When California put into effect last October
a set of minimum-equipment standards for operating a collision
repair shop, it essentially put shade-tree mechanics out of business;
in the process, it went where no regulation has ever gone before:
It divided shops into three classes (painting only, light repair
and full-blown collision repair) and specified the equipment each
class must have.

This ground-breaking regulation, which includes
many other facets besides equipment mandates, demonstrates how
important purchasing the right products and equipment has become
to staying in business. Purchasing is an integral part of this
industry – and not because a regulation requires you to buy something
– because it’s the only way for shops to keep up with competition,
to be efficient and profitable, and to get the type of work they
want.

So just what are shop owners purchasing these
days and where are their buying dollars going? Our respondents
spend 34.3 percent of their buying dollars on crash parts, 17.4
percent on paint, 11.4 percent on refinish materials, 8.9 percent
on repair materials, 8.4 percent on tools, 7.2 percent on mechanical
parts, 6.7 percent on capital equipment and 5.7 percent on other
purchases.

When it comes to parts, 90.1 percent of our
respondents purchase aftermarket parts. Of these respondents,
86.3 percent purchase aftermarket bumpers, 76.8 percent purchase
aftermarket sheet metal, 74.2 percent aftermarket condensers,
62.1 percent aftermarket cooling-system components, 24.2 aftermarket
brakes, 23.7 aftermarket suspension parts, 16.3 percent aftermarket
steering components, 5.3 percent aftermarket air bags and 10 percent
other aftermarket parts.

Why are 90.1 percent of shop owners purchasing
aftermarket parts? About 81.6 percent said because they feel pressured
by insurance companies, 20 percent because the profit margin is
better, 6.8 percent because they like them and 21 percent for
other reasons, such as customer requests and availability.

When asked specifically if they use aftermarket
"crash" parts, 73.2 percent of our respondents said
yes, while 26.8 percent said no. Respondents using aftermarket
crash parts said these parts are used on 23.8 percent of repairs
and they return 18.5 percent of aftermarket crash parts because
they don’t comply/fit.

Of the shops that don’t use aftermarket crash
parts, 100 percent of them said they don’t use them because of
poor fit, 89.1 percent because of poor quality, 40 percent because
they buy only OEM, 16.4 percent because there’s no profit and
21.8 percent for other reasons.

About 78.2 percent of respondents said they
prefer used parts to aftermarket crash parts, and reasons cited included:

• "Used parts are still OEM and usually fit better."
• "LKQ parts are OEM, they fit, work and last better."
• "Aftermarket parts are junk."
• "Customers usually want OEM."
• "Good used parts are a better buy. Aftermarket quality
  isn’t consistent."

The 21.8 percent who prefer aftermarket crash parts to used parts
cited such reasons as:

• "Aftermarket parts are clean and ready."
• "Less time involved to find and administer and to clean
  up."

• "I like giving the customer new parts as opposed to junkyard
  damaged and worn parts."

• "In our area, used parts are about as expensive as new
  aftermarket parts."

• "Used parts are just that – used and abused."
• "If the fit is acceptable, aftermarket parts are less
  work."

Second only to parts purchases, materials purchases consume quite
a bit of a shop’s buying dollars. In a typical month, shops spend
$1,500 a month on paint, $300 on primers, $200 on abrasives, $180
on masking products, $100 on surface-prep materials, $100 on fillers,
$100 on cleaning products, $95 on buffing products, $50 on waxes
and $45 on detail cloths.

Most shops use only one brand of paint, and the owner typically
makes the final decision on which brand is purchased. When considering
paint options, quality is the most influential factor, followed
by ease of application, reputation of product, price and painter
recommendations.

To learn about new products, shop owners rely on – in this order
– trade magazines (up from second place in 1996), jobbers (down
from first place in 1996), manufacturers reps, other shop owners
and trade shows.

Besides purchasing new products, about 67.3 percent of respondents
plan to make a major capital investment in the next 12 months.
Of these respondents, 70.6 percent want to purchase new equipment,
53 percent want to expand their shops, 30.9 percent intend to
relocate and 1.5 percent plan to acquire another shop.

So what types of equipment do shop owners plan to purchase and
which purchases do they consider most important? Here’s what respondents
had to say:

• Prep station. "For productivity and cleanliness."
• Infrared heat lamp. "My shop is cold."
• Office computer. "Faster estimates for customers and
  better office organization."

• Central vacuum system. "Longer tool life, health reasons,
  better finished product."

• Downdraft spraybooth. "Shop production, safety, environment."
  "More paint production." "Clean shop, clean lungs,
  clean jobs."

• Portable lift. "To make working more comfortable (ergonomics)."
• Diagnostic system. "We’re now subletting this work."
• Estimating system. "More profitable estimates, less forgotten
  charges."

• Above-ground lift. "All-around convenience."
• Paint-thinner recycling equipment. "The EPA."
• Computerized measuring system. "Faster, less mistakes,
  more accurate." "Needed for future insurance business.
  Very important to have if I want to be a preferred shop."
  "Need it to stay in step with industry and with insurance
  regulations."

Most respondents know they need to spend money to make money;
they know what equipment is needed and, most of the time, they
don’t have a problem purchasing it.

What’s interesting about California mandating necessary shop equipment
is that quality shops already own the equipment – or they plan
to own it. Reputable shop owners understand what’s necessary to
perform repairs efficiency, profitably and correctly; regulations
only serve to remind those who aren’t running reputable businesses
that, eventually, they’ll be forced out of business.

Writer Georgina Kajganic is editor of BodyShop Business.