:25AM ]

    Please send the spreadsheet if still available, good stuff here

  116. 116. Arnon [ October 26, 2016 @ 01:28AM ]

    Was breaking my head looking for a solution, and you have a simple one. Possible to receive your spreadsheet?
    Many thanks in advance.

  117. 117. Andy Andrews [ October 29, 2016 @ 01:14PM ]

    Spreadsheet please!

  118. 118. Aaron [ November 06, 2016 @ 09:53AM ]

    Great article, may I please get a spreadsheet

  119. 119. Aaron Fleming [ November 06, 2016 @ 09:54AM ]

    Great article, may I get a spreadsheet please

  120. 120. Godfrey J February [ November 13, 2016 @ 11:37PM ]

    Your article is worthwhile reading and will appreciate a copy of a spreadsheet as requested by others also.

  121. 121. Terry Mertens [ November 14, 2016 @ 09:22AM ]

    Please Sent the spreadsheet as well. Thanks!

  122. 122. Len Ganim [ November 15, 2016 @ 03:54AM ]

    Please send me the spread sheet.

  123. 123. Len Ganim [ November 15, 2016 @ 03:55AM ]

    Please send me the spreadsheet.

  124. 124. Glen [ November 18, 2016 @ 02:02AM ]

    I would appreciate a copy of a spreadsheet if it is available

  125. 125. luke payne [ November 30, 2016 @ 08:37PM ]

    I would also like a copy of the spread sheet please sir and thanks

  126. 126. john [ December 14, 2016 @ 04:41AM ]

    I would like a copy please if possible. Thanks

  127. 127. John [ January 13, 2017 @ 01:01PM ]

    This is rather amateurish.Shops no longer base their shop rates on a technicians prevailing wage.Ethical trade standards are 100-150% labor cost markup or the tech should be paid 40-50% of the stated shop rate.Factory parts are only marked up to about 30% and the difference between wholesale and retail on aftermarket parts is only up to about 100%.We are seeing shops charge $158 an hour and paying rookie techs $20 an hour to do the work.This is an 800% labor cost markup to the customer instead of the ethical trade standard of 100-150% for a well trained experienced tech.Many reputable shops pay the techs a minimum of 40% of the shop rate and are doing quite well.

  128. 128. John [ January 13, 2017 @ 01:15PM ]

    I have read surveys and most customers expect that the technician working on their vehicle is being paid 35-50% of the shop rate they are paying.If they are paying $158 an hour they would expect that a 64 year old German scientist to be doing the work and not a 20 year old kid getting started.It is a bit like he is saying though if you are paying a tech $15 an hour and charging $50 is on the very high side but charging $128 is thievery and unjustifiable.

  129. 129. John [ January 13, 2017 @ 01:46PM ]

    This guy is a little more on the ball and his stuff actually shows an increased profit at a higher pay level attracting more talented and productive techs.We have managers setting the highest shop rate their area will allow then trying to dictate lower wages to the techs or only hiring those that accept a low wage trying to increase margins in a very unethical way.40%-50% of the stated shop rate or a 100-150% labor cost markup is very effective and ethical to the techs,the trade and the customers. http://www.nmeda.com/wp-content/uploads/2013/07/pbt-11-2013-Effective-Pay-Plans.pdf

  130. 130. John [ January 13, 2017 @ 02:23PM ]

    "Send me a spreadsheet."I wouldn't you dummies manage an ice cream shop!

  131. 131. John [ January 13, 2017 @ 02:46PM ]

    You're the types that put an ad out for a Master Certified Transmission specialist $10 an hour and watch it run for 7 years.I watched an ad offering $45 an hour run for a diesel/trans guy run for over a year before they finally figured they should raise it to $50.

  132. 132. John [ January 13, 2017 @ 02:55PM ]

    Massive technician shortages pending and looming and all the industry experts are saying more changes in the next 5 years as in the last 50 so every dealer in the country is now looking for techs that will work for $15 an hour flat rate and do warranty work for free.

  133. 133. John [ January 13, 2017 @ 10:11PM ]

    How does this work when factories extend warranty periods,sell extended service contracts,cut warranty times and the dealer cuts the techs hourly rates to increase percentages to makes up for it?Voila,no more techs!

