Automotive Recyclers Association

Is faster better? In the small town where we used to run a full-service shop, occasionally we would get some pushback from customers about the cost, and the time it would take to perform an oil change. “I can have it done over at the speedy lube for only $19” was the common utterance. as most of you know, in a sense that is probably true on the surface. but does it really work out? let’s take a look at the bigger picture.

You just pulled into the speedy lube where they advertise a fifteen-minuet oil change, and are greeted by Larry, Daryl, and his brother Daryl. "i need to get my oil changed in a hurry" you tell them, “And I don’t want to pay very much. can you do that?" "we sure can" they answer as they direct you to the waiting area. after browsing through the magazines that look to have been there since larry, daryl, and daryl were a known thing, you check the clock to see where you are at in the 15-minute oil change. you have been here nine minutes and through the partition you can see the boys trying to get your car lined up on the lift. "strange" you think to yourself," thought they would be almost done by now". so, you pull out your phone, check up on some stuff, clean out about forty junk emails, look at a couple of videos, and just as you glance up to the clock which now shows you have been there twenty-two minuets daryl comes into the waiting area holding an oily dripping mess. "this here plastic thing that holds your oil filter in broke while we were changing it. the parts store doesn’t have one in stock, we are calling the dealership to see if they have one." there is now no way you are going to make it back to the office by the end of your lunch break. not only that, but this oil change also just got a whole lot more expensive. while this sounds a bit exaggerated, many of you have experienced something a lot like this. at that point, there is little you can do, and no matter what you do it is no longer going to be cheap.

We experience this in the auto recycling industry from time to time. How often have you had a customer tell you about how they can get it cheaper online? for many of us this is a daily occurrence. is it true? could be. is the value to your customer going to be there? maybe, maybe not. as a business that sells recycled parts, it is to our advantage to make sure our customers know the value in what we offer. How we price things of course is our own prerogative, we can set that wherever we like. Trying to have the most competitive price however is not always the best thing for our business. for starters the majority of your customers are going to be the bargain hunters. it does not matter that the engine you have is the used engine listed at the lowest price, but these people think that you should be willing to take even less. this can be frustrating. in days of old that was not always so bad, you would haggle and reach an agreement, they would take the engine and that was that. modern times see us with a customer that has higher, and not always realistic expectations. they now want your super low mile engine at the lowest price, they want you to ship it to them for free, and make sure they have it by Friday, but they also want it to come with a six month parts and labor warranty. all at the lowest price. that does not sound like something sustainable to me, and I’m guessing you don’t think that is a good way to operate either.

all of the extra things that people want, or the things we want to offer cost money. Shipping an engine costs a minimum of 50 dollars, probably closer to one hundred. that is just for labor and material, not the cost of freight. pulling an engine, making sure it is presentable, draining, etc. is not cheap. that process is going to easily cost you 100-300 dollars depending on what the vehicle is. there was the cost to inventory, the cost to purchase the donor vehicle, the cost to haul, the cost to move around the yard. it all adds up. so when someone asks us to discount it to a lower price so they can improve their markup, without them having to go through the effort we made, that is tough to be happy about. There are different solutions. a lot of yards overprice knowing they can always lower to make the sale. That makes sense so long as the high price doesn’t prevent the customer from reaching out in the first place. some yards don’t show a price at all so the salesman can feel out the customer and get the best price they can. This also makes sense except a lot of us assume that if no price is displays it is because they are embarrassed to advertise such a high price. Another way is to have the lowest hassle customer be the one that calls and buys your parts. When we track sales to this group of people we see higher revenue and lower returns.

That full service shop we had operated? We purchased that from an older gentleman who had been a good customer of ours for a long time. like since larry daryl and daryl were on primetime. He was a mentor of mine in a way and taught me much of what I know about diagnosing and fixing cars. He never asked us to discount the price on a part. ever. He rarely returned anything, unless it was defective, and then he only wanted a replacement. After we had bought his business (we didn’t negotiate the price, we paid his asking price) we were doing some remodeling and found dozens of parts we had sold him over the years. I asked him about it, and he said they were parts that either his customer never showed up for, or they ended up not being what was needed, and he didn’t feel right asking to return them. This should be your target customer. we as owners and managers will bend over backwards for someone like that. this same man also taught me that an oil change involves so much more than a dump and pour. He checked the tire pressures, even on the spare. If it had grease fittings they got greased. He washed the windows while he waited for it to drain. He used the sweeper on the floormats. He only used quality synthetic oil and made sure it was the right grade. The filter was going to be a good one too, not a junky orange one. total cost for this oil change was usually around 60 dollars. cost more? yes. better value? definitely. As used part sellers we can and should strive to bring that kind of value to our customers. Of course, not all of your customers will appreciate this, they can’t. It is ok though as they don’t have to be our "target customer". Take care of your good customers and they will take care of you


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