96 - (Pt. 2) How to Mark Up Automotive Parts – Expert Strategies with Cecil Bullard of The Institute

96 - (Pt. 2) How to Mark Up Automotive Parts – Expert Strategies with Cecil Bullard of The Institute

March 27th, 2024 - 01:03:19

 

Show Summary:

In this follow-up episode, John Heller from PartsTech and automotive industry coach Cecil Bullard dive deeper into the critical topic of parts markup for auto repair shops. They unpack the emotional challenges shop owners face, the practical application of markup matrices, and how to maintain profitability while managing customer expectations. Cecil shares real-world examples, answers live questions, and explains how even small changes in parts margin can significantly impact a shop’s bottom line. This is a must-listen for shop owners ready to take control of their financial future.

 

Host(s):

John Heller, PartsTech

 

Guest(s):

Cecil Bullard, Founder & CEO, The Institute

 

Episode Highlights:

[00:04:15] - “Shops are leaving thousands on the table annually due to insufficient markup strategy.”

[00:07:41] - Cecil breaks down the jobber and dealer parts matrices to reach 58% gross profit margins.

[00:12:03] - Oil changes and low-margin jobs: how to offset with higher markup elsewhere.

[00:18:28] - Real example: how adding $200 to engine jobs improved profitability without losing customers.

[00:25:33] - Defining margin vs. markup, and how each impacts your gross profit.

[00:29:46] - Three reasons why a matrix might not be working for your shop—and how to fix it.

[00:37:04] - Emotional discounting at the counter? Why it’s killing your margins.

[00:45:25] - What happens when your margins slip: the math behind needing 26 more cars/month.

[00:56:54] - How to respond when customers price-check you against Amazon, or other avenues.

[00:59:18] - Cecil’s message to the industry: Stop letting customers bring their own parts.

 

In every business journey, there are defining moments or challenges that build resilience and milestones that fuel growth. We’d love to hear about yours! What lessons, breakthroughs, or pivotal experiences have shaped your path in the automotive industry?

Share your story with us at info@wearetheinstitute.com, and you might be featured in an upcoming episode.

 

👉 Unlock the full experience - watch the full webinar on YouTube: https://www.youtube.com/watch?v=XXyincl3Cwk&t=1s

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John Heller: Hello, everyone. Welcome. We'll give a few more seconds here to let everyone join in. We know we had a lot of, a lot of interest and response from part one of this. So we thank you for taking some time to join part two. We'll make sure. We give a little time for everyone to make it in.

John Heller: All right, let's get this started. So again, as I mentioned, welcome. Thank you everyone for joining us here on this Wednesday. Hope your week is going well. We're glad you've joined us for this part two on this very important topic of parts markup. We had a great discussion last time with our guest speaker Cecil, and we decided to extend this into a part two, so we could dive a little bit deeper.

John Heller: into a better understanding common pitfalls and how we can work around them and a parts markup strategy in your shop. So I would encourage you as with last time, if you joined us, please use the chat function to post questions. Last time we had a lot of great questions and unfortunately we weren't able to get to them all.

John Heller: But I will do my best to, to look through the chat and try to summarize some common themes around questions and make sure that I'm surfacing those to Cecil and at the end, we will take about 10 or 15 minutes as well to get through more of the questions that you pose in the chat box as well. We understand your time is valuable.

John Heller: So first again, thank you for joining us. If you do need to hop at the, at the end. Of at the end of the presentation, so to speak, and can't stay for the Q and A, please know that we will be sending this out to not only those who have attended, but to the everyone who's, who's registered, so you can view and, and listen into that, that Q and A section of this.

John Heller: All right, so let's go ahead and get started here. Just as a way of reminder, PartsTech; we are a platform that makes it fast and easy for your shop to find and order the parts that you need across both parts and tires. We put all of your suppliers into one lookup, cutting out the hassle of you having to make separate phone calls.

John Heller: Cutting out the hassle of you having to log in separately into your suppliers, each and every single one of them. We make that now a very easy and simple experience to be able to find what you need in one lookup. We are absolutely free. There is no need to enter in any credit card information during the signup process.

John Heller: We just need your shop information. We'll get you a username and password, and then we'll help you get your supplier set up and integrated into a management system. If that's how you are using us and you're on your way. Simple as that. We allow you to connect unlimited number of part and tire suppliers, into parts tech, making sure that you've got the full breadth of availability when it comes to looking for parts from suppliers that you prefer to do business with. All right. So, as a recap of what brings us together today PartsTech recently conducted a survey, a very broad survey across hundreds and hundreds of repair shops.

John Heller: One of the key findings that stood out to us was this idea of parts markup. We found that a considerable amount of shops are leaving money on the table when it comes to how they're marking up parts. Gross profit margin analysis and things of that nature. So that put a bug in our minds to say, this is something we should dive into a little bit more, bring in some experts within the industry so we could facilitate a conversation and helping shops in the industry here, better understand parts markup.

John Heller: And be on the way to better profitability. Now, for those who joined us in the first webinar we didn't mention that there was some information that was available to you here. We've just got a QR code. If you wanted to scan this you would be brought to a landing page where we put together some material in collaboration with the Institute to be able to walk through a couple of these hot topics on terms, formulas.

John Heller: What are some of the foundational steps in determining this? A sample parts markup matrix, as well as the recording from our first part of this. And again, this was all done in collaboration with Cecil and the team there at the Institute. But today we get the honor. Of having Cecil join us and Cecil you made this statement here that many shops are leaving thousands and thousands of dollars per year on the table due to insufficient part market practices.

John Heller: And so we are excited again to welcome you back to this part two of our webinar and to dive into more questions, more topics around how we can help shops understand this whole idea of parts markup and very practical ways to get that in there. So without further ado, Cecil, Cecil, I'll turn it over to you and let you take it from here.

John Heller: Thank you for joining us. 

Cecil Bullard: Thank you, John. As we go, we do want questions. We like questions. It's not letting me share my screen, John. Now it is. How about that? We like questions. We want your questions. So please use the function or the Q and A to ask questions. I'm Cecil Bullard. I'm a coach and a consultant.

