by PaulB » Thu Aug 25, 2005 1:32 pm
RPAs are a pain indeed...but being a "team player" I do my part to help out with them. By that I mean when they are dropped off, I note that they are here, and put them in a storage room so they don't disappear. After that, I'm done.
About a year ago, I did an "apples to apples" comparison on some RPA packages that we have ordered regularly compared to if we did the accessorizing in-house. Bottom line was overall cost on the vehicle was higher, but doing them in-house added to parts gross, service gross, overall vehicle gross (accessories priced at list plus install), and increased salesperson commission. For example, tubular assist steps invoice $387, sticker price $450 as an RPA. (sales gross: $63); in house cost (installed) $465, retail $575, resulting in $110 gross profit to sales. Add to that the 20% markup that Parts made ($70), and the 1 hour labor that service billed and you have more dollars coming in to your overall business than when done as an RPA. (My numbers might be a little out of date as I did this a year or so ago.)
Additionally I tried to sell the idea of flexibility in accessory offerings, and the lack of headache on a swap ensuring that the RPA went with the swap. The DP saw the increased price to the vehicle and chose not to bring all accessories in-house. I'll agree that it could be a tougher sell especially for those that shop around, but good sales technique could make up some of that too.