  134. 134. John [ January 13, 2017 @ 10:31PM ]

    What is 30% of zero?

  135. 135. John [ January 13, 2017 @ 10:36PM ]

    I have an idea!Since service writers are averaging 20k more per year than the techs,why don't we make them buy portable phones and a box of tools?

  136. 136. John [ January 13, 2017 @ 10:47PM ]

    Hey,did you hear about Doug Grooms?You really wouldn't think there would be half a million to steal from a tiny dealer.

  137. 137. Howard [ January 28, 2017 @ 06:39AM ]

    This is a very informative article. Please email me your spreadsheet

  138. 138. Nazimuddin. A [ February 18, 2017 @ 09:06PM ]

    Hi. the topic is very good and useful to me and pl try to send me the spreadsheet.

  139. 139. Mark [ March 19, 2017 @ 02:16PM ]

    I would like a copy of the spreadsheet as well. I do have a question...We recently change CFO's and now they are taking the journeymen and hourly employees and putting the unapplied labor together on the financial statement which is incorrect. I understand that the hourly employees should be tracked, however it's not apples to apples. You have a skilled journeyman booking big jobs and hourly employees performing lof's rotates, free install on wiper blades...and so on. Plus the hourly employees are cleaning and doing other tasks around the shop. How do some of your store accountants handle this? Thank you

  140. 140. anil kumar singh [ April 06, 2017 @ 04:20AM ]

    hi please send me the spreadsheet

  141. 141. Cheri [ April 08, 2017 @ 02:26AM ]

    I am interested in your spreadsheet- thanks

  142. 142. Franz [ April 26, 2017 @ 02:54AM ]

    Please email me your spreadsheet.

  143. 143. Nicole M Alt [ May 09, 2017 @ 11:23AM ]

    Please email me your spreadsheet

  144. 144. Denis [ May 10, 2017 @ 09:30PM ]

    Please email you spreadsheet to me.
    This would be much appreciated.

  145. 145. Bill Winkler [ May 14, 2017 @ 06:30PM ]

    I would like the spreadsheet as well

  146. 146. Bob Benning [ May 16, 2017 @ 07:44AM ]

    Please send me your spreadsheet. This is a topic I am dealing with presently. Thank you.

  147. 147. Siamak Mahdaavi [ May 24, 2017 @ 08:06AM ]

    Dear Sir,

    I found it interesting. Would you please send me the spreadsheet, as well.

  148. 148. Jerry Smith [ June 08, 2017 @ 05:51AM ]

    It's called SERVICE, not SALES. You stick it up customers asses every chance you get.

  149. 149. Jason Davis [ June 12, 2017 @ 08:56PM ]

    We are currently fighting this situation. I would love to have a copy of the spreadsheet!

  150. 150. Jason Davis [ June 12, 2017 @ 08:57PM ]

    I would also like a copy of this spreadsheet please.

  151. 151. M.G. [ June 20, 2017 @ 08:47AM ]

    Fascinating. Please email me your spreadsheet.

  152. 152. Marc Sempert [ June 20, 2017 @ 01:36PM ]

    I would like a copy of your spreadsheet.

  153. 153. John [ June 23, 2017 @ 04:30PM ]

    I would like a copy of your spreadsheet and the article about internal labor rates vs customer labor rates

  154. 154. Kenny [ June 27, 2017 @ 04:04PM ]

    I would like a copy of the spreadsheets as well. Thank you.

  155. 155. John [ June 29, 2017 @ 08:08AM ]

    Do you idiots not see this as price fixing?He is not suggesting more than doubling the cost of parts or keystoning and MSRP's are never over 100% of cost but suggesting over tripling the cost of the technicians labor minimum.No other service trade more than doubles the cost of labor especially on a commission or flat rate basis.Even a pet groomer will get 50% or more of the labor charged to the customer.I have been seeing shops charging $160 shop rate and trying to pay the tech $20 this is 700% over cost and absolute gougery.What you are paying the techs justifies your shop rate and anything over doubling the cost is and always has been considered very unethical especially on labor!The mark up standards on parts has never changed but the techs working 50/50 or better has been blown to shreds and unprecedented in any other skilled trade and a HUGE disservice to the customer!