Cecil Bullard: I've been in the industry, my entire adult life. And I've been coaching for about a little over 20 years now, worked with thousands of shops. And so I see this over and over and over. When we first come into a shop, we look at parts margin and parts margins are usually somewhere in the 30. 2 percent to about 44 percent range when they should be in the 55 to 58 percent range.

Cecil Bullard: And that's where we get the, you know, the average shop is probably losing somewhere around 40 a year on their parts market. It's not marking parts up correctly now in a webinar, number one, which by the way, the QR code that we had on the screen earlier, we'll get you that webinar. We went through a few different things.

Cecil Bullard: One of those is the idea that parts margin is really easy to fix in the shop. You put a parts matrix in place and you stop getting emotional about pricing. This is what it costs. Think about going into a local restaurant and haggling over the price of the steak or wanting to bring your own steak into that restaurant.

Cecil Bullard: It just doesn't happen. The automotive industry is one of the few places where people can in a way haggle over whether they bring their own parts in, which is against the rules completely. We're not going to cover that here, but there's a whole series on that. And then also about what we're going to pay or what we're going to mark the parts up.

Cecil Bullard: And most customers don't understand what you're doing. They just know what the final price is. The other thing that we did talk about in number one, that you're going to want to make sure you know, is, is how to financially balance the business that I'm making the gross profit and the dollars that I need now.

Cecil Bullard: This is a QR code that will get you the workbook that goes for one and two. And so I'm going to leave this on the screen for just a minute. And then we're also going to have this on the screen at the very end. So if you don't get the, you should get the workbook because it'll help you with the formulas and, and other things that we, we have been talking about.

Cecil Bullard: So please, again, ask questions. You're going to want to get the workbook. So I'm going to take this off the screen here in 5, 4, 3, 2, 1. All right. This is a parts matrix. So all the lead up before you need to put a parts matrix into your shop. This is a particular matrix that's been developed and modified over the years to get a shop about 58 percent margin when you mark things up.

Cecil Bullard: And so when you're. Dealing with a parts matrix what you're doing is you're basically saying if I buy a part from say zero to two dollars and fifty cents, I'm going to mark it up times four, so it's a 400 percent markup. And that's the multiplier, and that's a 75 percent profit. And because of what your average part is we want the average part to fall right in the, about 60 percent range.

Cecil Bullard: And so, you know, 24 years ago when I was first started doing all of this, I was looking at the average part price that we sold in the industry. And it was at the time it was about 26 and change. So just between 26 and 27. And so this matrix has changed over the years. And the markup has changed a little bit over the years in order to maintain the right parts margin in my shop.

Cecil Bullard: So, if I buy a part that is say today, if my average price on a part is 55, then if I buy that part at, say, 55, I'm gonna mark it up types two and a half, which is a 250 percent markup and a 60 percent margin. Don't, don't confuse markup and margin. Markup is the multiplier that you use to get to the price.

Cecil Bullard: Margin is the difference between what I paid for the part and what I received for the part. So, if there are any questions about Matrix, now's a great time to ask those questions. 

John Heller: And I might just mention here, Cecil, sorry there's just some comments here in the Q& A. Please put your questions into the Q and a section and not the chat.

John Heller: I may have misspoken to lead us up. So please put your questions in the Q and a thank you. 

Cecil Bullard: Okay, and you'll notice here that there's a parts matrix for a dealer and there's a parts matrix for a jobber. And one of the questions that we get a lot is, do I have to follow the manufacturer's suggested list that the dealer charges?

Cecil Bullard: And I don't remember if we answered this question in part one, but I'm going to answer it again. And that answer is absolutely not. If you follow the manufacturer's suggested list, most of your dealers are going to give you 20 percent off of that. And so I'm going to, you know, buy that part for 80 and sell it for a hundred and I'm going to have no real margin in that it's going to be very, very small.

Cecil Bullard: And at the end of the day, I won't have any profit in my parts. And parts of profit is about 45 to 50 percent of my profits. That's helped helps me pay my bills and, and my utilities and my rent and, and myself and, and have a net profit in the shop. And so you'll notice on the dealer matrix that the dealer matrix is it starts.

Cecil Bullard: Whoa, love this mouse. It starts at a, at a, a little. Little higher, but it, it fizzles out a little faster. So, in my shop, the shops that I have run, last shop that I, I ran the, the lowest matrix part we had was a 45.9%, so a 1.85 multiplier. And I would tell you also that there are certain parts that I might not put in a matrix that I might buy.

Cecil Bullard: Things like tires. Tires don't have the same margin as other. Parts and also a lot of shops don't put batteries in a matrix. They have a different matrix for a battery So they're charging a a lower markup and a lower margin on things like batteries in order to be competitive now, I will also tell you that out of the All the shops that we work with, there are a certain percentage of shops, probably some in the neighborhood of 10 or 12 percent that basically mark up dealer parts exactly the same and even batteries the same as they would mark up a parts on the jobber matrix.

Cecil Bullard: Jobber would be a world pack, a car quest, a Napa, and of course dealership. We should know exactly what that is. Now John, I hope you're monitoring questions, and if we get some that you ask the question. So go ahead. 

John Heller: There are, and right on topic with the various parts here, we had someone raise the question around oil changes.

John Heller: So oil, air filters, cabin filters do you have any guidance on that type of job and where that fits sort of in the parts matrix? 

Cecil Bullard: I will tell you that when I was running a shop, the last shop I actually personally ran was 2009, 2010. That's when I started 100 percent coaching and I kind of got out of the running a shop business.

Cecil Bullard: I marked up my oil filters, my oil and my air filters exactly the same as any other part. I did not do anything special, but we did not sell an oil change. So this is a Kind of a different thought process. I think I, I always had a minor service in my shop and I did not have an oil change because I didn't want to compete with the oil changers.

Cecil Bullard: Right? And so if I look at the quote unquote oil change companies, I think my part is a superior part. I buy a more expensive filter that has, you know, it's better on the inside. Just get a cheap oil change and cut that filter apart and then grab one of those good filters that you would put on the customer's car and you notice that, you know, the, the filter from the cheap oil change place is not the same.

