Inflation & Business Profitability Explored
By Jason Stahl
It is time for body shops to take action, with all the turmoil going on in the collision industry, one repairer believes if shops don’t take a stand now, they’ll never be able to correct the injustices happening currently in the market.
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Jason Stahl has 28 years of experience as an editor, and has been editor of BodyShop Business for the past 16 years. He currently is a gold pin member of the Collision Industry Conference. Jason, who hails from Cleveland, Ohio, earned a bachelor of arts degree in English from John Carroll University and started his career in journalism at a weekly newspaper, doing everything from delivering newspapers to selling advertising space to writing articles.
We’re all feeling the pinch right now in very challenging times. Inflation is really socking it to us; the price of everything is going up, not to mention technician pay. And our labor rate isn’t budging. Oh, and then there’s COVID, angry customers, photo estimating, parts shortages, political turmoil, insurer staff reductions …. Did I leave anything out?
Steve Wurtz of Blue Ash Auto Body in Cincinnati recently reached out to me to express his frustration — and I think a lot of us are feeling the same way. Ten years ago, the “prevailing labor rate” in his area was $48 per hour, and paint and materials was $28 per hour. He says his refinish costs have doubled in those 10 years and allied costs have gone up 65%, yet the body rate is only $50 now and paint and materials (P&M) are $32.
“Do you want to know why we’re losing money on everything? It’s because we’ve allowed the insurance industry to dominate us!” says Wurtz. “We all have carriers who are impossible to deal with, and in my opinion, we need to stop doing repairs for those unrealistic carriers. And, while we’re busier than ever, let the shops that want to work for nothing have all the low-paying work.”
Wurtz suggests that shops not take out their frustrations on local appraisers or adjusters but rather write to the heads of claims for all insurance companies in their states to demand just compensation.
“If we don’t take a stand now, we will never be able to correct these injustices,” Wurtz concludes. “The timing is now for our perfect storm!”
Article Credit to BodyShop Business.
What impact had inflation on your business? Do you think the lack of proper annual increases have pushed the collision repair industry to a point where it does not make sense to do business anymore? Let us know in the comments below. Also, if you found our content informative, do like it and share it with your friends.
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