Highway & Heavy Parts surveyed over 500 repair shops nationwide and found that of all the repair shops surveyed, bottom line profitability is the biggest concern for 2018. However, when asked how they plan on boosting profitability, many repair shops didn’t know where to turn. As parts and overhead costs get more expensive, and customers continue to pressure for lower prices, it’s easy to feel pushed against a wall. The fact of the matter is, time is money; and one of the largest expenses for any business is labor costs. If you can control the labor costs for your repair shop, you can control your repair shop’s profitability.
Here’s what we found in our nationwide survey:
- The average repair shop spends $31,200-$62,400 each year searching for parts.
- Nationwide average total labor costs are $120 per hour.This figure includes mechanic labor rates averaging $75-$125 per hour, as well as $20 per hour in repair shop overhead costs.
- The average repair shop spends 1 hour per job finding parts.Think about it. How much time do you spend calling vendors, checking availability, and trying to calculate shipping times for your jobs?
- The average repair shop completes 5-10 jobs per week.
Calculating the Cost of Finding Parts:
- Calculating the cost of finding parts doesn’t need to be difficult. All you have to do is know your labor rate, about how much time you spend finding parts for each job, and roughly how many jobs you complete each week. Multiply them together, and you’ve got your cost of finding parts:
[Total Labor Cost Per Hour] x [Hours Spent Finding Parts per Job] x [Number of Jobs per Week]