Cecil Bullard: The other thing is my technicians, I think we're better than the technicians at the cheap oil change place. And so I did not want to compete with an oil change. I had a minor service, and at the time, I know everybody's going to say this is nuts, but at the time, my minor service was 165 when oil changes were going for 29, And I know we're not there now, the local cheap oil change place here is 89 for a oil change today.

Cecil Bullard: And so, I don't necessarily want to be competitive with those people. And if I don't want to compete with those people, I don't sell an oil change, I sell servicing the car. So I don't, maybe that doesn't answer the question. I have shops that feel like they need to be priced competitive on certain items.

Cecil Bullard: And we're going to talk about that a little more as we go. And so they have a less expensive oil change, and they mark their parts up less, which is fine. And as long as you make up for it somewhere else. So at the end, I want to have a 58 percent parts margin is my goal. If I have 50, I always tell my clients, if I have 55%, I'm not going to fight with them or, you know, I'm not going to get too busy.

Cecil Bullard: If we get down to 52, I'm going to, I'm going to start talking about it. And if we drop below 52, then I'm going to have a serious conversation. When you think about like a typical shop might do 800, 000. And about half of that is parts about 400, 000. If I'm off by 10%, if I'm at 48, instead of 58, that costs me 40, 000.

Cecil Bullard: And that's the 40, 000 that we're talking about. So if you, if you work for a, a big company Walmart, big corporate Walmart store Walmart's going to sell certain items cheaper. Then you can buy them somewhere else. So they've got discounted items. And if you read the book that was written about Walmart, Sam Walton it's probably 25 or 30 years old now, but at the time, and today they knew exactly what you're going to come in and buy, if you are a customer that walks in their door, you know, why do they change oil so cheaply?

Cecil Bullard: Or why do they have cheap you know, batteries, cheap, cheap tires, because they know when you walk in the store, you're going to buy a certain number of items that that happens to be three on average. That was. Before they put grocery stores in most of the Walmart. So that number has probably changed, but they also know that you're going to buy one cheap item and two marked up items.

Cecil Bullard: And so, I don't care if you decide, look, I want to be competitive on oil changes. So my oil change is going to be inexpensive and I'm not going to have a great margin on that. But what, what gets forgotten in the automotive industry is the other side of that. And so if I'm a corporation, I know that if I don't get my margin, that my stockholders will be upset and my stock price will go down and I'll be out of business.

Cecil Bullard: That's how that works. In an automotive shop, little mom and pop shop, which is most of us are independents, et cetera. We often go, okay, I'm going to bring that down because I want to be competitive, but we don't think I need to bring everything else up by one or two points to make up for that. So, as long as your pricing is part of a a methodology or a thought out methodology so that you get the margins you need, I'm absolutely fine with that.

Cecil Bullard: And so I'll tell certain clients, I mean, I have some clients, by the way, probably again, 10 to 15 percent of my clients they mark up their parts. They don't care. They get what they need. They carry a 58 to about a 62 percent parts margin and they don't get a, their customers don't leave them and they don't hate them and they don't say, Oh, they're too expensive.

Cecil Bullard: They just, they, they believe the service is great. They believe they've got a good product. They're willing to pay for it. So 10 to 15 percent of my clients do nothing. About, I don't know, 20 to 30 percent of the clients that we get in, usually when they first start, they're very nervous about marking parts up, so they go in tears.

Cecil Bullard: They go, okay, I'm gonna do it on oil, oil pumps, and I'm gonna do it on oil pan gaskets and water pumps, but on brakes and oil changes, I'm not gonna mark up the parts the way I would. And I'm, I'm like, okay, fine. That's fine. Just if you're going to pick out 10 things that you want to be price competitive on in your marketplace, then be price competitive, keep your prices inexpensive, whatever.

Cecil Bullard: I hate to use the word cheap because that's a different connotation. Keep your prices down on those 10 items. But you have to raise the other, you know, 985 items that you sell by one or 2 percent to make up for the difference. And that's, that's what you do and that's how you manage it. So are there any other questions here before I move on?

John Heller: Yeah, I, let's, just one quick one and then I know we've, we've still got a decent amount of material to cover here. Alon, just one last question on the parts thing here. Several questions revolved around sort of the 750 mark and up, we sell and install transmissions, engines, clutches, turbos, some of the higher dollar parts in there.

John Heller: What's, what's some of the advice around that type of strategy? 

Cecil Bullard: So I work, I've worked with so many different businesses over the years and, and all it brings to mind a Subaru shop that was doing a ton of Subaru motors, probably doing four or five Subaru engines a week in this particular shop in a big area and our parts margin was terrible.

Cecil Bullard: And so I come in and I'm like, okay, we're really losing a lot of money. I mean, they were probably 28 percent because mostly what they're selling are these giant items, these big items. And so I went to the owner and I said, okay we need to increase our margins here on parts. And so we're selling all these engines and those engines are very expensive.

Cecil Bullard: So number one, what's the bottom line profit margin that you're willing to accept. Now here it's, it's 45. 46%. Now, but I used to be in some shops, we had a 35 percent was our bottom line margin when I was running a shop, you know, 15 years ago. The lowest I would mark up a part. Would be 35%. So if I'm buying an engine, I'm marketing up 35%.

Cecil Bullard: Now that's about a 1. 6 1. 62 multiplier, something like that. And so, I might buy a 1, 000 motor and sell it for 1, 600 and get myself a whatever it's 35 percent or whatever that is. It, it, you have to determine where you are. Now back to my engine shop. I went to the owner and I said, okay, can we change the price of engine?

Cecil Bullard: They were like, no way our clients will leave us. And, you know, we won't be doing motors. And, and so I was like, okay, what can we raise the price by 500? So we're currently selling an engine for, I don't know, 3, 500. Can we sell it for 4, 000? I said, no, we can't do that. I said, okay, well, what about 400? I said, no, we can't do that.

Cecil Bullard: So what about 300? Nope. What about 200? No. What about 100? Can we just raise the price of an engine job by a hundred bucks? And they said, okay. And so I, I said, okay, we're going to raise the price tomorrow by 200. And we raised the price 200 an engine. Now nobody stopped. Nobody that was going to buy a 4, 000 engine or a 3, 500.

