All workshop owners know the pain of negotiating part costs. The auto repair industry is in a state of transition, laws are changing, costs are rising, and customer demand is growing. Auto Repair industry professionals have said that you should not pay any more than 25% of your revenue on parts.
In any business you are going to have expenses, but if you don’t stay on top of them or look for better options, you may find yourself in a bit of a pickle.
Workshop Mate has put together a quick guide on how your auto repair store can get better parts prices.
1. Shop Around
It’s a no brainer! Like everything shopping around can help you get the best possible price. There is an abundance of part suppliers in Australia and all of them are desperate for your business. Don’t just stick to your current supplier out of loyalty, at the end of the day you have a business to run, if they cannot give you the best price, it’s time to find another supplier.
It is so important that you understand the industry average price for parts, don’t request an amount that is unreasonable.
2. Reduce your supplier amounts
A trap that many workshops fall into is using multiple suppliers. The problem with using multiple suppliers is you could be paying a whole lot more than you should be. .
Let’s say you are using 5 different suppliers? There could be options out there that bundle part packages together that can reduce a massive portion of what you are currently paying.
If you are currently using multiple suppliers that’s okay. There are alternatives to get you a better deal. Using tip number 1 and shopping around will put you on the right path. Sure, it does take a little bit of time researching but the savings you can make for your store can be massive.
3. Build relationships with account managers
You would already be familiar with “mates rates”, you have probably used it for friends of your workshop. The same can be said for parts supply. Many businesses offer better deals to close friends and loyal customers.
To get the best price on your parts you need to build a close relationship with your parts supplier. Keep them close, build trust between one another, and let them know what other suppliers may be offering. You want to maintain a great relationship with your parts supplier because at the end of the day they will be the ones that will go into bat for you. The closer you are to a supplier the greater the savings you will receive.
4. Seek external advice
Sure, sometimes a deal can be too good to be true. If you ever have that suspicion you need to get some external advice. Sometimes the cheapest option may not be the best option. You want high-quality parts that are going to last and do the job you want them to do. The last thing you want is for something to go wrong on a customer’s car and have them go elsewhere, it looks bad on your business and ultimately loses you money.
Buying the cheapest option can have serious impacts on your workshop and with a reported 47% of auto repair customers being repeats, you won’t want to take the risk. The best way to avoid this situation is by talking to other workshops, friends and or an industry professionals. It may take some time, but it would be worth it for your workshop in the long-term.
Analyse your inventory reports
One of the biggest frustrations for Australian mechanics is managing parts inventory. To put it simply if you don’t use reporting to evaluate your parts inventory, you are losing money!
How do you know how many parts you need? How would you know when you need to get more parts in? The answer is you wouldn’t, you would be managing your workshop on the run and burning cash in the process.
If your workshop uses a management software like Workshop Mate, you will have instant access to inventory management and reporting features that allow you to plan, forecast, order and report on your entire parts inventory.
In conclusion,
In the crazy times we live in, your business overheads have become even more important than they have ever been before. Workshops need to focus on getting the best quality parts and the cheapest possible price to stay competitive and profitable.
To read more of Workshop Mate’s guides, insights, and advice, visit our news section here.
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