How to Use an Auto Parts Markup Matrix to Maximize Your Shop’s Gross Profit

How organized is your shop’s schedule? When you look at it, is it easy to see gaps? Is it cluttered or organized?

Appointment scheduling should be a quick, simple process that gives you and your team more time to focus on customers and their vehicles.

Automotive scheduling software gives auto repair shops the ability to bridge the gap between saying “yes” to customers, while not overwhelming their team. Although “saying yes” is a simple concept, the ability to not turn people away will have a lasting impact on your customers.

Humans are not computers. As much as we try to keep up, the impact that smart software has on our day-to-day workloads is impalpable. What may take us hours to create, log, and plan can take computers minutes, if not seconds.

Although you have the ability to plan exactly what repairs need to be done, automotive scheduling software can help you coordinate times, notes, and schedules faster than it would take with a whiteboard or pen and paper. Implementing software into your shop’s scheduling routine can significantly improve your team’s capacity.

As your repair orders (RO) start to stack up, your team will need reliable scheduling software that can keep up with your shop’s growth.

With just the right tools for the job, every repair can be so much easier. There's a reason some car manufacturers produce their own unique tools, and while they might seem unnecessary, they can turn hours into seconds.

Even so much as a proprietary socket with a unique angle to remove an oil drain plug tucked right up against the subframe, as silly as it may seem, is worth the extra little investment. The adage still rings true, that ultimately time is money -- saving time keeps your shop running like a well-oiled, rear-midengined dry-sump V8.

Running an independent auto shop requires the right tools, and not just the right impact wrenches or the right alignment rack. 

The right shop management system can revolutionize the way your shop runs, from the moment customers call or walk in, to receiving payments and getting vehicles back on the road.

Learn why Tekmetric is the right tool for the job for shop management from some of the brilliant minds behind the revolution:

The Biggest Benefits of The Right Shop Management System

Enhanced Customer Experience: Put your customers first with a suite of features that allows you to easily communicate to build the trust needed to run a successful repair shop. Simplified operations in your shop naturally lead to improved customer service.

Higher Efficiency: Save time on manual tasks with a set of features that allows you to run your shop the way you see fit with easy-to-build automation, custom RO labels, and templates across the shop. Focus on the customer, and not a computer screen.

Remember spring and summer of 2020? A lot of us are probably trying to forget and move forward, and we feel you. It was a scary time period for everyone, including the automotive repair industry.

Last April, auto shop owners were wondering, are my customers going to come into the shop? If people stay inside, are they going to drive less? If they drive less, are they still going to come into the shop as frequently? What if other industries are affected, and people have less money for repairs?

We were nervous like everyone else. But anyone who knows Tekmetric knows that we’re committed to driving the auto repair industry forward; we wanted to answer these questions and put Auto Repair Professionals’ minds at ease.

We also wanted to enable shops to not only endure the pandemic but also grow and come out stronger than ever before.

Strength in Numbers

If there’s one thing that makes us feel confident, empowered, and like we know what’s going on, it’s numbers. (Tracking shop performance and providing insights is kind of our thing).

We’ve seen the power of metrics in shops across America, and we know that customers, service advisors, technicians, and the entire auto repair industry benefit when auto shop owners can make informed decisions.

So we launched the TM-500 Index. The TM-500 tracks the Average Repair Order and Car Count of five hundred auto repair shops located across the United States. But data don’t mean squat if it ain’t easy to read. The TM-500 let’s users sort data by time and region so they can quickly explore trends.

Want to know the ARO and Car Count between the months of June and November of 2020? Simply set the time period “by month,” and the TM-500 will generate an easy-to-read graph.

Want to know if shops in midwest states had a higher or lower Car Count than southwest states last summer? Simply set the time period you want to observe, and hover over different regions on a map of the United States to learn how they performed.

Just as the Tekmetric system for auto repair shop management gives shop owners better insights into their shops, the TM-500 gives Auto Repair Professionals better insights into their industry.

But knowing is only half the battle.

A Catalyst for Digital Transformation

The auto repair industry has lagged behind almost every other service industry in how we utilize technology. Almost anyone with a smartphone can order a pizza, sushi, enchiladas, or any other food they want and track it while it’s being delivered to their door.

Meanwhile, someone paying hundreds or even thousands of dollars for a new transmission still has to go in-person and deal with a half-legible piece of paper that feels greasier than the pizza and enchiladas put together!

But we get it. People are sometimes reluctant to change. For many auto shop owners, however, the COVID-19 pandemic was the “now or never” moment to fully digitize their shops.

In 2020, Tekmetric prioritized the rollout of several features we had been working on to help shops provide their customers with the experience they’ve come to expect in almost every other part of their lives. In April of 2020, we rolled out Text-to-Pay, allowing shops to invoice and collect payment via text message.

In November of 2020, we rolled out True Two-Way Texting to make it easy for service advisors and customers to communicate throughout the entire repair process.

Combined, these two features enabled Tekmetric users to provide a completely touchless experience to their customers without sacrificing the quality of their work or customer service.

Much like in other industries, customers who bring their cars in for repairs appreciate the extra service and transparency of a more enhanced, digitally assisted customer experience.

As we watched many shops grow by using Tekmessage and Tekmerchant, we kept an eye on the overall performance of the TM-500. We were able to see when shops began to bounce back in summer after an early slump, and developed other understandings about where the industry was headed.

Over time, we have added new metrics to the TM-500 such as state-by-state Labor Margin, Parts Margin, Effective Labor Rate, and Car Count to gain a more complete picture of these high-performing shops.

What Have We Learned Since the Onset of the Pandemic?

When making conclusions about where the industry is going, we like to be informed by both quantitative and qualitative data.

The numbers give us a factual look at what’s gone up or down, and talking to people in the industry helps us make correlations between how certain behaviors, processes, and principles affect these trends.

Between the data we gathered from the TM-500 and the feedback we were able to gather from talking to auto shop owners, here’s what we have learned.