Cecil Bullard: Motor said no, because it was 200 more. And I think in, in my experience, and it is pretty vast, I've done this forever. The buyers are the buyers and the not buyers are the not buyers. Now, depending on your marketing, maybe you brought a lot, a lot of not buyers in your shop. You've been running a lot of discount coupon marketing.

Cecil Bullard: You're attracting a certain segment of the market. That's looking for discounts and coupons. And if you're not, and you never have, then you're. You're looking for, you know, you're attracting a segment of the markets looking for relationship and quality. And so, if I want to, if I want, you know, if I'm, if I've got relationship and quality customers in my shop and the job's going to be 3, 700, if it's 39, the people that were going to say yes at 37 will not say no at 39, it really doesn't matter.

Cecil Bullard: Because they're, they're not price in every survey that's been done on what do customers want prices in the top nine or 10, but it's always nine or 10, it's never first, second, third, fourth, fifth is the highest it, it ever comes up. It's always about convenience and quality of product and, and trust and relationship before it's about price.

Cecil Bullard: So, Long, long answer is maybe I have a lot of engines and I have to say to myself, well, maybe I'm never going to have a 58 percent margin, but I am going to bring my motors up or my transmissions up by X dollars, by the way, back in the day, the transmission shops were the shops that made the highest margin because the parts on transmission rebuilds, there was huge margin in the parts.

Cecil Bullard: I know because I ran a big transmission concern for years. And, and we made better margins than any automotive service and repair shop. Things have changed over the years a bit, but those are, are good margins. And I think you have to decide, you know, Cecil's telling you 58%. Some of you are going to say, there's no way in heck.

Cecil Bullard: And some of you are going to decide, well, what if I do 52? Okay, then set it for 52 and then manage your matrix to get 52. That's your decision. What profits you make is your decision. I'm going to tell you what I think best practices are. I'm going to tell you what not only me as a coach and consultant teach in the industry, but probably out of the 40 other guys that do this that I know, probably 39 of them teach the same numbers.

Cecil Bullard: All right. So you can't just put a matrix in place. You'd think to yourself, Oh, I'll just put a matrix in place and leave it. And that'll be fine. You actually have to monitor it and you may have to adjust it. Reasons that you might adjust it is it might not fit your business. So you take my matrix, that is more for a general repair shop or a specialty shop, like, not specially like transmission or, or heavy duty engine, but more for European cars.

Cecil Bullard: When I talk specialty and you put that in place and your prices are just too high for the customers that you're attracting and you say to yourself, okay, I can't use that matrix, but what you do is you make minor adjustments to the matrix. And until you get to where you feel like, okay, this matrix is working for my shop and it's getting me the margins that I want.

Cecil Bullard: And the reason why the matrix might not work is because of the type of jobs you do. So if you're a you know, a tire store where you're doing tires I don't have tires in this matrix. I have tires in a different matrix. You know, we, we set a goal for 40 percent on tires. Most of the tire stores that I would be working with are probably in the 37, 38 percent on their tires.

Cecil Bullard: There's some other things that would, would qualify based on buying and so some of the big guys that are buying millions of tires can get their tires at a better price and, and mark them up a little less. I can't compete with those people and I'm not. My clients buy tires from me because it's convenient for them and they don't want to have to go somewhere else and, and deal with that.

Cecil Bullard: And so they're willing to pay a little more for the tires from my business. I might have that business, the tire store business where half my business is tires, and I'm gonna have a lower margin on those, but on the things that are not tires that are service and repairs, I'm gonna set a goal for 58 percent and I'm gonna track that and try to, you know, make adjustments to my matrix to get there.

Cecil Bullard: I might have a shop where I'm doing a lot of engines. We are working currently with a lot of diesel shops. And for some reason, our diesel shops have much higher average repair orders and they're doing motors and, and other things that some of our general repair shops are just not doing. And so we may make adjustments to the matrix for the type of jobs that we do so that we maximize our margins and hit the targets that we want to hit.

Cecil Bullard: A quick question there. Come up. It's come up a little bit in the chat here. The Q and a when we're saying margins. I know we covered this just briefly in the last one. But can you just sort of reset the audience on some of the terminology, you know, when you're in margin and markup and gross profit, things like that. 

Margin is the difference between what I paid for the part and what I charge for it. And you will see margin a little later in the, we're gonna go through it so you really understand it. And then one more slide or two slides down. Markup is the multiplier. So if I want to get a 50 percent margin, I have to use the 200 percent multiplier.

Cecil Bullard: So I have a dollar part. I sell it for 2. That's a 200 percent markup two times one equals two. And but it's a 50 percent margin. And, and I'll explain that exactly in a moment with a slide. Gross profit, you have, you have you have gross profit. So in an automotive business, we sell parts and labor.

Cecil Bullard: That's on another slide coming up real soon, but I pay for the part and I pay for the labor. And then what's left in the pile is my gross profit. So gross profit is what's left after you take your variable expenses. And I know some shop owners and some people are saying, well, what's a variable expense variable expenses, parts and labor?

Cecil Bullard: Because if I don't do any jobs, I don't pay for any parts or any labor, but I still have rent. I still have utilities. I still have some staffing costs, management costs, etcetera. So those in a way, don't. You know, those are later, those come after, below the line, after my gross profit. So, I have my, here's my sales, I pay for my parts, I pay for my labor, I have money left in that pile, that is my gross profit.

Cecil Bullard: And then I take out all my fixed expenses and everything called net profit after I pay all the bills. But before I pay taxes, I have what's left in that pile. And we're going to target 20%. Now we went over all of that in part one. So if you're, if you're fuzzy on that, you can view part one, and you can see all of that with all the math.

Cecil Bullard: Number three If you decide to discount some items, you've got to raise others, and we've already kind of covered that, so I'm not going to spend a ton of time here, but the more items you discount, the higher price the rest needs to be so that I make the margins that I want. It's kind of funny. We talked about three different ways of marking up parts in number one.

