Return on Investment
Most business decisions come down to Return on Investment (ROI). ShopController was built to increase ROI through efficiency, pricing tools, and productivity. Here are just a few easy to measure tools in ShopController Pro that can immediately increase your ROI. The average small shop can generate enough extra profit to pay for the subscription (and then some) with just 1 feature – ROUNDING. The many other ROI features like the Smart Parts Matrix and Shop Charges help manage your business more efficiently and profitably.
The Rounding feature adds up to 50 cents to your average part sale without making prices look higher. The calculated price of every part is raised to the next dollar, then reduced by a small amount. This feature creates a consumer-friendly price ending in the digits you choose, typically 95¢ or 99¢. THIS ISN’T NEW, we just make it automatic. We didn’t stop there though. Because you may not want every price to end in 99¢, we added randomization. That way, you can set it so parts end anywhere between 79¢ and 99¢, for example. We’ve found when people manually price jobs they rarely include rounding because it doesn’t seem to affect the total price, but the profit shows in the numbers.
- Lets say you calculate the prices for 10 parts and get these amounts: .65, 1.29, 2.43, 3.99, 4.36, 5.12, 6.03, 7.66, 8.23, and 9.03.
- The chart shows the profit gained when you round these ten parts up to the next 99 cents.
- Just by rounding these 10 parts – all under $10 each, you generate an additional $6.11 in sales. And that is all profit. How many parts do you sell on each ticket? How many parts do you sell in a month? Make each job a little more profitable!
Just 500 parts a month | Up to $250 additional profit.
- Don’t underestimate how many small parts you sell.
- An average tune-up could include 15 parts or more.
- A simple oil change could include 6 parts or more.
Four Markup Categories
The primary purpose of the Parts Matrix is to RECOUP LOST MARGIN.
Many shops use a simple pricing strategy like doubling the cost to get the sell price. This should give you a 100% margin at the end of the month/quarter. The problem is it never does. You will almost always either lose sales or drop price. The trick is to account for it and make it up where you can.
- It’s harder to get a high margin on high priced parts. Accept it, plan for it, and move on. The highest gains in margin can be made on low priced parts. For example, a hose clamp can be marked up 3 or 4 times. As the cost of the part rises, your margin will come down. That’s OK if you plan for it, because you can use low cost parts that are sold in higher quantities to make up the difference.
- You can set up Aftermarket, Dealer, Tires, and Fluids to use different markups (Or select your own part categories). You know Dealer parts are harder to mark up, so account for it. Because the Parts Matrix accurately follows your pricing strategy, your Service Writers don’t have to adjust prices on every ticket.
- Once your employees trust the pricing model and don’t second guess their quotes they will build confidence and will be less likely to give unnecessary discounts.
Shop charges are necessary in most cases. If you are not charging shop charges you are probably losing jobs or losing profit.
What are Shop Charges for?
- There are many small expenses that are difficult to account for on a ticket. These include brake cleaner, silicone, WD40, rags, uniforms, software, diagnostic equipment, shop tools, etc.
- Shop charges allow you to add a fixed amount or percentage of parts/labor to every ticket. Many of the shops that use ShopController charge 4% of parts & labor.
- This can be an additional 4% profit on every work order.
How do I lose jobs by not charging shop charges?
- You are not providing an apples to apples quote. Many shops quote customers and send out coupons on jobs without including shop charges. This means they have an additional 4% margin on every work order. Most customers don’t know who charges shop charges and who doesn’t so it is not part of their buying decision.
In some areas, such as California, Shop Charges must be itemized. Verify any laws/guidelines in your area before implementing this feature.