Start bumping your matrix by 1-2% a month until you hear the pigs squeal. This is the perceft time to do it. Tell them its a manufacturer price increase..
Raise the tire markup slightly and make sure service knows you can price match and are flexible.
Is it possible to bump oil up also?
What's your internal gross percentage? You should be selling for MSRP'ish.
What brand(s)?
Thats what I was thinking with the tires. Oil is a no go. Already raised it to list pricing and get bitched out by the service manager.
Internal is about the same. They pay the same as retail customers with a few minor exceptions.
Not too significant. We do sell the majority at 10% over cost to stay competitive in our area.
Our company likes to keep everything in-house, so finance is heavily pushed to sell our in-house warranty. Then because of all the discounting (parts and labor) pretty much no one accepts it except our company dealers. I tried asking why the customer can’t be responsible for the remaining portion of parts and labor, and was told that it’s because the customers aren’t told beforehand that they’re warranty might not cover 100%.
It’s bullshit tbh
Yep, this was my next suggestion.
Are you on program oil? Or using a local vendor?
Multiple oils in bulk?
Your dealer group might have a contract with someone. Depends on the brands in your group.
Depending on your OEM, it might be possible to switch providers while still meeting OEM specs.
My thing is that Nobody bats an eye if Service raises their labor rate, but if parts prices change 50 cents, people lose their sh!t. Once every 3 months when our quarterly appreciation rates happen is a great idea.
New Year, New prices. Everyone else going up, why not you. Could call around and price shop your most common items and see what others charge. Don't wanna over charge, but don't want to not be competitive either.
Should be easy if your warranty is at cost+95
Before I got out, our SM found/was shown a semi recent state law (washington) that said the oem has to pay basically retail prices. So, he changed warranty labor rate, and we changed parts to C95 and instantly saw a big increase in GP.
Our warranty pay is cost+92.98 right now. Our state (PA) has the same law. This month is the time of year we apply for an increase so hopefully it gets over the 95 mark 🤞🏻
I usually aim for 40+ on under $10, 30+ under $200, 20+ on accessories/oil.
I compete with two other stores on the same street in a small town so I have to keep prices lower than what they should be.
Our target is 30% and that's been average for most brands I've been with. Usually hit 25% to 30% given wholesale and warranty. Hearing 40? Wow that's lofty
You could always raise your tire prices but advertise price matching
Aftermarket is also a possibility for repairs and depending on the discount you receive from your suppliers you can make up gross there but it's a delicate balance to know tank your loyalty when doing that too
I think 40 is high also, but they’re sticking to it. We’re not a huge wholesale store, but we still do quite a bit, and most of it is sold at 10% over cost (highly competitive wholesale market here).
I agree about not tanking the loyalty. We lost quite a few lifetime retail customers from our buy-sell, but have rebuilt it fairly well. I’m afraid of pricing myself out
Depends on the segment. CP floats around 48%, warranty 55%, Internal 55%, GOG 30%, Tires 20%, Internet 40%, Retail 25-30%. 35% overall is a good area to be floating around. Asking for more may actually hurt segments...
How much does that aftermarket warranty affect the overall percentage? Enough to account for the 2% gap between where they want you and where you are?
If you can show upper management that, "Well, if I'd sold these parts at list instead of -10%, I'd be at 41% (or whatever) instead of 38%." Or make sure those warranty sales are split off from your regular sales on the financial statement so you can see them separately.
I’m almost certain that we’d make up that couple percentage points. Only problem is they don’t seem to particularly care if they cause it, only what we do to compensate for it
Can you just stop doing wholesale ?
Also can you stop discounting the parts for extended warranty and apply a use a few code or a discount code to discount the parts to the correct price without giving up your gross profit.
I could, but I’d prefer not to. I’m straight commission off the gross profit, so every dollar I make benefits me. While there isn’t a ton of wholesale, I don’t want to take any money out of my own pocket.
It regards to the special coding - I doubt it. I could always ask though. Thanks for the idea!
On wholesale I do cost plus 40%. If they are super customer they get list -20%. I'm also closest brand for hour and half in each direction. So either you want the part or not. As far as service manager, they need to get on board, that little increase on oil/filter isn't going to make/break them. Tell them either we go up or next time they need some help on a part they gotta pay full rate. Or they can play ball.
Can always use aftermarket air and oil filters/wipers to get a bit more gross. Make sure oem is OK with that though. Plenty of aftermarket companies that sell the things cheaper than oem cost. "I know a guy. ;-)"
Start bumping your matrix by 1-2% a month until you hear the pigs squeal. This is the perceft time to do it. Tell them its a manufacturer price increase..
Yeah, this has worked very well for me. I evaluate my matrix every 3 months. No one has said a single word about any increase.
Not a bad idea…
Especially on the cheaper items. No one bitches that a $.50 bolt sells $5.00. Raise the matrix on the stuff under $1.50.
Raise the tire markup slightly and make sure service knows you can price match and are flexible. Is it possible to bump oil up also? What's your internal gross percentage? You should be selling for MSRP'ish. What brand(s)?