Cecil Bullard: One of the ways is to double every part. So we have people that say, I'll just double the parts. That'll give me 50%. I'll make all the money I want. And then I get a 4 oil filter and I'm okay to sell that for 8. But I get a 4, 000 motor. I'll never sell it for, you know, an engine that I won't sell that for 8, 000.

Cecil Bullard: I'll sell a 4, 000 engine for maybe five or maybe 4, 800, but I'll never sell it for 8, 000. And so I end up with a, I don't know, on the engine, which is now this huge part of my parts, it's, you know, 4, 800 worth of my parts sales. I end up with a 22 or 23 or 24 percent margin. And then I bring this 50 percent from this oil filter that's 4 and I still emit 23, you know, 0.

Cecil Bullard: 1. I just, how many oil filters do I have to sell at 8 that make up for one engine that I sell at 4, 800 if I paid 4, 000 for it? And, and so there's always this idea of paying attention to your numbers and, and trying to balance things out so that you're sure of, you know, where you really are in the long run.

Cecil Bullard: If you're doing it the way that I would suggest, you're probably looking at your matrix. And you're, you're looking at your margins monthly, parts margins, and you, you have a system, a matrix in place, and you have some processes around how you mark up parts so that your people know how to do it. And then you look at your parts margin at the end of the month and you say to yourself, Oh, we were great.

Cecil Bullard: We're great. I don't have to look anywhere. I don't have to go anywhere. Or you might look at your parts margin and you're trying for 58 and you're getting 38 and then you say, Okay, well, what did we do? Is the matrix broken? Are we not following the matrix? So it kind of gets us to our another slide. If we're our goal is 58, but our actual margins are 48.

Cecil Bullard: Again, the difference between what I paid for the part and what I mark, you know, what I got for it. Then I might have one of three problems. It really comes down to three things. I got a broken matrix. So I might need to adjust it based on the fact that I'm buying more dealer parts than somebody else.

Cecil Bullard: I mean, in certain shops believe that only dealer parts are the right parts and you need to put those on. I, I don't subscribe to that myself. I do, having been a tech and And rant run shops and own shops. I do know that in some cases, the dealer part is the better part and I need to use it, but it's not every part.

Cecil Bullard: Some shops actually believe that they're going to buy a much higher percentage of dealer parts. And so they need to look at their matrix and make adjustments for that, or they won't make the money that they should. The second thing is that I'm doing more of those bigger jobs. That was the question.

Cecil Bullard: You know, if I'm doing engines and transmission, see, so you're telling me to make 58%, ha, ha, ha, not going to happen. There's also a thing called gross gross profit per hour. And if I'm making enough gross profit on a job, I might look at. An engine, I'm gonna do that engine in 20 hours, and I don't know, my profit on that job is say, $3,000.

Cecil Bullard: So I'm making $150 an hour in gross profit after I pay for the parts and the labor. I have $150 an hour. You know, I made whatever that, you know, that $3,000 profit on that job. And then I do a break job, which is only a $600 job, but it costs me three in parts and labor. And so now I've, I've got a $300.

Cecil Bullard: profit for an hour's worth of work or 150 profit for an hour's worth of work. As long as I'm bringing the right gross profit. And this is not a class for that. We're just talking about parts margin here, but I do need to think about my gross profit. It's an important part of making sure that my shop is, is making money.

Cecil Bullard: And so I might run an engine shop where I'm doing a lot bigger jobs. I might have a lower parts margin overall. But when the dollars are done, I'm making the same amount of dollars at the end of the month. Right. And so either I've got a plan to make dollars gross profit dollars and, and therefore net profit dollars cover my expenses and leave me money in the pile.

Cecil Bullard: Or I have a plan to make sure I'm marking my parts up correctly and getting that margin because when that's all done, then I still make 20 percent net. That's the plan. Right. 

John Heller: And you, you alluded to this a little bit in your response a minute or so ago here. One, one individual asked the question, why should we run a lower margin on dealer parts where we source the part shouldn't affect my needed margin?

Cecil Bullard: And you remember, I told you that, that like 15 percent of my clients, that that's their attitude and they just mark up parts. It's kind of funny. And there's a, a very big metro area. And if I mentioned the area, you probably would know the guys I'm talking about, but there's two pretty big players up there, maybe three.

Cecil Bullard: And they happen to be clients. One of them is a big European area. He's got multiple shops. And every time that I talked to him, I'm like, your parts margin sucks, right? It's at, at 48%. And he explains to me that where he's at in his community, you can't make 58%. You have to shoot for 52. And if you shoot for 52, you end up with 48.

Cecil Bullard: So he goes, I'm happy with that Cecil. And I'm like, okay, great. That's what you've chosen. Yeah. I'm far be it for me to argue with you too much. I have another client up there that actually runs two shops. He does he'll make 2 million net out of these two shops. One of the vish shops we'll do, I don't know, six or 8 million this year.

Cecil Bullard: And then the other shop does 3 million and he'll make 2 million in profit. He does all the time, and his parts margins are like 60%. And by the way, these two businesses are within 15 miles of each other, and they're literally kind of competitors. Well, I've got one guy that tells me, well, you can't make money on parts in this area.

Cecil Bullard: I've got another guy that tells me, I just mark them up. And the customers pay for it or they don't. I've got a guy in the San Francisco area. He's a mobile mechanic and he gets 64 to 67 percent margin on his parts. He figures I'm mobile. I'm coming to them there. They better, they need to pay for it. And that's how I mark it up.

Cecil Bullard: And by the way, his clients pay it. I always say when I'm, when I'm teaching, I'm going to write this book and the book's going to be titled Cecil, You Don't Understand. Because I have people telling me all the time, well, you don't understand where I'm at, or you don't understand the business I'm in, or you know, you don't understand.

Cecil Bullard: And so you, you know, if you're in San Francisco, you can't make parts margin because people are, you know, this, or if you're in Utah, you can't make parts margin because people are this. And I got to tell you, that's all hokey. That's all hokey. It's whatever's in your head, biggest problem you have is here in your brain.

