Service & Parts Pricing Disagreements

[zsmith]

imfixed - rarely does catering to the service depts (or sevice advisors) needs equate to catering to the retail customer. Usually pricing adjustments are made to correct mistakes, not to sell the job. If your prices are fair everyone should stick to them and of course ALL parts purchases must go through the parts dept.

[chrabo]

Sound like a bunch of whining and not enough talking. When the counterman couldn't get the tires that he originally quoted his first reponse should have been to get with the advisor, let him know and go from there. No catering to, coddling, just basic sense.

[3760Guru]

I have to agree with chrabo,

It's not so much catering to the service department, but rather the mutual service customer. There are several things we do not know about the situation, though. Did the parts department get the tires without letting the advisor know the originally requested tires were not available? Did they try to keep the prices the same, and absorb the difference to GP (since counterpeople are typically paid off of GP), and was the customer informed about the diference?

From a CR standpoint, would putting on the cheaper tires been a good fit for the customer? Dealership service usually isn't the same prices as the independent stores, but that is where the level of service steps in. You can go into any McDonalds and get a burger that is similar to the best steakhouse in town. The difference is the atmosphere, and the way you are treated. Having said this, today's consumer has more options available to research pricing, products, and perform comparisons. If you think that they're not, go out and google some of the competition & see for your self. They're gunning for your business, and if you aren't making decisions that will be assistive toward their satisfaction, then you're just the Mcdonalds.....

Just my $.02

[wellzy]

I see an issue with both departments here. I've always thought tires should have a flat mark-up. This will eliminate the higher mark-up with a matrix.

I don't agree with the advisor calling the tire distributor, but he must have had a feeling it was a high mark-up. I think the advisor should have gone to the parts manager first. Now the advisor will be suspicious of all mark-ups.

Just my 0.02

[JOHNV44]

Selling tires at a new car dealership is probably one of the toughest thing for the customer to handle. Although, history has shown that 75% of all tires sales are performed by the first company or person to tell that customer that they need tires. Most car dealerships will not make $100 per tire like zsmith does. The majority of the money is being made around the tires (i.e. brakes, struts, suspension, steering, etc.) Mark up on tires is a regional thing. If there is no tire store near you, then you can mark up tires as much as you want. If you have tires stores around you, I would not count on making a lot of money on tire sales.

[PartsJD]

I think zsmith said $100 per set not per tire, which I think is about right. We use the suggested retail price from our Lexus program and I think we average about $30 mark-up per tire and if need a tire from another source we go with a $25 mark-up.

That said I do not see that the advisor did anything wrong, he just made a phone call to compare prices.
But if he had questions about the tire that the parts department brought in I would have rather seen the service advisor gone to the parts advisor or parts manager with his concerns instead.

[BIG ORANGE]

This is for zsmith. What is your sercet for selling 20,000.00 a month in tires. The best that I can do is about 12,000.00 and the average is about 8,000.00. I have tryed everthing to fix this problem. Service advisor stick each car that comes in but we just can get over the hump so to speak.

[zsmith]

big orange - used cars, especially certified used cars, is a big part of it. Also, we have convinced the techs and the advisors that we stock or can easily get the tires they need. Our tire dealer is easy to deal with and delivers quickly, no follow up calls (where are my tires?) are ever needed. We don't have any special incentives, like spiffs, on tires. I'm not sure what the techs get for a mount and balance but they seem willing to inspect and sell tires.

[LIFESENTENCE]

You must have a much different used sales department than we have. Any tires they purchase are the cheapest thing available, and we only mark-up internal tires 10%. All other tires we use the GM retail price, or mark up 25%.

[OLDPARTSGUY]

Sales should ALWAYS pay retail as a rule. There will always be the occasional transaction where you have to reduce prices but should never become a routine occurence

jmo