How can auto repair shops improve profitability through parts management?

One common thing I see at repair shops is an overflowing parts return shelf. Often those parts have a thick layer of dust from sitting there for months or even years... The built-in core/parts return function...having a tool that helps manage this process will help protect your margins.

What product does Tekmetric offer for auto repair shops?

Tekmetric was chosen as a clear industry leader for auto shop management software for the third time this year. ... the best possible solution for running an independent auto repair shop!

Three Ways to Maximize Auto Repair Shop Profitability

The article advises auto repair shop owners to maximize profitability by streamlining parts and core management through setting strict return timelines, implementing a clear return process aided by tools like Tekmetric, and using reminders to ensure timely returns, thereby recovering money tied up in unused parts.

From what we see, there’s a lot that shop owners get right. They understand how to lead their teams, grow their shops, and bring trust and transparency to their customers. But as a former trainer and franchise performance specialist, I do notice a lot of little inefficiencies that add up.

Tekmetric touches every part of running your shop -- from managing customer information and measuring business metrics to facilitating digital vehicle inspections, repair order workflows, and even payment processing.

Because we have so much information available, we've collected and analyzed all that data at our fingertips to bring shop owners and general managers unique industry insights on how your shop can make the most money out of the work you already do.

1. Streamline Your Parts/Core Management

One common thing I see at repair shops is an overflowing parts return shelf. Often those parts have a thick layer of dust from sitting there for months or even years.

When I see those full shelves, I see dollars (think of a cartoon character with dollar signs for eyes—that's me when I see these overflowing return shelves). Don’t let those dollars sit on your shelves; put them back in your pocket!

Here’s how:

Set expectations with your team.

When I worked in the shop, we had a 24-hour rule for returns. Unless there’s a specific reason, no part should stay on the shelf for more than 24 hours. We were so tenacious about parts returns that the delivery team members started catching on and checking the shelves without us even asking.

Have a linear process for ensuring the returns are complete.

A critical component of Tekmetric is the built-in core/parts return function. From marking a part “needing to be returned” to “refund complete” and confirming the credit on your parts invoice, having a tool that helps manage this process will help protect your margins.

Set a reminder.

Put a reminder on your phone or computer for the last business day of the month to ensure that your parts shelf is clear. Tekmetric makes it easy to know which parts need to be picked up; just compare the Parts Purchased Report to the Parts Usage Report. If there are any parts, call those vendors and get them picked up!

2. Track Your Marketing Sources

What does your marketing strategy currently look like? Maybe you’re paying for signs on the local high school’s baseball field, or ads in grocery store brochures. Or maybe you’re paying for billboards on busy roads, or sending out bulk mailers.

No matter which marketing tactics you’re using, it’s vital that you track the return on investment for each campaign you roll out to maximize auto repair shop profitability. For instance, if you decide to spend $2,500 on a mass mailing campaign that features an oil change coupon, you should keep track of how many customers walk into your shop with that coupon.

After the coupon’s expiration date, you’ll know exactly how much revenue that mass mailing campaign generated for your shop. If the revenue wasn’t high enough, that’s a sign that you should try a different marketing tactic.

Tekmetric simplifies the process of tracking the ROI you’re getting from different marketing sources. Within Tekmetric, service advisors can select a custom marketing source for each and every customer. At the end of the month, or whenever you choose to end your campaign, you can look at the RO Marketing Source Report to see exactly where each customer came from.

After you figure out the best marketing tactics to get customers flowing through your garage, you can really rev up your auto repair shop profitability by having your team…

3. Leverage Digital Vehicle Inspections (Because Seeing Is Believing)

“Your coolant reservoir is trash!” the technician exclaimed.

The customer in the lobby had wanted more details on why the shop was telling him he needed to pay $1,100 for the repair, so a young service advisor had brought in the technician to explain.

That young service advisor was me.

Oftentimes, telling someone that something is wrong with their car just isn’t enough to close the deal. Everyone is tightening their belts these days, and seeing an estimate for a couple thousand dollars can be really tough for many people to swallow.

