You can do much better than break even on paint and materials
It's a common complaint among shops: Paint and materials have moved from once being a profit center in the shop to being at best a break-even line item or even a money-loser. Yet not all shops are finding this to be the case. Making money on materials is certainly tougher, but if anything, the profit on materials has become even more crucial to a shop's bottom line.- Limit product lines. It's not unusual for a shop to end up ordering two different brands of the same type of product. Do you really need 20 different polishes and compounds, or will a half dozen suffice? This duplication of products often happens because one technician likes a particular brand of abrasives, for example, while others prefer another. The problem is a shop ends up stocking more inventory than it needs. So while it's valuable to get technicians' input on the products and materials you stock and use, avoid buying and stocking multiple lines of the same types of products.
- Compare costs. One benefit to pruning down your materials product lines is that you can more easily compile a list of the products you've chosen to use. If a competing supplier wants your business, you can provide the list of the exact products you use — Brand X of 36-grit sanding disks in a 25-count box, for example – in order to get pricing that will allow direct comparison.
- Mask more judiciously. Sharon Brennan, office manager for Hassell Auto Body in West Babylon, N.Y., said her shop has cut down its costs for masking materials by only masking as much of the vehicle as is absolutely necessary, and by painting more panels off the vehicle.
- Do your ordering in the office. If your shop allows technicians to order supplies and materials, make sure they have a list of what products and materials they may order and which vendors they are to use. Centralizing purchasing within your office ensures your choice of products and vendors are used and will simplify order tracking and accounting for you and your vendor.
- Check your invoices. Mistakes happen, so regularly review invoices and statements to make sure you are receiving the discounts you've negotiated and that you're not paying for items you didn't order or didn't receive.
- Root out waste. The shops making the best profit margins on materials say eliminating wasteful use of products and materials within the shop is effective at boosting their bottom line. Make sure everyone in the shop is aware of how crucial materials profit is to the shop's overall financial health, and make managers responsible for watching for and correcting wasteful practices.
- Stock materials wisely. An unlocked and seemingly endless supply of materials isn't apt to promote the most efficient use of those materials. Some shops shelve a limited supply of products that are open to technicians, while keeping the rest under lock and key. Some shops log exactly what each technician uses from inventory. Whatever system you use, make sure it allows you some level of tracking so you can determine if product is being wasted or is walking out the door.
"We have locked up all our supplies and inventoried all of it, right down to the rolls of tape," says Denise Pina, operations manager for Brea Auto Body in Brea, Calif. "Our technicians essentially have to check out what they need. Once we all got used to the new system, it's been fine. And it decreased our costs 20-25 percent."
- Avoid common mixing mistakes. Paint company trainers say painters have a habit of mixing paint based on weight rather than volume. If a recommending mixing ratio is 4:1:1, that typically means four parts of base product, one part of thinner and one part of hardener. But some technicians using a digital scale will assume that means they can use 400 grams of base product and 100 grams each of reducer and hardener. But 100 grams of one product might not be equal in volume to 100 grams of another. So mixing should be done by using either weight measurements provided by the manufacturer, or volume ratios, but not a combination of the two.
- Have the best help the worst. Chances are, not all of your technicians would use the same amount of materials to complete the same job. One shop had all of its painters for one month dump their paint waste into their own individual drum or can. At the end of the month, it was easy to compare how much liquid waste each painter generated in comparison to their hours worked. And while it is more efficient to mix up slightly more than is needed rather than to stop mid-job to remix, over-mixing costs money in materials and waste disposal as well. So determine which technicians are the most efficient in their use of materials, and have them coach those who could improve.
- Consider new ways to mix, measure and track paint use. Showcase Collision Repair in Kirkland, Wash., uses an automated mixing system for clearcoat.
"You just pull the trigger on the gun and it mixes it and sprays right out," Ricky Johnson, general manager of the shop, says. "So you don't have to mix it in the mixing room. We've used it quite a bit and it's worked out pretty well. There's no waste because it's mixing in the line as you pull the trigger."
It also can pay to talk with your paint provider about the latest paint mixing scales that can reduce waste and improve your ability to charge for needed materials. Shop Owner Jeff Middleton was a little skeptical at first about the paint measuring and dispensing system he installed in his shop, Exhibition Automotive CARSTAR, in Kent, Wash.
"It's really unique," he says. "It actually pours the paint for you as you're mixing, so there's absolutely no error or overage on any toner. And our color matches have just dialed right in dramatically. At first I was thinking it was just something that may look good in the mixing room but that they'll never use it. But I tell you what, because of the color matches, the painter is all over it. It's saved a lot of time and materials in the paint shop."
Dave Brown, manager of Kniesel's Auto Body in Citrus Heights, Calif., said the invoices for materials that his shop's paint mixing scale produces helps ensure the shop bills for needed materials.
"Last year we started running all paint materials across the scale so we know exactly what we're using on every job," Brown says. "That was pretty huge. Some insurers will put an arbitrary amount of money for materials down and then we'll find out it cost us $50 more than what they paid. You wouldn't sell a $100 fender for $50. But since materials are in stock and you don't have an invoice on it, it's easy to lose a lot of money on it."
The paint mixing scale and invoicing system reduces this problem, Brown said.
- Don't overlook clips and fasteners. Similarly, Brown said his shop is among those who have added one of the inventory and tracking systems for miscellaneous clips and fasteners. Technicians can quickly use a scan tool to log which of these items they've used on the job.
"It allows us to print an invoice to prove and bill for what we've used," Donna West, co-owner of Southtowne Auto Rebuild in Seattle, Wash., said of the similar system in her shop. "We also like the convenience of having most of the clips and fasteners you need in one place in a nice organized cabinet. It's worked out well for us."
Consider tinting undercoats. More transparent colors can mean added coats, especially when trying to cover dark gray primer. Some paint shops track which colors are more transparent and in those cases use a tintable sealer or cover primer with a lighter color before applying color coats, saving time and materials.
Reward those who help. Who is most likely to see room for savings when it comes to materials? And who is most likely to see when a product or material is being misused or wasted? The technicians in your collision repair facility. So offer them some incentives for ideas that reduce waste or unnecessary materials use or costs. Some shops base some portion of bonuses on the shop's profit level on materials. Others put a portion of any savings into a party or tool fund, giving the technicians some say in how that money is used.