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A variety of factors have made in-house glass work less profitable, but some shop owners still make it work. Is it right for you?
“To be, or not to be. That is the question.”
If Shakespeare’s Hamlet had been a body shop owner, he might have pondered a tougher query: “To do my own glass work, or subcontract it out.”
Now that’s the question, and a tough one at that.
On one hand, doing your own glass work in-house offers the opportunity to create a new profit center, albeit one with relatively low margins that seem to be getting smaller every year. Subbing it out may save you headaches but also may stifle your ability to control the quality of the job and leave you liable if something goes wrong. If you’re going to be held liable either way, many argue, then why not do the work yourself? It comes down to a decision that each individual shop owner has to make by carefully considering a number of factors and deciding if doing their own glass work is right for them.
Frank Gobekar’s shop used to perform its own glass work, but that all changed two years ago. Gobekar, general manager of ABRA Auto Body & Glass in Woodbury, Minn., now subs out the work to the corporate ABRA center due to an inability to turn a decent profit.
“The hardest thing with glass was hiring good employees to come to work every day,” Gobekar says. “Plus, you had to deal with the expenses of the vehicles (for mobile service) and the employees taking care of the vehicles. Hiring good people who knew the trade and were reliable was hard to do.”
Workers compensation was another expense squeezing his net profit – down to roughly 2%.
Gobekar says there were also other factors that contributed to his decision to sub out glass work. “The other challenge was that we were a stand-alone, one-truck deal,” he says. “I was restricted to a particular area and limited to a certain radius from the shop, and that made it difficult.”
Based on his experience, Gobekar believes shop owners and managers should steer clear of bringing glass work in-house unless they plan on doing it on a large scale and can work the insurance company angle.
“Every time you turn the corner, there’s another glass truck in the market out there,” he says. “Unless you have connections with the insurance companies, you’ll only get a little work. And it probably won’t be worth it to hire a trained technician just for that.”
Based on current market conditions, Willie Myers Jr. agrees that shop owners looking to create a new profit center should consider something other than in-house glass work.
“The glass industry has let this thing get nasty,” says Myers, owner of Myers Auto Collision Repair in Trussville, Ala. “Safelite and other national companies have come in and put the local vendor out of business unless he can do it for nothing.”
Myers advertises his shop as a glass installer, but they don’t do it themselves. Instead, they call Lynx Services, a referral service that will find an outside glass installer to come to the shop and perform the work – and for that Myers’ shop receives $25 from Allstate. Myers considers the $25 payout to be the lesser of two evils and not exactly something to be overjoyed about.
“We make no profit on that, nothing to cover light, insurance, etc.,” he says. “But if you have your own guy do it, you have the cost on him of workers comp, taxes, etc. If you sub it out, you still have the administrative cost of calling someone and going through the system. So you have cost either way.”
Even though Myers subs out his glass work, he says that he maintains control over work quality by making sure the person hired to do the job is properly trained.
“The quality has to meet the standards the warranty will cover,” he says. “You don’t hire some guy who has a jackleg business working out of his garage.”
Myers advises anyone looking to get into the glass business to analyze four things before deciding what route to take: cost, liability, warranty and profit. How much does it cost for you to install or fix a windshield? What’s your liability? What’s the best warranty or description of your liability? And how much profit is there versus the liability? Myers envisions a day when he’ll take a closer look at doing glass work in-house, but for now he believes it just doesn’t make sense.
“Right now, the glass business is worse than the body shop business. The questions I would ask are: ‘Am I making enough profit to hire a person on?’ and ‘Am I doing enough glass work?’ What volume do I need to do to put a truck and person on? It’s a war right now among who can do it cheaper. But you can’t do it so cheap that the air bag doesn’t work. It’s so technical, but as soon as you train a guy to do it, he can pick up and leave and go start a business himself.”
Brad May, glass manager for the ABRA Auto Body & Glass facility in West Aliss, Wisc., agrees that volume is key for any glass business, not just for profitability but for employee training as well. The better your employees are at installing or repairing glass, the better you can stave off any liability claims.
“The reason our guys do it well is that they do a lot of glass work and do it every day,” May says. “And to body shops that sub the work out to us, it’s worth it because they can warranty their product. There’s more damage done to the body and more glass losses from someone who doesn’t do it a lot.”