However, when customers can actually see what they’re about to spend their money on, there is a significantly higher chance of them approving the repair.

The Tekmetric Difference

We see it time and time again: when shops start using Tekmetric’s built-in digital vehicle inspections (DVIs) to show customers the issues with their vehicles using photos and videos instead of trying to just explain the repairs in words, it builds trust, increases approvals, and boosts your shop’s Average Repair Order (ARO).

You can try to explain a repair all day, but the truth is, seeing is believing.

Ready to grow your automotive business? Book a personalized Tekmetric Demo Here.

FAQ

Tekmetric just revealed two new tools to help shops win more customers and run a more efficient front desk. Get the full story. Watch the on-demand webinar now.

Generating new business in auto repair is hard. The industry is projected to grow just 2% over inflation annually over the next five years. The average American has 15 auto repair shops within 10 miles of their home, according to Tekmetric's internal data, meaning competition for every new customer is fierce. And across multiple industry surveys, roughly two-thirds of drivers say they don't fully trust their local repair shop — making it that much harder to win them over. The result: only one in 10 shops both grows and hits profit margins of 20% or higher.

"We know the competition to win new customers is fierce,” said Lauren Langston, president and COO, Tekmetric. “That means we need the right strategies and the right tools in order to do it."

Tekmetric's data shows that winning shops consistently focus on four outcomes: car count, average repair order (ARO), driver experience, and cycle time. Two new Tekmetric products — Tekmetric Digital Ads and Tekmetric Phones — are built to move the needle on all four.

Tekmetric Digital Ads

Winning new customers starts with being found. Tekmetric Digital Ads is an AI-powered add on that helps your shop show up where high-intent drivers are already searching for auto repair on Google Maps and Apple Maps. Because it connects directly to Tekmetric, you can see exactly how your ad spend translates into real revenue, not just clicks.

"It's really hard to see what's working. One of the superpowers of this product is that it's connected directly with Tekmetric," said Jared Haleck, chief product officer, Tekmetric.

Tekmetric Digital Ads is in early access now and rolling out to selected customers.

Tekmetric Phones

Every missed moment at the front desk has a cost. Tekmetric Phones gives your service advisors the customer context they need — instantly, the moment the phone rings — so they can spend less time looking things up and more time taking care of customers.

"Service advisors especially are loving it,” Haleck said. “It just saves them so much time. It creates so much convenience for them.”

Tekmetric Phones is in beta, available for customers on RingCentral.

Watch the On-Demand Webinar

Langston and Haleck walked through all of it — the industry data, live product demos, and what's coming next — in their webinar, "Building for the Results-Driven Repair Shop."

The recording is available now. If you want to see exactly how these tools work and what they can do for your shop, this is the place to start.

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.

We can't deny it, we're customer obsessed. That's why we went out of our way to visit shop owners who rely on Tekmetric every day! And part of why we're so customer-obsessed is because of how much our customers love Tekmetric, and its ability to empower shops.

That's why we’re celebrating another season as the leaders in the industry for shop management software!

Once again, for the third time in a row this year, G2 users have chosen Tekmetric as the leading solution for managing and revolutionizing their independent auto repair shop.

Tekmetric Chosen as the Clear Industry Leader

For their latest round of awards, Tekmetric was chosen as a clear industry leader for auto shop management software for the third time this year.

We've said it before, and we'll say it again, this is all because of shops like yours!

All the amazing independent shops that do great work every day with Tekmetric, the shops that keep people's vehicles safe and reliable. The heroes that get their customers back on the road every single day!

We were just chosen because you all love us so much!

There’s Always More to Come!

Thank you! Thank you for partnering with us, and thank you for helping us create the best possible solution for running an independent auto repair shop!

We're excited to be awarded and regarded so highly, and we strive to keep that level of excellence and support at every step in your shop.

Tekmetric is always being updated, and we’ll never stop working with and supporting shops to help them run efficiently and with fewer headaches, so you can focus on doing what you love!