Cecil Bullard: If you believe you can make parts, margin, you mark them up. The majority of clients are going to pay it. You're going to lose a couple, but the majority will pay it and they'll be happy to pay it because you're, they're not there because you're the cheapest guy in town. They're there because they believe that you're giving them a service that they.

Cecil Bullard: that they, there's value in it. Okay. Someone's not following your matrix. This is the problem we find most of the time. Someone, usually the owner, is feeling for the customer and saying, ah man, this is awfully expensive. I'm gonna, Lower this part by a hundred bucks because it's not real dollars. It's not like you're taking money out of your pocket, right?

Cecil Bullard: It's on paper right now. It doesn't mean anything. It's not real dollars. And what I tell owners and service advisors is go to the bank, get yourself some brand new 20 bills. And when you decide to lower the price on a part, because you feel bad for the customer, Just take some of those 20 bills out and hand them over the counter and have the customer pay you with those.

Cecil Bullard: Because every time you discount the part or anything else, frankly, you're actually giving away dollars that you should make. And, and I think we are very emotional in this business. We really feel for our clients, which is wonderful, but I will tell you that I didn't build the car. I didn't buy it. I didn't drive it.

Cecil Bullard: I didn't break it. I shouldn't have to supplement the customer's repairs. When I go to the grocery store, They don't look at me and say, Oh, that's Cecil. He's been living here for 25 years. He's had raised four kids and 14 of their friends over the years. And he's bought, you know, millions of dollars worth of groceries.

Cecil Bullard: And so we're just going to lower his prices because he's a good guy and we don't want him to feel bad when he checks out and pays for those milk and eggs. They don't do that. When I go the. To the nice restaurant over here, which I'm in quite a bit, get myself a steak. They don't say, Oh, that's Cecil.

Cecil Bullard: We know him really well. You know, normally our steak would be, you know, 55, but we're going to lower it down to 35 because Cecil's a nice guy. And we feel for him. They don't do that. We only do that pretty much in the automotive industry. So, if I'm managing the business, number one, I'm going to have a matrix in place if I'm managing the business, I'm going to look at where my margins are and I'm going to make adjustments to my matrix based on.

Cecil Bullard: The type of parts I'm buying, type of jobs I'm doing, where I'm getting those parts, so that I get the margin I need to. And if I'm managing the business, and we have a matrix in place, and that matrix is adjusted, and we're not getting our margin, I'm going to start looking for heads to cut off. And no knives are used and no people are hurt.

Cecil Bullard: But I'm going to find out who's discounting. And I'm going to go find out if they want to actually pay for that themselves. Because when they're discounting, they're actually taking money out of my pocket, their pockets, and believe it or not, my customer's pocket. Because if I have no profit, I can't take care of a customer that has a problem.

Cecil Bullard: So that's, anyway, that's it. I, I, I, I am going to come out of this really quickly. I'm not going to spend a lot of time here. The matrix that you will get the, the, from PartsTech from the QR code is a lot like this. You can put the price in here. We have a 34. 95 part. That's what we paid for it.

Cecil Bullard: And based on the matrix, we're going to charge 96. 11 for it. We could put in a 14, 000 part. Let's see 0. 00. So it cost me 14, 000. I'm gonna sell for 2, 800 in this matrix. It 1, 400. Eh, it ain't working right. That should be Lower. I have to look and see what, why that isn't doing what it's supposed to.

Cecil Bullard: Let's see if we can put it down here and make it work. 1, 400 2, 590 is what I'm going to sell that for. Ignore that particular one, the lower thing isn't working. I know it is on your calculator. I, I patched this together for the last minute so I could show it. I'm going to buy a, I don't know, a 12 part in 30 cents from my local job.

Cecil Bullard: I'm going to sell that for 33. 83. I'm gonna buy a 22 part from my dealership and I'm gonna sell it for 49. 50. Depends on which matrix, but the matrix that you guys have all works properly. I know that. We've looked through it. And if you have that little tool, you can just put the prices in and it'll tell you what.

Cecil Bullard: Also, almost every point of sale that I know of, I always say almost because I don't know of all the point of sales. But everyone that I know of has a matrix built in that I can manage. It might even have multiple matrices that I can put in for different vehicle types or different types of jobs or where I got parts.

Cecil Bullard: And it will do the calculations in and of itself. Any questions here, John? 

John Heller: I think we have some that we'll get to at the end here. I'd like for you to keep on going. 

Cecil Bullard: All right. So I have to understand how I make profit in an automotive business. I only have two things to sell.

Cecil Bullard: I sell, I buy parts from someone and I resell them. I mark them up. I buy labor from someone and I resell it to my customers. That's how I make money in the automotive business. So, if I don't mark up my parts correctly, that's about half of my business, maybe 45%, then I might lose 10%. And if I lose 10%, I might lose 40 to 70, 000.

Cecil Bullard: Labor's difficult to fix. That's a whole nother webinar. Parts is easy because it's just follow the matrix or don't follow the matrix, adjust the matrix so that it gets you where you want to be. Labor's a lot harder because we're dealing with productivity and, and other issues and costs. That's another hour long webinar.

John Heller: Well, maybe, yeah. And let's we won't dive into the details of that, but along the lines of labor, we had a really interesting question here asking, what do you think about charging the customer cost on parts? Like if they walked into an auto part and then just raise the labor that way you don't have to pay more money on tax because the parts are high and taxable.

Cecil Bullard: I think number one, the sales tax board, at least serving California is going to come down on your Fannie and you're going to end up paying some extra taxes because they know what you should be marking parts up because they know what the average shop marks parts up. And so you, you, you do put yourself at risk of a sales tax audit and trouble.

Cecil Bullard: I'm not saying that's actually going to happen necessarily, but it could. Number two, I think it's kind of chicken. Mark up your, your parts like you mark up your labor. You should be making profit on parts as well as labor. I hate to see our industry go that way. There is a contingent that's basically saying let's just sell parts for what we bought them for, for what the normal list is, and then let's mark up our labor.

Cecil Bullard: I guess in the long run, as a consultant, I don't care. As long as you make the right net profit and the right gross profit, it doesn't really matter. And I think that in some states where you have to define parts and labor maybe you're more apt to do that. In other states, you don't have to, you just have to say this is what the job costs.

