by Doug » Tue Jul 23, 2002 8:59 pm
The parts gross transfer and discounting should not make or break the whole deal for the b/shop.
What they are really selling is *labor*.....and that's where the real gross should be. Parts and materials just go along with the job.
It's unfortunate tha body labor rates are so low (Madmax, your example sounds *unusually* low, in my opinion) but, on the plus side, productivity and tech efficiency is usually very good in a body shop....so there's some offset there.
As far as the original question is concerned, I really feel more details about the operation are needed before any specifics are sugegsted. (Number of techs, sales volume, labor rate, average tech pay, average monthly expenses, etc)
But, in general terms, I've always felt that if a pay plan has anything to do with net profit then the manager should be given plenty of horsepower to take control of his own destiny and his own department....
If you don't want to give the horsepower, then simply pay on gross profit.
If yours is a smaller body shop, struggling to make a profit but moving ahead, you may have to pay a good man (if that's what he is) more than you *think* you can afford to keep things rolling and growing.
Cheers
Doug