fbpx

Mike Anderson

mike anderson autobody newsMike Anderson is the president and owner of Collision Advice, a consulting company for the auto body/collision repair industry. For nearly 25 years, he was the owner of Wagonwork Collision Center, an OEM-certified, full-service auto body repair facility in Alexandria, VA.

 
Wednesday, 10 August 2022 11:43

From the Desk of Mike Anderson: Don’t Let Higher Sales Take Your Eye Off the Ball

Written by

Index

Share This:

 

There’s an expression I’ve been thinking about in relation to the collision repair industry: “Pigs get fat and hogs get slaughtered.”

As it applies to business, I think it means if you end up being greedy or taking the good times for granted, it’s going to catch up with you.

 

It reminds me of another expression I use a lot: “Lots of sales cover lots of sins.” You can substitute “mistakes” for the word “sins.” I hear from a lot of body shops about how much their sales are up, sometimes to record levels, and I’m concerned a false sense of security can settle in.

 

It can be easy to take your eye off the ball when work is plentiful.

 

Let’s start with the higher sales number. At least some portion of that is likely attributable to more parts per repair order. CCC Intelligent Solutions reported there were almost 12 parts per claim on average last year, a number that has been climbing since 2011, and especially in more recent years. I’ve seen some other statistics that suggest there’s anywhere between seven and nine more parts per repair now.

 

Add to that the increased price of those parts. Again, CCC data shows parts prices increased 5% in the first quarter of this year alone, after a 7.4% overall increase last year. I’ve seen other statistics showing some parts prices have gone up between 18% and 23%, depending on the type of part.

 

So if there are more parts per repair order, and the prices for those parts have gone up, then of course your sales should be up. But remember, as a repair order includes more parts and less labor, your overall gross profit as a percentage starts to decline.

 

I’m not saying that’s bad or good. All I’m saying is...


Previous Page Continue reading »