In many cases that's true. Get as much as you can, when you can. Leave no money on the table.

The other philosophy is "You can shave a sheep a hundred times but you can only skin him once".

I always put more stock in the latter than the former. Disagreements over this are one reason I'm no longer in the industry :-)

Cheers
DD

 

Been there, done that :-)

Although in my case my customers always knew they were getting a real bargain. They have trouble finding *anyone* who will work on an old Jag.

Cheers
DD

 

That seems to be the downfall of MANY businesses. I've been in business from 1995 (out of military after 20+years) till 2010. In that time I owned two car dealerships, and two gas stations with full service car washes. Every business I took over was working on a high profit margin, with low volume. I think that the owners were lazy, wanted a LOT of money, but were not willing to put a lot of work in it. The problem? Well,...the low volume of course. My business philosophy was always "low profit margin - high volume". Why?

Example: Back in 2000 you could buy a branded gas station with convenience store, and a full service gas station in PRIME location in SoCal (that is a "reseller site", privately owned with the land and all structures, as opposed to "dealer's site" which is basically oil company owned, and leased to the "owner"). The gas pumped was 250K gallons a month (pull margin 14 cents/gallon), store did 65K in gross sales (50% gross profit margin), and the car wash (the MAIN income source) was washing 85 cars a day average, with $18 a ticket average. Selling price 4Mil.

Ten years of toiling,.....gas went up marginally to 300K gallons (pull margin of 8 cents/gallon), store to 85K (40% gross profit margin), and the carwash.......hold your breath,....325 cars a day average at $14.50 per ticket average!
Selling price: 14Mil (that's 10Mil profit over the ten years, roughly 1Mil a year). The original builder built the site for 3,2Mil operated it for two years, and sold it for 4Mil. Profit: 800K in two years.

So I think my concept of keeping the gross profit low, and exponetially increasing the volume IS the right way for the business to succeed. This example was the last business venture I was involved with, but I did it similary with the dealerships too.

The door traffic (volume) brings the daily cashflow that the business needs to operate. If that volume is low (and I don't care how high is the "profit per unit"), once the economy goes down (and they all do the constant up and down!), volume drops to the dangerous level, and MANY businesses close the doors,.....permanently. Here in SoCal you see MANY businesses out of business (some BIG dealerships for example).

The ones that "don't skin the sheep", are still "shaving" the same sheep.

My mechanic gives me some ridiculously low prices on the work that I don't want to DIY (like tranny service for example), but he knows I have MANY cars to work on, and MANY friends to send to him, and he would rather make a little per customer, but have a LOT of customers! He's been doing it for 20+ years. He will go so far as to source the parts in Mexico (!!) and give them to me for the cost (no mark up). OEM parts for European cars are WAY cheaper accross the border than here in the 'Good Ole USA'.

Anyway,....sorry about the rant. Drinking my morning coffee, and 'skinning the sheep' prompted me to respond.

 

Yup! That pretty much sums it up! There are various reasons for the "no older cars" strategy. Some better than others.






I know. That's silly.

Some shops (even dealers) will negotiate pricing on bigger jobs. Or, sometimes, if they're hungry enough, even not-so-big jobs: "A little bit of something is better than a whole lot of nothing".

Many people won't ask a shop to negotiate a price. I've never understood why. A couple years ago my '05 Honda needed a ton of work. For various reasons I was unable to do the work myself at the time. Took it to the Honda dealer.

After discussing what work would and wouldn't be done I asked them to give me an estimate. They called back in a couple hours with a quote. I mulled for a couple hours and called back with a counter offer of about 20% less. They mulled for a couple hours.....and then called back to say "OK". :-).

When I was in the business myself instructed service advisors to see me if they felt a customer was on the verge of saying "yes" ....but thought a pricing adjustment was needed to close the deal.






Just dumb, I think!







Gee, if this pattern has been repeating for 20 years, did you ever think it might be you and not them? :-)

I don't wanna get bogged down in semantics but "high priced" and "dishonest" are not the same thing.

I can't totally disagree, though. Some shops DO selectively price-gouge if they feel they have an easy target. And that IS a form of dishonesty.

Cheers
DD