The industry is aware that the fluid service is a very important part of the vehicle today; however, I am still amazed how under equipped shops are to properly service the various fluid categories on a vehicle.
Consider the basic fluid services required today for proper and professional vehicle service, namely, system flush, carbon clean, oil flush and a transmission flush to start. All require specific equipment to perform the service professionally and all should be in the bays of a modern shop today.
What goes missing in the conversation is the profitability contribution each service can make to the shop.
Let’s examine a transmission flush as an example. Fill in your own numbers. Mine are low on purpose as I’m just using an example to show you the format but when you fill in yours you will be amazed at the profit potential:
| Service | Shop Cost | Service | Shop Retail | Gross Profit |
| Filter & Gasket | $19.12 | Filter & Gasket | $38.24 | $19.12 |
| Trans. Fluid 12 Quarts | $26.72 | Transmission Fluid | $53.44 | $26.72 |
| Labor (1.7 x $28 wages) | $47.60 | Transmission Service | $99.99 | $52.39 |
| Totals | $93.44 | $191.67 | $98.23 (51%) |
Purchase price of the equipment is approximately $5,000
Lease cost of equipment estimated $170 per month X 12 months = $2,040.00 or 1.7 flushes per month ($170 divided by $98.23GP)
Recommended transmission flush every 50,000 miles
Based on 600 clients averaging 11,000 miles / year
(600 X 11,000 miles. )/50,000 = 132 flushes X 98.23 = $12,966.36
Less: Annual Lease cost - 2,040.00
Additional NET Income $10,926.36
Now keep in mind, while the machine is performing the service, the technician is also performing other work on the vehicle so in reality, the total gross profit for the hour rises dramatically and the “efficiency” of the technician also dramatically improves.
Do the same format analysis on each of the other fluid services and I think you will find the potential for Net Income with them all combined is over $100,000 per year based on a client base of 600.
In reality, the question that must be answered is how many services should we be performing per year from each fluid service in our shop based on our actual client base? If the math says, based on our client base, that we should be performing 135 Transmission Flushes (from example above) but we only did 68 last year, what is wrong with our internal shop processes? We are missing incredible opportunities. It has nothing to do with getting new customers/clients; it has everything to do with properly and professionally servicing our current client base already coming through the door.
Review the internal shop processes as to how the vehicle is inspected in your shop. Is accountability for the inspection in check? Are the service intervals being placed by calendar date for future client contact based on the mileage the vehicle is driven? If the service is deferred is it being followed up properly?
Management’s role is to ensure all the right processes and checks and balances are in place so nothing falls through the cracks. Proper vehicle servicing of all fluids is but one area where each shop should be doing a full review.
The math does not lie. How much is your shop missing per year?
About the Author
Bob Greenwood
Robert (Bob) Greenwood, AMAM (Accredited Master Automotive Manager) was the President and C.E.O. of Automotive Aftermarket E-Learning Centre Ltd. (AAEC). AAEC is a company focused on providing Business Management Resources and Development for the Independent Sector of the aftermarket industry utilizing the Internet environment. AAEC content and technology is recognized as part of the curriculum of the Fixed Operations Diploma and the Aftermarket Degree courses taken at the Automotive Business School of Canada in Georgian College located in Barrie, Ontario, Canada. This school is the leader and only college in Canada that offers an automotive business education. AAEC is also recognized by the Automotive Management Institute (AMI), located in Colleyville, Texas USA, allowing 80 credits for successful completion of the AAEC E-Learning portion of the site towards the 120 credits required to obtain the reputable Accredited Automotive Manager (AAM) designation. The Automotive Management Institute’s Accredited Automotive Manager designation is the first business management accreditation exclusively for the automotive service professional. To date, AMI various programs have attracted more than 212,000 enrolments throughout North America.
Greenwood died on Sept. 9 in Surrey, British Columbia, Canada, from a heart attack. He was a regular contributor to Motor Age magazine and will be greatly missed. See some of his recent work here:
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