5 Ways Mechanical Workshops Can Increase Profit Margins

01 Nov 2022 Helpful Tips


With inflation and costs rising, profit margins have never been more important for Mechanical Workshops. If your Workshop can’t increase profit margins, it’s safe to say you won’t stay in business very long.

That brings us to the question, How Can Mechanical Workshops Increase Profit Margins in 2022?

Workshop Mate has put together 5 Ways Mechanical Workshops Can Increase Profit Margins in 2022.

Let’s get into it!

1. Evaluate Your Suppliers

The prices that your Workshop sources parts for will have a major impact on profitability. The cheaper you can source parts from your suppliers, the higher your profit margin will be when you sell.

To ensure you keep your profit margins high, it is important that your Workshop frequently evaluates your suppliers and their pricing. The benefit of constantly reviewing your parts pricing is you can find better alternatives before costs start to eat into your business’s profits.

If your current suppliers aren’t giving you the best deal, shop around, see what other providers may give. The lower cost you can source parts for the better financial position your Workshop will be in.

Related Article: 5 Tips to Get Better Parts Prices.

2. Review Your Service Pricing

As inflation and costs continue to rise, the only way that your Workshop is going to maintain profitability is to review your pricing. It is so important that your Workshop constantly reviews your current pricing and ensures your services are priced appropriately for the current market conditions.

Research what is happening in the industry, see what other Workshops are charging customers and most importantly look at your cost increase as a result of rising inflation. Once you have an idea of the industry standard and your costs, come up with an appropriate price point for your services. It is important that your price point will help you continue to acquire and retain customers whilst maintaining profitability.

Related Article: The Main Reasons Why Workshops Fail.

3. Assess your Service Offering

The more services that your Workshop offers, the higher your costs will be. A good way to increase profitability at difficult times like this is, is to assess your Workshops service offering.

Dig into your Workshop’s reporting, see what services popular and what services are not. If there is a service that is not being utilised, consider dropping it and concentrating only on the services that are selling and are more profitable. Profitability is not about the number of services your Workshops provide, it’s about having an offering which is cheap to perform and has strong customer demand.

4. Up Sell

Up Selling has and will always be an important part of running a business. When you get a customer into your Workshop your number one goal is to get them to spend as much as possible. One of the best ways to increase profitability in 2022 is to leverage upselling.

Try to implement upselling strategies that your Workshop can use to get the customer to spend more. Offer great add ons, offer additional services or repairs at a discounted price. The key to having a strong upselling strategy is to give customers something that is relatable and hard to refuse.

Related Article: The Best Upselling Techniques for Auto Repair Shops in 2022.

5. Focus on Customer Retention

New Customer Acquisition is one of the biggest costs for all businesses. To maintain profitability, your Workshop should focus 100% on customer retention. The reason being is, customer retention is cheap, you don’t need to spend hundreds if not thousands on advertising to get consistent revenue coming through your doors.

Focusing on Customer retention gives your Workshop the ability to plan appropriately. Your Workshop can order the relevant amount of parts and assign the correct number of mechanics as you know what to expect. Having a strong customer retention is the key to success in the Auto Repair industry in 2022.

Related Article: The Best Strategies to Retain Customers at Your Workshop.

Final Word,

It’s no secret that rising inflation and costs are hurting all businesses. To be successful running an Auto Repair Workshop in 2022, your Workshop needs to implement strategies that leverage greater profitability. The 5 strategies mentioned above are a few great ways your Workshop can increase profit margins in 2022.

We hope you enjoyed reading this article. To read more articles like this, please visit the Workshop Mate latest news page here.

About Workshop Mate,

Workshop Mate by Jeal is an Australian, Web-based, Workshop Management Software that simplifies and automates the daily tasks of running a mechanical Workshop. Using innovative technologies, Workshop Mate removes common frustrations experienced at the Workshop – opening your doors for future growth.

Workshop Mate features include Job Management, Stock Management, Quotes, Invoicing, Integrated Accounting, Barcoding, Customer Bookings, Service History, Job Allocation and more – in the one central, easy-to-use application.

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