  156. 156. John [ June 29, 2017 @ 08:33AM ]

    What is really unusual about this as it mentions labor totals and parts totals are usually about equal with a GPM of 50% on both.You can't control suppliers or the cost of parts and are ethically passing savings to the customer with fixed percentages that are within reason but go into a completely new realm on labor which you feel that you should be able to control and fix with exorbitant mark ups.What kind of people?

  157. 157. John [ June 29, 2017 @ 08:38AM ]

    I guess that it just wouldn't be fair to the crap Chinese parts to more than double their cost.

  158. 158. John [ June 29, 2017 @ 10:06AM ]

    Price-fixing schemes are often worked out in secret and can be hard to uncover, but an agreement can be discovered from "circumstantial" evidence. For example, if direct competitors have a pattern of unexplained identical contract terms or price behavior together with other factors (such as the lack of legitimate business explanation), unlawful price fixing may be the reason.

  159. 159. John [ June 30, 2017 @ 04:23PM ]

    This explains why I've had 39 identical offers from 40 resumes within minutes after emailing them.

  160. 160. John [ June 30, 2017 @ 04:26PM ]

    Guess what the hardest positions to fill in the U.S. and 42 other countries are?

  161. 161. Don Lehocky [ August 07, 2017 @ 12:28PM ]

    Nice article. Could you please email me the spreadsheet if it is still available. I use one, but wanted to see yours and may be better.

  162. 162. ed [ August 10, 2017 @ 04:12PM ]

    I learned more from John than from everything else.

  163. 163. Dan [ August 23, 2017 @ 08:01AM ]

    Great article. I am new to the industry and this has opened my eyes. Can you please send the spreadsheet if it is still available and any other information you have.

    Kind regards,

    Dan

  164. 164. Bill Salmon [ September 27, 2017 @ 07:05PM ]

    Would you kindley forward those spreadsheets, thanks.

  165. 165. Howard Brown [ October 01, 2017 @ 09:39AM ]

    would love a copy of your spread sheet...Your thoughts:..What typically should the gross profits%'s be on mechanical labor and warranty labor..

  166. 166. John [ October 13, 2017 @ 03:46PM ]

    You idiots are guilty of a felony.Why aren't you discussing improving net profit margins instead of continually trying to increase gross profit margins?"But forming a trade association does not shield joint activities from antitrust scrutiny: Dealings among competitors that violate the law would still violate the law even if they were done through a trade association. For instance, it is illegal to use a trade association to control or suggest prices of members. It is illegal to use information-sharing programs, or standardized contracts, operating hours, accounting, safety codes, or transportation methods, as a disguised means of fixing prices."

  167. 167. John [ October 13, 2017 @ 03:54PM ]

    I can give you morons examples of many auto repair shops operating quite nicely off 50% or less labor GPM's,infact I have a list of many skilled trades and their average GPM's of about 25%!

  168. 168. John [ October 13, 2017 @ 03:58PM ]

    Do you freaking idiots think the customers paying you $150 an hour to find the lowest paid idiot that you can possibly find to repair their expensive vehicles?

  169. 169. John [ October 14, 2017 @ 10:27AM ]

    Your "suggested"70% minimum GPM on labor is over twice what anyone would consider ethical as a consumer or as a skilled employee with a serious amount of money invested in tooling.It has been going several hundred percent more than this and the time books are cooked!."Labor costs are commonly marked up 200-250 percent. This is necessary to cover labor-related administrative costs, the costs of FICA taxes and other expenses. The owner's salary, which typically includes time spent for bookkeeping, calling on clients and other business-related activities, may also be included in the hourly labor charge on a prorated basis.

  170. 170. John [ October 14, 2017 @ 10:48AM ]

    There is essentially no cost benefit relay to the customer if a $10 an hour kid does the work and you are charged $150 an hour no matter who does the work.This is only a 1,500% markup instead of just doubling the cost.They may only get 5% on major components.You are fixing the shop rates and the labor wages.Bring your lunch pails and fix them yourselves!Hardest to fill position in 42 countries for over 4 years.Your running out of morons to screw over!

