SHOP FORUM: Should there be leeway in menu pricing?
A shop employee writes:
"I am not a big fan of menu prices, but I do understand that some things must really be prices that way. For example, one of the things in our shop that is menu-priced is brakes. Labor, specifically, on any brake work is preset, including anything from standard front brake service to the installation of rear wheel cylinders. Yes, believe it or not, the labor for the rear wheel cylinders is preset—no changes allowed. And it makes no difference what the vehicle is.
"There's one big sticking point with me that may seem simple, but I have been unable to convince the owner or manager to change. When a front brake job is done on a vehicle with a floating rotor (what I call a slap-on rotor) the labor is the same as doing a brake job when there is an inner- and outer-bearing to repack. We don't charge any extra for the removal or replacement of wheel seals or repacking the bearings. It has always been my experience in the past to charge at least a little extra for that work.
"I have been told numerous times to not charge that extra time. I have even had my tickets changed to a lower amount then what the customer was quoted and sold. I can't get past this point for a couple reasons. The flat rate techs we have are not happy with how they are billing these jobs, plus I am paid on a percentage of shop gross profit. I mean, don't you think there should be extra time charged if it takes longer, and jobs should be billed accordingly?"
Tom Ham responds:
"While you may be technically correct, this is probably best left alone since you've already brought it up to the owner. I would also thing that the techs might be able to make the case better.
"The good news is that wheel cylinders and packable wheel bearings are decreasing rapidly. The wheel bearing issue is all but gone at our shop; we might see one every few months. I mentioned drum brakes to another member here one time and he said with a grin: 'What are those?' He has a Euro shop."
One forum member replies:
"We used a canned front brake job that includes packing wheel bearings. We don't discount if it's a 'slap-on' rotor. The work order reads: 'Replace front brake pads, resurface/replace rotors as needed, service calipers, clean and repack wheel bearings (where applicable).' We always wash our rotors in the hot water jet spray cabinet. If wheel bearings are involved, they get jet washed too…. I reserve the right to adjust prices up or down as the job dictates. It seems that the less worthy the car, the tougher the job.
"You might think that cars that need new rotors are really a gravy ticket with this pricing, but there is usually a lot of rust to clean up on those cars. Rust is usually the reason we replace rotors."
Another forum member responds:
"The canned jobs in our shop are for diagnosis only—all actual work is by flat rate. How can you replace front discs on a Chevy 4WD Colorado for the same labor time/dollars as a Toyota Tacoma? How would your tech feel about that?"We compete on quality at our shop, not on price, and our customer base comes to us for that reason. We redo a couple of brake jobs a month for customers that were done at a menu-based shop due to compromises in the work/parts to keep the profit at quoted prices."
Another forum member writes:
"I know this may be a little off-the-wall, but I have to ask. When you go to your doctor, does he/she have menu pricing? Do they prescribe the drug-of-the-month? Not likely. And what is most surprising is that the human body hasn't changed in thousands of years, but cars change all the time.
"I always tell shop owners I work with that the closer you can get to running your business the way doctors run theirs, the better you will do. I know it's not easy, but then again, when shop owners tell me that their customers are too cheap, I only ask one question: 'Who attracted them?'"
The questions and responses are posted on the Automotive Management Network website, which is operated by Deb and Tom Ham, owners of Auto Centric (formerly Ham's Automotive) in Grand Rapids, Mich. The comments have been edited for clarity and brevity.
SIGN UP FOR NEWSLETTERS
Do you have an opinion about this story? Do you have some thoughts you'd like to share with our readers? Tire Business would love to hear from you. Email your letter to Editor Don Detore at [email protected].