ARC Pricing Policy
I've said I'll save you money on your car repairs. But it's only fair that I explain HOW I'm going to do it. So you can have...
The Short Version
I will provide high quality, dependable, timely, AFFORDABLE car repair...PERIOD!
But if you want to know specifics, I'm more than happy to give you...
The Long Version
Most automotive dealers, as well as independent and franchise repair shops in this area of the country follow the pricing guidelines established by the ATI or Automotive Training Institute. The goal of the ATI is to show repair shop owners how to increase their profits. Hey! I'm a business owner, and there's nothing wrong with profits. Without profit you don't stay in business very long. BUT what I disagree with is the idea that to earn a living and keep the business open I have to "sock it" to the customer on parts pricing.
Here's how it goes. A chart used by the ATI to illustrate pricing guidelines for parts is divided into the "Jobbers Matrix" and the "Dealer Matrix." These matrixes work on a sliding scale for pricing parts to maximize the amount of money that YOU, the customer can be charged.
Let me show you how this works. I'm
going to use the "Jobber Matrix" since I am, by definition, a jobber, an
independent repair technician. Let's say your car needs a
replacement whatcha-ma-callit that costs me 5.00 from the parts
distributor. Using the ATI Matrix I'm supposed to multiply that
cost 3.25 times and THAT'S what I'm supposed to charge YOU. Let's
$5.00 x 3 = $15.00
+ $5.00 x .25 = $ 1.25
Cost to you = $16.25
So basically I'm suppose to charge YOU $16.25 for a part that cost ME only $5.00. Suppose I used a number of parts and my cost for those parts comes to a total of $250.00. Using the Jobber Matrix the pricing looks like this:
$250.00 x 1 = $250.00
+$250.00 x .85 = $212.00
Cost to you = $462.00
HOLY SMOKES! That's just not right! I don't need to mark up prices like that to make a profit and provide for my family. But that's what some of those other guys do and the reason you didn't think about it before now is because no one bothered to tell you about it before now.
At Automotive Repair Center I do it differently. ARC has partnered with the CAP Agency to assist the "Ways to Work Program" with affordable car repair. MY parts markups range for a low of 16% up to a high of 33% (depending upon market conditions). Keep in mind the other guys LOWEST markup is still 35%. My average is about 20% so let's use that as a fair example. Let's say you need a new starter for your car that cost me $89.00 from the parts distributor. I figure $89.00 + 20% = $106.80 and that's what I charge you. The guys using the ATI Jobber Matrix will charge you $89.00 x 200% (or 2.00) = $178.00. Doing it MY way leaves an extra $71.20 in YOUR pocket. I don't imagine you'd complain about that. (See Matt grin)
Why do I put a mark-up on parts? I'm glad you asked that question. As the business owner, I have PLENTY of business expenses to hold my attention. One of those expenses is I have to pay someone to order the parts, pay the invoices from my parts suppliers (they prefer for me to pay what I owe them) and keep track of my accounts receivables. That extra 20% on parts is what pays the salary of that employee along with service and delivery costs.
While we're on the subject of the ARC Pricing Philosophy, (You wanted the "long version" right? Well, here you go.) what about that customer who says, "I can save more money if I get the part I need and bring it with me." Fine! If you want to run by your favorite auto parts store and get the parts you need it's OK with me. Make sure you get the right stuff. I have a reputation to protect and if someone brings in a replacement part that's not going to get the job done right we might butt heads there a little bit. But otherwise I don't have any problems with someone coming in and saying, "Hey Matt! I have this brand new starter, spark plugs, and plug wires I bought at Save-A-Buck Auto Supply. (yeah, I just made up that name) Can you use them when you work on my car?"
Sure, why not? It's your car. All you're doing is paying me to fix it. That's where I make my money. The auto repair business is a service industry. I am a certified automotive technician and people pay me to fix their cars either because they don't know how to do it, or they don't have time to do it. It's the same with me. I'm like you in that I can do a little of this and a little of that, but if something major needs doing around my house, I need to pay the electrician, or the plumber, or the carpenter or whoever to do the job for me because either I don't know how to do it, or I'm busy fixing YOUR car and don't have time to do it.
Like all the other auto repairmen in the area, I charge an hourly rate. Now, I'm sure if you search hard enough you find my rate may be a little bit higher than some guy out there, but I'll tell you this much; my hourly rates are lower than most. One more thing. When you figure in my pricing policy, my Automotive Repair Center costs you a whole lot less. At ARC, I will provide high quality, dependable, timely, AFFORDABLE car repair...PERIOD!
-- Matt Lehman