Know Who You Are to Maximize Profits - BodyShop Business

Know Who You Are to Maximize Profits

Pretty much in every aspect of our economy today, you can find examples of high-volume production services mixed with lower-volume custom services to meet the varying needs of end-users and consumers across the country. When it comes to consumable goods, Wal-Mart sets the standard for high-volume, mass consumerism. Yet, their mega-store, hyper-mart approach is offset by thousands of independent merchants vying for consumer traffic by offering something different, such as higher-quality products, more unique or harder-to-find products and personalized service.

Home Depot and Lowe’s have cornered the “big box,” high-volume home hardware category. Heck, they invented it! Yet, Ace and True Value (among others) are doing quite well as smaller, independent franchisees catering to the female buyer with outstanding customer service and offering more convenience in specific markets. Back up the channel, many manufacturers today are finding bigger profits by catering to niche markets and meeting specialized needs by producing smaller quantities of many different products rather than ramping up to produce millions upon millions of one or two Stock Keeping Units.

In the world of automotive engines, you have production engine builders and custom engine builders. When it comes to owning the American dream (i.e. your very own home), you can choose from many production or “track” home builders, or you can have a custom home built just for you! The list goes on and on, and there are thousands of examples of huge successes and tragic failures on either side of the equation. So, what does this have to do with collision repair? Well, everything.

Certainly, in our very colorful industry, the overriding shade is gray. Whether it involves the many issues and topics we debate, such as blending or labor rates, parts or DRPs, cycle times or supplements, every subject has its pros and cons, its supporters and detractors. And, so it will be when deciding on what type of shop you will ultimately be: a high volume production shop or a custom shop providing unique and specialized services. I proclaim that, in order to maximize your profitability, you’ll need to be one or the other. Some will argue that you can be both, and even others will debate that you should be neither.

However, what can’t be debated is that the most efficient practitioners in any industry are ultimately the most successful. And, the most efficient practitioners always have a crystal clear identity of what they are, what they do and how they do it. There will always be a steady supply of vehicles to be repaired. The shops that remain to provide this service will have clearly determined how they’ll provide it and to which segment of that supply they’re most beneficial. Insurers will play no role in your decision as to which business model (high volume or custom work) is best for you, but they will play a huge role in enabling you to implement it. No gray matter there!

You May Also Like

Is Your Auto Body Shop a Hobby … or a Business?

So you want to provide safe and properly repair vehicles to your customers … even at a financial loss?

When reading this article, you’ll notice that I’ve touched on some of this information before. However, this information warrants repeating, as many quality-oriented repairers have yet to embrace and implement it in their businesses.

A Different Viewpoint

Many times, I’ve heard repairers say, “All I want to do is to serve our customers with safe and properly repaired vehicles and give them the best experience I can.” Really? Even at a financial loss and incurring significant liabilities?

How to Determine the Value of Your Auto Body Shop

Whether you’re looking to sell, expand or transition your shop, understanding the value of your business is essential.

Squad Goals: Empowering Women in Collision Repair

Eight strong, smart, skilled women help Jason Wong guide his two CARSTAR locations in San Francisco.

Body Shop Cleanliness: Spots Are Only Good for Dalmatians

A spotless shop inspires customer confidence and drives excellent performance.

Solid Accounting: The Difference Between Winning and Losing

Wouldn’t it be great to be able to quickly review your financials and know where you’re winning and losing so you can fix the problem immediately?

Other Posts

BodyShop Business 2023 Executives of the Year

Greg Solesbee was named the Single-Shop Executive of the Year, and Charlie Drake was named the Multi-Shop Executive of the Year.

This Could Be Your Last Text

A sign I saw on the highway that said “This Could Be Your Last Text” reminded me of my son’s recent car wreck.

SUNY Morrisville Auto Body Program Makes Students, Cars Shine 

A 1997 Mustang Cobra is getting the chance to shine again, thanks to students in Alexander Graf’s auto body technology classes.

3 Strategies to Improve Your Insurance Protection

If you’re looking to improve your shop operations and set yourself up for success in 2024, remember these three insurance strategies.