BULK OIL

[jeff f]

I WOULD LIKE TO HEAR ABOUT HOW OTHER DEALERSHIPS DEAL WITH BULK OIL AND THE EQUIPMENT USED TO DISPENCE IT, CURRENTLY WE USE VALVOLINE AND THEY SUPPLIED THE EQIPMENT 5 YEARS AGO AND THEY SERVICE THE EQUIPMENT ALSO SO EVERY TIME THERE IS A PROBLEM WITH EQUIPMENT THEY TELL THE PARTS DEPT TO GET IT FIXED, WELL NOW WE ARE IN THE PROCESS OF BUILDING A NEW DEALERSHIP AND WANTING TO GO WITH GM OIL BUT WE HAVE TO BUY ALL THE EQUIPMENT ,PUMPS, TANKS, NOZZELS,ETC AND INVENTORY CONTROL , WELL MY QUESTION IS DOSE MOST DEALERSHIPS CHARGE THE PARTS DEPT FOR THIS EQUIPMENT OR THE SERVICE DEPT ,OUR SERVICE MANAGER SEEMS ALL THE EXSPENCE WILL BE CHARGED TO THE PARTS DEPT ,INCLUDING MAINT. AND REPAIRS THIS DOSENT SEEM RIGHT TO ME . APPRECIATE ANY INPUT YOU HAVE ON THIS .

ALSO THANKS FOR ALL OF YOUR INPUT ON MY OTHER TOPICS

THANKS JEFF

[Chuck Hartle]

Well Jeff,

It really sounds like you have a fixed operations director who is hell bent on making the service department look like a super hero at the parts department expense. Based on these one-sided offerings you have I would bet he is not being paid on anything but service still?????

We refurbished our oil equipment via Mobil and they paid for everything,(including an depensing measuring meter so that we could control how much oil went out on each job from the technicians counter. We had to agree to purchase from Mobil for 5 years to get that deal.

How is the oil brought into your dealership? Is it brought into the oil inventory and do you make a profit in parts for despensing it or does service make all the profit? If you are putting the oil directly into your parts account than your service manager should at least split the expenses 50/50. I have never heard of a parts department taking total liability for oils unless they had control, which is usually not the case...

More important, right now, I would certainly look for a oil distributor who you can work a deal out with for the equipment. Almost all of them do it to get the business.

Chuck Hartle'

[Gary J. Naples]

Hi Jeff,

Chuck makes some good points. In all of the dealerships that I was ever involved with the despensing equipment was furnished, at no cost, by the oil distributor that the fluids were purchased from. All maintenance was also performed by the oil distributor at no cost to the dealerships.

I would definitely shop and procure a reliable oil distributor that would be willing to supply the dispensing equipment in exchange for your business.

Gary J. Naples

[jeff f]

well rigt now the oil dist. dose take care of the equipment at no charge,and i have found dist. that are willing to do that now,but to go with gm oil they will give us a no intrest loan for three years for equipment and that is the charge that my service manager says is the responcibility of the parts dept to pay the full expence of this loan, I do put the oil in my parts dept inventory so i do make profit from the oil


thanks jeff

[Robert a Bamert jr]

I agree the equip should be suppied by the oil co. I'm not sure which manf, your with but with GM's bulk oil program it is to much $ just for the oil,without the equip. being fig. in.You should really shop around call other dealers in your area see who there useing most of them would probally want your business,especially if they're allready delv. in the area, and it'll make you the hero instead.

[kyates]

At our dealership we bought and paid for the equipment when we built six years ago. We are currently contracted with a distributor who did supply equipment other than oil dispensing stuff. But the original dispensing equipment was put to the shop equipment asset account (282). Ant repairs or maintenance charges are billed to the Service dept equipment repair account (90D).
Hope this helps...
We originally purchased the equipment ourselves so we wouldn't be under any obligation to any company. That seems to have evened out the playing field when searching for suppliers.

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[Chris]

What???? Expense bulk oil equipment to parts or service? I thought that was building improvements. An asset in accounting terms.

If they're going to expense parts how about make bulk oil another profit center? Make it stand alone and be required to have it's own profit and loss financials? Have an inventory account for bulk oil, debit all expenses, credit all profits?

Hmmmmm, Now that's an interesting and novel concept. I think I like it!!!!!

I can see it now!!!!

Proation over 36 months for a 500 gal oil tank and despensing equipment.

Actual cost per quart is $1.12, inventory control system cost is set at $1.34, each quart of oil you receive you debit inventory at the inflated value and take the profit on the back side.

A bean counting comptroller would be left salavating at the thought.

Sure beats the heck out of expensing the parts department.

In all actuality, if an oil supplier trid to charge for equipment I'd expect the cost of the product to reflect a drastic cost reduction.

[CRAIG]

JEFF, MY FIRST QUESTION IS, HOW IS YOUR OIL BILLED? PARTS GROSS TRANSFER WITH SERVICE? MY STORE IS A DUEL AND A CAN'T SEE THE PURPOSE OF USEING EITHER FACTORY FOR OIL. THE PROGRAMS ARE OK BUT WHY BOTHER WITH A NO INTEREST LOAN WHEN THE LARGER OIL DIST. WILL STEP UP AND PUT IN THE EQUIPTMENT FOR NOTHING. IF YOU USE ENOUGH GALS YOU CAN NEGOTIATE A PRETTY GOOD DEAL. 6 MONTHS AGO MY DIST SPENT $4,000 ON OUR UCD BIULDING THAT WE JUST BUILT. THIS WEEK THEY CAME TO ME AND SUGGESTED REFURBISHING THE DEALERSHIP EQUIPTMENT TO THE TONE OF $6700. IF ITS NEW AND UPDATED THEY WON'T HAVE TO MESS WITH IT ON A EMERGENCY REPAIR.
IT'S UP TO YOU BUT IF PARTS IS GOING TO BARE THE EXPENSE HAVE GET A GOOD WORKING RELATIONSHIP WITH A DIST., THEY WILL WORK FOR YOU AND YOU CAN ELIMINATE THA EXPENSE.

[Mike Davis]

Nothing is free guys! Take a good look at what is out there and what they are charging. The only difference is in how they are billing you stand alone or oneach gallon of oil that you purchase. I spoke with an oil distributor and told him to remove all of the fluff and give me a bottom line price that included no equipment, hats, jackets, oil change stickers, mats, etc. and the price was reduced $1.00 per gallon. It looks to me like we are all paying for the equipment in these programs and a pretty good mark up as well. Where does the profit go, that is where I would place the expense but that manager has to have a say in what is purchased. If the service manager wants the "Cadillac" oil delivery system they should pay the difference between that and the basic delivery system that a parts manager wants to install. they will gain additional profits from the efficiency that the "best" system should deliver. Best answer, we've talked it to death on this board and it is a shared pay plan that rewards cooperation and does away with these distracting squabbles and allows us to proceed to the task at hand, taking care of the customer and generating "dealership" profits. One more example of departmental concerns interfering with the business of the dealership.


Mike

[jeff f]

my oil is put in to parts inventory 242 and billed on repair orders but yes we do split gross profit with service dept, but my main question is is there any one out there that went with gm oil program and equipment and used this gmac loan and if so witch dept payed the full bill for the loan