Cecil Bullard: It always makes me Me laugh. I was working with a client today and I said, you need to raise your labor rate by 20 bucks. He said, I can't do that. Cecil and I said, well, what if we put a labor matrix in place and we just add 20 percent of the labor time. He was all over that. Oh, yeah, I can do that.

Cecil Bullard: And the funny thing is, is that. Basically, I'm doing exactly the same thing. It's, it, it, it, it's funny to me where emotionally sometimes we're tied up in other places where not I don't know if I answered that question. Basically, I'm not going to do it. I'm not going to recommend it to my clients or the industry because I, I just don't like it.

Cecil Bullard: I can't tell you anything other than that. As long as you make the profit that you need to gross profit per hour and gross, you know, margin, net margin, gross profit margin, net margin, you're fine. How do I calculate margins? Margin is calculated by taking the difference between what I paid for the price and what I, part, and what I sold it for, and then dividing it by what I sold it for.

Cecil Bullard: If I bought a part for 3. 50 and I sold it for 11. 50, I made an 8 profit, so my profit, 8 divided by 11. 5 is 70%. That's a 70 percent margin on that part, okay? So there's the math for you the math behind the, the thing. Now labor we're also gonna, I'm just gonna do a labor one. If I bought the labor for 42.

Cecil Bullard: 50. So that would be maybe paying a tech, you know, 40 an hour. And then I got a 12 and 50 percent load parts FICA, feudal workers, comp P PTO, et cetera. And I sold it for one Oh five. I made a profit of 61, actually, geez, that's supposed to be 61 50. I've changed that in five different slides which is about a 59 percent margin.

Cecil Bullard: So if I'm supposed to make 64 percent on my labor. I'm supposed to make 58 percent on my parts. I did really well on my part here, but I didn't do really well on my labor. I did, I didn't get there. Okay I'm gonna die over this slide being wrong. Last slide of all and we'll ask, we'll answer questions.

Cecil Bullard: I have a sales volume, a shop where I have a sales volume of 65, 000 a month. I have a 60 percent gross profit that gives me 39, 000 in gross profit dollars to pay my bills. So I have a 500 average repair order. That means I need 130 cars. So assuming that I lower my margin because I'm not paying attention or I'm not using a matrix or I'm getting emotional by down to 50 percent on that same 65, 000.

Cecil Bullard: Now I'm, I've got 32, 500. I'm 600, 6, 500 short to pay my bills and leave money. And if I have a 500 average repair order. It means that I need 156 cars to do the same to do the same business. And so I need 26 more cars. And the more cars you bring into your business everybody thinks it's all about car count.

Cecil Bullard: It's not about car count, it's about margin. It's about making profit. If I lose 5 on every car that comes in, how many more cars do I want to work on today? I don't want to work on any. If I'm losing money and, and the whole point is here that there's a whole contingent out there saying, lower your price, lower your price, get more business in.

Cecil Bullard: Well, you can do that. You can lower your margins and get more business in your shop. You can lower your margins by, I don't know, 15%. And you'll have 10, almost 10, 000 less, and you'll need 43 more cars to get the same money in your bank. And then, here's the other, here's the other part of that, it's literally talking about your fixed expenses.

Cecil Bullard: Let's, let's look at the 32, 000. Let's say I have a 32, 000 worth of fixed expenses. That's me, the, the owner, I get paid for being a manager, etc. That's my rent, my utilities, my truck. My gas, my electric, you know, my insurances, my banking costs, all of that stuff costs me 32, 000 in a month. And I have a 60 percent net profit.

Cecil Bullard: Then I'm going to make a gross profit of 53. You know, 5, 300 and 53, 000. Ha ha, Cecil, get tangled up here. 53, 333. That's my I need to sell 53, 333 to pay that 32, 000. And if I have a 500 average imperative, it means I need 106. 7 cars in my shop, and that would be to break even. That would be not making a net profit, it's just paying the bills.

Cecil Bullard: Now 15 points. And so I'm losing 10 on my my parts. I'm losing five on my labor, which we see this all the time. I still have 32, 000 in expenses. Now I have to do 71, 000 in business. Now, by the way, because my margins are lower, it's actually going to lower my average repair order. So now I'm going to, instead of having a 500 average repair order, I'm going to have a 425 average repair order, 15 percent less.

Cecil Bullard: And it means I'm going to need 167 cars, or an extra 60. 7 cars, in order to make the same, to break even, be zero. And so you, you gotta be really careful about margin because the more your margin slips, the more business I have to do to pay the bills, the more cars I have to bring in the business and it's, it's risky.

Cecil Bullard: Okay. All right, now we're ready for questions. And we'll leave this up while we ask questions, and then we'll go I'll turn it back over to you sir. 

John Heller: Yeah, absolutely. Thank you, Cecil. Man, yeah, just some great questions. That's a great way to wrap it up. I, I love the, the diving in there and actually looking at what gross profit does to the business.

John Heller: Very valuable information. There Cecil. Thank you. A couple of things around mobile mechanics. You alluded to it a little bit in your illustration about someone in California doing that as well. This one says I'm a solo owner operator of mobile mechanic called shops around in the area. They said they're all at 30%.

Cecil Bullard: On their margins? 

John Heller: Yes, on their markup. 

Cecil Bullard: Where are you? In the southeast somewhere? In Mississippi, Missouri, Arkansas? I'm sorry, I've been dealing with shops for 42 years, going on 43 now. And we don't, we have shops that are at 30 when they start. We don't have any shops at 30 when they, they end working with us.

Cecil Bullard: And by the way, if you, if you are mobile, and you're going to the customer's home, And you're charging cheap to get that job. Shouldn't you be charging more because you're actually creating convenience for them and going to their home instead of charging less? The, we, we work with several mobile mechanics as well as, as you know, brick and mortar shops several hundred of them actually.

Cecil Bullard: And Most of our guys are probably, if we average margin between all of our people new coming on and our people have been with us for a long time, we're probably averaging somewhere around 52 percent parts margin amongst all the shops that we work with. Think about a 22 percent difference in your parts margin.