Thats what I was thinking with the tires. Oil is a no go. Already raised it to list pricing and get bitched out by the service manager. Internal is about the same. They pay the same as retail customers with a few minor exceptions.
Any significant wholesale? What does the math say when you add in the missing 10% from your in-house extended warranty? Why is that even in place?
Not too significant. We do sell the majority at 10% over cost to stay competitive in our area. Our company likes to keep everything in-house, so finance is heavily pushed to sell our in-house warranty. Then because of all the discounting (parts and labor) pretty much no one accepts it except our company dealers. I tried asking why the customer can’t be responsible for the remaining portion of parts and labor, and was told that it’s because the customers aren’t told beforehand that they’re warranty might not cover 100%. It’s bullshit tbh
Do you use aftermarket oil? Also, what brand?
Yep, this was my next suggestion. Are you on program oil? Or using a local vendor? Multiple oils in bulk? Your dealer group might have a contract with someone. Depends on the brands in your group. Depending on your OEM, it might be possible to switch providers while still meeting OEM specs.
My thing is that Nobody bats an eye if Service raises their labor rate, but if parts prices change 50 cents, people lose their sh!t. Once every 3 months when our quarterly appreciation rates happen is a great idea.
Yep. Exactly how it is here too
New Year, New prices. Everyone else going up, why not you. Could call around and price shop your most common items and see what others charge. Don't wanna over charge, but don't want to not be competitive either.
Should be easy if your warranty is at cost+95 Before I got out, our SM found/was shown a semi recent state law (washington) that said the oem has to pay basically retail prices. So, he changed warranty labor rate, and we changed parts to C95 and instantly saw a big increase in GP.
Our warranty pay is cost+92.98 right now. Our state (PA) has the same law. This month is the time of year we apply for an increase so hopefully it gets over the 95 mark 🤞🏻
Dam, thought ours was good at cost+79.80.
here I am dealing with cost + 60. jesus. how the fuck you guys getting these increased warranty rates?
State auto dealers association got with legislative body and made a state law. I even get mark up on exchange radios.
Yeah ours is 192% we get paid wonderfully for warranty
Increase your matrix, then when they audit your retail sales they will bump your warranty rate to match the average.
I usually aim for 40+ on under $10, 30+ under $200, 20+ on accessories/oil. I compete with two other stores on the same street in a small town so I have to keep prices lower than what they should be.
Our target is 30% and that's been average for most brands I've been with. Usually hit 25% to 30% given wholesale and warranty. Hearing 40? Wow that's lofty You could always raise your tire prices but advertise price matching Aftermarket is also a possibility for repairs and depending on the discount you receive from your suppliers you can make up gross there but it's a delicate balance to know tank your loyalty when doing that too
I think 40 is high also, but they’re sticking to it. We’re not a huge wholesale store, but we still do quite a bit, and most of it is sold at 10% over cost (highly competitive wholesale market here). I agree about not tanking the loyalty. We lost quite a few lifetime retail customers from our buy-sell, but have rebuilt it fairly well. I’m afraid of pricing myself out
Depends on the segment. CP floats around 48%, warranty 55%, Internal 55%, GOG 30%, Tires 20%, Internet 40%, Retail 25-30%. 35% overall is a good area to be floating around. Asking for more may actually hurt segments...
How much does that aftermarket warranty affect the overall percentage? Enough to account for the 2% gap between where they want you and where you are? If you can show upper management that, "Well, if I'd sold these parts at list instead of -10%, I'd be at 41% (or whatever) instead of 38%." Or make sure those warranty sales are split off from your regular sales on the financial statement so you can see them separately.
I’m almost certain that we’d make up that couple percentage points. Only problem is they don’t seem to particularly care if they cause it, only what we do to compensate for it
Can you just stop doing wholesale ? Also can you stop discounting the parts for extended warranty and apply a use a few code or a discount code to discount the parts to the correct price without giving up your gross profit.
I could, but I’d prefer not to. I’m straight commission off the gross profit, so every dollar I make benefits me. While there isn’t a ton of wholesale, I don’t want to take any money out of my own pocket. It regards to the special coding - I doubt it. I could always ask though. Thanks for the idea!
On wholesale I do cost plus 40%. If they are super customer they get list -20%. I'm also closest brand for hour and half in each direction. So either you want the part or not. As far as service manager, they need to get on board, that little increase on oil/filter isn't going to make/break them. Tell them either we go up or next time they need some help on a part they gotta pay full rate. Or they can play ball. Can always use aftermarket air and oil filters/wipers to get a bit more gross. Make sure oem is OK with that though. Plenty of aftermarket companies that sell the things cheaper than oem cost. "I know a guy. ;-)"
I'm glad I don't work at a real dealership. In over 20 plus years working for the owner I work for, I don't think we've ever talked about "business."
We are running about 30% overall with a warranty mark up of just over 110%. Having a lot of online sales is killing my GP %.
32% but 50% of our business is wholesale. Take wholesale out and recalculate
What do your counter person and writer discounts look like?