Increasing Paint and Materials Profits
Danny Baker isn’t a huge fan of lecturing employees during meetings. Yet, if necessary, the body shop manager will set a painter straight if he or she is being wasteful.
Baker, the collision center director at Platinum Werks Collision Center in Melbourne, Fla., takes anything that affects paint and materials (P&M) profits quite seriously.
“There’s not a lot of those meetings, but when there is,” Baker says, “we just explain to them that … there’s a reason for having the product measured properly.”
As a result of Baker’s diligence, few competitors measure up to Platinum Werks financially. Fixed Ops Business spoke with a handful of accomplished industry sources for this story, but none came close to topping the paint and materials gross profits produced by Baker’s facility, which tops 70 percent. On that note, here’s Baker’s tried-and-true advice for those hoping to boost P&M earnings.
Assign Inventory-Control Duties.
Baker has learned that you can’t give painters carte blanche when it comes to the size of their inventory. Otherwise, expenses can spiral out of control.
At Platinum Werks, which boasts an annual revenue of $4.3 million, the paint department’s inventory is checked twice per week by one specific employee.
“When it’s checked in,” Baker says, “it’s accounted for, and it’s also placed on a shelf so that it can be stored and basically kept on consignment, or kept in stock, until we actually need it.”
Include Painters in the Blueprinting Process.
If you want to rein in your department’s waste, it only makes sense to get employees like refinish technicians closely involved as you establish a gameplan for repairs.
“Refinish technicians and the painters, they’re the ones applying the product to the vehicle,” Baker says. “They also understand the complexity of what it’s going to take to make sure the color matches, to make sure there’s enough coverage on the items that we’re painting.
“I want to make sure that the people that are actually experienced and having the most touch time on the vehicle are the ones that are also involved in their paint checks.”
Track Your Usage.
Limiting wasted inventory is an obvious key to earning great P&M profits. Thus, Baker urges painters to measure product meticulously.
“They have to measure out every ounce that they actually used,” he says, “which allows us to keep control of our expenses.”
Additionally, Baker makes sure his inventory includes just one backup for each product, and nothing more. That way, employees think twice before using products excessively.
One oversight that rarely occurs: not asking insurance companies or customers to pay for every element of a repair.
“Anything that’s got over 15 hours of refinish time on the estimates, we actually print out and provide the invoice for materials,” Baker notes. “We provide them the invoices they need to show them our actual cost to do the refinish operations … so that we can show them there’s a legitimate cost there and we don’t just make that number up.”
Offer Employee Incentives.
Baker isn’t opposed to offering bonuses to staffers who help keep P&M profits ideal. The employee that leads inventory control at Platinum Werks, for example, takes home an extra $3,000 or so in good years.
“If the percentages come in over a certain dollar amount, they’re rewarded for paying attention and keeping it on track,” he says. “It’s based off a percentage that we set that we know is within industry standards, and we’ve added to it a bit. Because we know we have a good margin—so we make sure that we maintain that margin.”