Business Profitability Explored
We explore the pros and cons of offering a mobile repair service to your customers for smaller jobs like dent repairs. Should you outsource mobile repair services for your business?
As a shop owner, there’s a fine line to walk between deciding whether to complete all repair orders in-house or use a mobile repair service to assist you in high-volume repairs such as dent repair or window replacement.
On one hand, many shop owners are hesitant to partner with another business that will typically pocket between around 25 percent to 50 percent of the revenue for repairs being completed. On the other hand, some shop owners will argue that any revenue is better than losing a customer to an outside vendor.
So, is there a formula shops should follow when it comes to picking up the phone to call in extra help? The short answer is no, and factors like location, competition from other shops, and finding a reputable vendor to partner with all weigh into a complicated equation.
The Pros of Cultivating Vendor Relationships
According to FenderBender’s 2022 Industry Survey, an overwhelming number of shop owners (88 percent) say less than 10 percent of their business is through outside vendors.
What that number doesn’t tell you, however, is when those shops are taking advantage of outside help.
According to Rodney Vance, owner of PDRUSA1, a company that specializes in paintless dent repair, body shops won’t hesitate to use companies like his when there are major weather events, particularly hail storms.
“When there are major weather events across multiple states, we get deluged with calls from shops needing help because they don’t have enough technicians to handle the volume of cars coming through their front door,” he says.
Vance estimates that in the event of severe hail storms, a shop may receive hundreds, if not thousands, of inquiries from potential customers looking to repair dent damage. In situations like those, he adds that it’s important to vet who you choose to work with, since many “pop-up” businesses will sometimes offer a shop a 40 percent or more of the revenue share, but as the saying goes, if it looks too good to be true, it probably is.
“As a shop you’re going to get a lot of cold calls from mobile vendors offering you their services,” he says. “I offer shops 25 percent of the revenue back to them, but what I do for the show owners is much different than the guy who is offering a much larger discount.”
Vance says the first thing he’ll tell a body shop is that he writes in CCC One, a popular collision estimating software. By doing that the body shop simply needs to take his estimate and download it onto their system, which frees up their service writer to focus on other jobs.
“We do all the estimates, do all the imagery, take all the pictures, and try to make the process as simple as possible for the shop,” he says.
He adds that reputable companies will also ensure they stay within the guidelines of a shop’s DRP guidelines, and that they have an in-depth knowledge of what each insurance company allows as far as payments, etc. Partnering with a vendor that doesn’t stay within that DRP perimeter puts a shop at risk of being red-flagged by the insurance company.
“It doesn’t matter if you’re working with a dent repair company, glass repair, whatever,” he says. “If they aren’t doing things the right way, it’s going to immediately make you gun-shy about partnering with an outside vendor in the future, and if the job isn’t done to the standards you hold for your shop, your reputation will take a hit. If a customer is happy with the work you’ve done they might tell three or four people, but if the job was done in a shoddy or unsafe fashion you can be sure they’ll let 10 times as many know about it.”
Should You Invest in Adding Services?
Jim Osborn, owner of Concho Collision and Auto Glass in Texas, says after running the numbers he realized he was paying his mobile glass vendor as much as a full-time employee. He made the decision to make that person a permanent member of his shop’s team.
Osborn is an example of the trend of more body shops bringing traditional mobile services in-house, and says he’s seen a notable jump in the shop’s revenue.
“We were losing as much as $5,000 depending on the month on outside glass vendors,” he notes. “In the end it just made sense to add someone who could focus on bringing that money back to the shop.”
And, as Vance mentioned earlier, Osborn struggled getting his glass vendors to perform proper work and service his accounts to fit his shop’s processes. The shop went through three different vendors before he made the move to bring the service in-house.
“The vendors were busy themselves, and had trouble coming to the shop for same-day glass repairs. As a result, customers at the body shop often had to wait an extra day or more before they could pick up their vehicles,” he said.
While Osborn initially decided to have a vendor on-site full time, eventually he realized that financially it made sense to permanently add the service for his customers.
“We decided at first to hire a full-time glass repair technician to work here just to remove windshields or install new glass,” Osborn says. “Then, because he was bringing in a lot of work, we decided to go into the glass sales side of the business.”
The new glass repair area gets roughly 50 jobs per month. In addition to the physical, non-moving location, the team also implemented two mobile glass repair vans so they could work for other businesses outside the area, like other collision repair shops not considered competition, and capture more fleet work.
“We do service a couple shops located outside our area if they don’t consider us competition,” Osborn says.
Osborn adds that the team at the body shop and his glass repair business begin working seamlessly to coordinate repairs so customers were back into a safe car in a shorter amount of time.
Finding the Right Partner to Fit Your Needs
The bottom line when it comes to mobile repair is deciding whether the extra revenue source is worth the potential pitfalls that can come with pairing yourself with an outside vendor.
Vance suggests doing your research by searching for mobile services being offered in your area, checking the Internet for customer reviews, and deciding exactly how you want the partnership to work before coming to any agreement.
“There are some bigger names out there that you’re likely familiar with, or a more established name like Dent Wizard,” he says. “It doesn’t mean that a smaller business can’t be a great long-term partner, but doing your due diligence before bringing anyone in will save you from big headaches down the road.”
And as was the case with Osborn, if you want to bring an extra service in-house, make sure you’re considering more than just your bottom line.
“In the end it’s about giving the customer the best repair experience possible,” Osborn says.
Article Credit to Fenderbender.
Do you outsource your small repair services to a third-party supplier, or do you prefer to perform them in house and retain the client? Let us know in the comments below. Also, if you found our content informative, do like it and share it with your friends.
Click HERE to join the CRA Industry Newsletter, it’s FREE
CRA is the innovative and trusted source for motoring information and the latest news to help entrepreneurs, business owners, managers and people working in the motor industry to stay informed and change their world. Get the advice your need to start, glow, and lead your business today. Get unlimited access to all articles.