请稍候...
点击数：17582014-02-08 00:00:00 来源: Cheaper Chinese tyres exporter
Today, maybe more so than ever, people are trying to stretch their money.
With so many auto parts products being imported from overseas, many shop owners and managers will struggle with issues such as, “Do I use a premium auto part for a particular repair, or a generic?” In many cases, we try to discuss the customer’s options with them. There is always a cost difference, and there can be a quality difference, which can be difficult to determine initially.
Often, the quality differences show up after the job is performed, either immediately or as a higher percentage of warranty claims, which can be difficult—if not next to impossible—to track.
Generic brake pads, for example, may immediately cause a growling or rubbing noise, and I find few customers—no matter how economy minded—can live with such noises. However, a generic ball joint may wear faster, but that could be a non-issue for someone who wants to get their vehicle through inspection and plans to sell it soon.
The other issue here is how to price generic parts when sold. We in the business know that the profit of parts installed on a vehicle is a necessary ingredient in meeting expenses. This helps cover tremendous costs any legitimate shop incurs to operate: salaries, insurance, building rent or payments, utilities—these are just the tip of the iceberg.
Most of us would fall into a similar category as it pertains to generic parts. Twenty-five years ago, there were not many generic parts on the market. Maybe shops averaged using 10 percent.
Ten years ago, this could have easily climbed to 40 percent, and today’s shops could be using 50 to 75 percent or greater. A shop that would use a premium part may enjoy a 50-percent parts margin, and, if over the years shops sold a higher and higher percentage of generic parts, the shop may still experience a 50-percent parts profit margin.
If you fall into this category, your shop is gradually losing revenue, assuming a similar sales volume. I am not suggesting you sell a generic part for a premium price, but experts within our business who try to provide advice on fair business practice often recommend matrixing parts prices to help the shop meet their ever-growing expenses.
Let me cite an example: A premium tie rod end lists for $100 and wholesales for $50. The comparable generic part wholesales for $25. If you sell the generic part for $50, again, realizing a 50-percent parts profit margin, in this example your shop loses $25 profit in revenues yet continues to post similar gross profit margins in parts.
This type of example can have detrimental effects on your ability to meet expenses. If you offer the generic part for $75, for example, your revenues would be the same and your customer is saving 25 percent over the cost of the premium part.
We all work so hard to make ends meet, and we sometimes can’t see the forest for the trees. I would speculate that many shops have been experiencing what is being discussed here—they are working harder and harder but realizing diminishing revenues and may be having a difficult time understanding why.