  171. 171. John [ October 14, 2017 @ 11:01AM ]

    I can show you an employment ad for every dealer in the country and and particular dealer that has been looking for a certified Trans tech for 7 freaking years.If that doesn't make you feel delusional.You idiots were screaming shortages in the middle of the recession and discussing cutting their wages in half again!

  172. 172. John [ October 14, 2017 @ 11:09AM ]

    200,000 diesel techs needed over the next 10 years,you are only graduating 3,500 per year now,most of them will quit and we are going very high tech.They are expecting food shortages because you creeps are blowing all the talent out of town!

  173. 173. John [ October 14, 2017 @ 11:14AM ]

    I get it,it's online sales cutting into my freaking pay again!

  174. 174. John [ October 14, 2017 @ 11:24AM ]

    Did I mention that it will take ten years and maybe 200k in training and tools to develop a good replacement and that's only if they make four times as much?

  175. 175. John [ October 14, 2017 @ 11:34AM ]

    We have autonomous driving hydrogen fuelcell cars and trucks with processors as fast as the ten fastest supercomputers,hundreds of millions lines of code,Mars rover technology and bicycle mechanic pay.I can fix your flat bicycle tires for free just as well!

  176. 176. John [ October 14, 2017 @ 11:40AM ]

    "Where's the F&I guy?"He's out back trying trying to fix a LiDAR mapping system in the rain.

  177. 177. Sundar [ October 23, 2017 @ 05:26AM ]


    please share y6our spreadsheet. Thanks

  178. 178. John [ October 29, 2017 @ 06:26AM ]

    This article is evidence of criminal Wage and Price fixing you morons and anything over 50% GPM's on anything are completely unjustifiable.You might only get 5% on an engine but think you should charge the customer 500% markup minimum on the labor?Dumb!

  179. 179. John [ October 29, 2017 @ 06:36AM ]

    Ethically,you would be running a pretty tight ship at 45% GPM on technician labor!

  180. 180. John [ October 29, 2017 @ 06:44AM ]

    Just screw everyone on the labor and this is how you mysteriously get a total GPM over 50%."If so, you will average 50 percent to 55 percent combined gross profit on labor and parts sales."

  181. 181. John [ October 29, 2017 @ 07:03AM ]

    You should start marking sublet repairs up 800% and show no cost relationship between what you pay and what you charge.

  182. 182. John [ November 07, 2017 @ 07:13PM ]

    What do you wage fixing morons think that "one way" could be?"A nationwide survey by Carlisle & Co. recently found that technicians are miserable — so miserable that almost a quarter of them left their dealerships last year. Another 25 percent left the industry altogether. Unstable pay and feeling undervalued were major reasons. MIT labor economist Tom Kochan says there’s one way to change that."

  183. 183. John [ November 16, 2017 @ 12:40PM ]

    Would you mind emailing me a copy too please?

  184. 184. John [ November 16, 2017 @ 12:51PM ]

    The proper way to increase your GPM's is to do it your freaking selves like me.

  185. 185. John [ November 16, 2017 @ 01:01PM ]

    Have you ever thought about getting into the bicycle business?"A nationwide survey by Carlisle & Co. recently found that technicians are miserable — so miserable that almost a quarter of them left their dealerships last year. Another 25 percent left the industry altogether. Unstable pay and feeling undervalued were major reasons. MIT labor economist Tom Kochan says there’s one way to change that."

  186. 186. John [ November 16, 2017 @ 01:04PM ]

    Isn't an 8 year apprenticeship somewhat like a PhD?

  187. 187. John [ November 16, 2017 @ 06:09PM ]

    "You should try to maintain a 15 percent gross profit on any sublet labor you sell. This would include towing, tires, glass and various other repair operations."

  188. 188. John [ November 16, 2017 @ 06:58PM ]

    "Parts shortages cut directly into your gross profits and should be minimized but the shortage of techs and outrageous markups will wipe you out."

 

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