May believes the chips are stacked against anyone trying to get into the glass business today. “If you have the budget to get your name out there, you might make it work,” he says. “But it’s harder than hell to make a profit. One guy said you can make enough to make a living but not enough to get out of it. And there’s no room for error in installation or you won’t have a business.”
Making It Work
Location is an important factor when considering in-house glass repairs. The more glass shops in your area, the less your volume and the less your pay. In Randy Crittenden’s case, that’s not a problem. He owns Randy’s Paint & Body in Tribune, Kansas – population 1,200 for the whole county – and he’s the only one around doing windshield installation and repair.
“If you’re in a location where there are glass shops all over, you might want to reconsider doing glass work yourself,” Crittenden says. “As for me, I don’t see having that problem anytime soon, but you never know.”
He admits that you can’t make as much of a profit as you used to, but, as he says, “every little bit counts.” For those who would need to invest in training and tools, he says that they’ll have to decide if that outweighs the potential profits they’ll make.
For Cory Almy, in-house glass work isn’t so much about making a profit as it is making his collision shop a “one-stop shop.” Almy is part owner of Minot’s Finest Collision Center in Minot, N.D. “We do it to be able to offer all collision services,” Almy says. “Plus, it brings in revenue during slower times.”
Almy also uses it to upsell customers. When a customer comes in to get an estimate on body repair, he’ll mention that they do glass repair if he notices a crack in their windshield. He also runs a glass repair ad in the Yellow Pages, which generates two or three calls a week from potential customers.
In addition, Almy recently invested in a chip repair machine that allows his staff to fix minor chips efficiently and effectively. He typically charges $50 to $55 for the work and can usually eke out $10 to $15 profit on each job. He says the machine paid for itself after the first year and was easy for his staff to learn how to operate. And it’s yet another service that his shop can offer that contributes to the bottom line.
As for liability, it isn’t a concern for Almy because of the level of experience and training his staff has. “I know [the glass work] is being done right. At a glass shop, they just pay the installer by the hour so he may or may not have the right frame of mind to be careful, but I have an 18- to 20-year technician working on a job so I can feel confident it will be done right.”
Some argue that adding in-house glass work to an already overloaded daily work schedule creates havoc and confusion among technicians who don’t know who’s responsible for what and what job takes priority over another. Others like Almy say it presents an opportunity to solve those issues and come out with a more efficient work process overall.
“It promotes the concept of working together,” says Almy. “One guy works on a dent while another works on a windshield chip. In the end, it contributes hours to the team. Some techs scoff at a windshield chip when a dent needs to be fixed. They know it isn’t lucrative, but they also know it’s something we need to offer.”
A Technical Process
If you are going to do your own glass work, particularly installing new windshields, you’re going to need highly-trained technicians to do it, since it takes more skill and focus to remove and properly install today’s windshields, back glass and other urethaned or bonded stationary glass than it did for windshields on older cars.
According to the National Glass Association (NGA), the technical knowledge needed to perform a windshield replacement has increased by 50 times. Many decisions need to be made: sealants, dry times, gasket types, one- or two-part sealants, OEM glass or aftermarket, proper primers and pinch weld treatments, etc.
According to I-CAR, 90% of windshields installed are still installed improperly. This endangers vehicle occupants (and makes you liable if something does happen) since 60% of strength in roof crash resistance comes from the windshield and 100% of the structural support for air bag deployment.
All that said, it stands to reason that bringing glass work in-house isn’t a decision you should make without doing a lot of market research. For some of you, it may prove wise. For others, it may not.
Writer Jason Stahl is managing editor of BodyShop Business.
Comments? Fax them to (330) 670-0874
or e-mail them to BSB editor Georgina K. Carson at [email protected].
Pros/Cons of OUTSOURCING Glass Work
No large overhead investment needed
No specialized training needed
No streamlined production effort needed
Pros/Cons of INTERNALIZING Glass Work
Increase gross margins
Improve production management
Control repair quality
Provide employee opportunities to increase skills
Provide career path opportunities for employees
Imbalance between glass work and day-to-day duties
Skills required for proper installation
Large overhead investment
The general consensus in the industry is that the NAGS pricing is an antiquated system of calculations that’s gone on for years. The list prices, described by some as “bizarre at best,” are sometimes three or four times the list price of the same part listed as OEM in the estimating guides. You can make very good money on some windshields and, on others, you’ll barely break even.