Cecil Bullard: And if you're gonna sell, I don't know, 100, 000 worth of parts, that's 22, 000. That's, that's a lot of money. Sorry, John, I interrupted you. Go ahead. 

John Heller: No, that's great. And along the lines of mobile here this individual says I do flat pricing for things like oil changes and brakes. Do you think this is a mistake?

Cecil Bullard: Yes, absolutely. Are you kidding me? Flat pricing. So I'm going to do the same brake job on a Corvette as I'm going to do on a Camry or a Honda. Or a I don't know, a Jag, a Jaguar a Jaguar. You know, I'm going to have the same price. There's no way in heck I'm doing that based on my costs is, is what you're going to pay.

Cecil Bullard: It's never going to be, I just set the price. I mean, it's just. Are we, are we going to the lowest common denominator? Are we building a business that's going to be successful financially and an industry that's going to be sought at and looked at like professionals and be profitable? Yes, that's a big mistake.

Cecil Bullard: Don't do it. 

John Heller: Right. Here's, here's another one for you. If I sell a job that includes parts, such as a job for 300, part cost is 40. How do you back calculate for the part? 

Cecil Bullard: Well, I'm going to take. I take that 40 part and I put it in the matrix and it charges whatever it's going to charge. Which by the way, if you're running your business correctly and you're estimating correctly, you have about 55 percent of your sales is going to be labor and about 45 percent is going to be parts.

Cecil Bullard: Parts margin should have a 58 percent margin. Maybe you don't stick to see, you're not as tough as I am and you're going to be 52. Labor should be, if it's loaded, we want to see a 64 percent labor margin or a little higher. Unloaded labor, we want to see 74 to 80 percent margin on, and the load is the FICA Feudal Workers Comp, whether you look at it either way.

Cecil Bullard: I would back into that and say that 55 percent of that 300 which is 165, is going to be labor. And so my part with is going to be the difference, which is 135. That 40 part is going to go out for 134. 95. That's going to be you know, a $300 job all in. And by the way, I bet you that's about 60, 60 to about 60 percent margin on that part.

John Heller: All right. Here's one. How would you matrix parts for commercial customers? Any different? 

Cecil Bullard: It depends on what part of my business is commercial and what my commercial customers are looking for. If my commercial customers are looking for price We, we work with several different commercial fleet type customers.

Cecil Bullard: One guy does 200, 000 aluminum tank repairs. Another guy is taking care of the. You know, the air conditioning guys, fleet of cars and of trucks. And so when I'm selling the, the customer, I'm going to sell them on the idea that for every hour, their truck is not on the road. It's costing them four to 400 to a thousand dollars.

Cecil Bullard: Depends on what you're doing. If you're. If you're taking, you know, hazardous chemicals around the United States or Canada, then it's going to be a higher cost if you're just, your air conditioning guy's not out fixing air conditioning units because the truck won't get him there. Probably costing you around 400, 450 an hour.

Cecil Bullard: And so I'm not selling a cheap price, I'm selling, get it in, get it out fast, get it back on the road, make money. And so, the way I handle, Pricing for those guys as I talk about the value of what I do, like I would for any client and I make some agreement with them. Maybe you've told them you'll only mark up parts 20 percent or 30 percent and so now I have to start playing games with labor and try to make that extra money up in labor or maybe I reach out to my guy and say, look, we need to make 40 or 45 and they decide, hey, I don't want to work with them or I will.

Cecil Bullard: I hate the fact that we would go, look, it's 30 percent to you because you're a fleet and you're going to bring me all this business. So now the bulk of your business is people paying a lower margin. So how many more cars do I have to work on? And I don't know if that answers that question. It's not my business is never going to be about price It's always going to be about what we can do for you How quick we can get that vehicle back on the road and and the quality of the product that we offer And so i'm always going to charge a little more than probably somebody else will yeah You get to decide what you want to do.

John Heller: Absolutely. All right I think we got time for just one or maybe two more here. Cecil and I I know we've got a lot of great questions in there, and unfortunately, we won't be able to get to all of them. Just, I know you touched on it briefly, I just want to reiterate, there's several questions in here about tires.

John Heller: And I think you mentioned tires is somewhere in the 40 percent you would recommend? 

Cecil Bullard: We shoot, we shoot for 40 in tire stores. It's funny I've worked with all the different major tire chains or guys that had shops for different tire chains, and I went into one. We were about 24%. I told them we were gonna get 40%.

Cecil Bullard: They thought I was nuts. Nine months later, we were 38%. There are different things you can do to increase your. tire margins. Not enough time to actually do that here, but I'm shooting for 40 percent on tires, especially in an independent shop. That is not a tire store. My customer is gonna pay a little more for the tires, but it's about the convenience, not the cheap tires.

Cecil Bullard: They can buy cheap tires anywhere. But their cars in my shop today, they for the convenience, they're going to pay a little more from us and, and shopping tires and how you sell tires. It's a different game than selling water pumps or brake jobs. It's a completely different sales process. 

John Heller: And one last question here, and maybe I'll ask you to, to stop sharing so I can throw it one closing slide up here.

John Heller: See, so in closing we talk a lot about emotion here and you know, we just got another couple of questions in here today around what what do I do when people are out price shopping my parts on Amazon and they bring in, I found this part on Amazon for X, Y, Z, how do we, how do we handle this emotional tag that all of a sudden parts are a commodity and that people expect the lowest price anywhere on parts?

Cecil Bullard: So, think about going to your local restaurant and bringing your eggs, your bacon, your, your steak into the restaurant and saying, would you cook this for me? I guarantee you if you try it. Take a steak or take a bag with with a steak and a potato in and ask the restaurant to cook that for you and see what happens.

Cecil Bullard: Okay. So what, what's going to happen in our industry, like every other industry is people are going to do what we allow them to do. Now, there's three reasons not. To let someone bring their own parts in your shop. Actually more than that. So one is you make me crazy. You're the person that complains the most.

Cecil Bullard: You bring me the cheapest parts that don't fit. And then when your car is here for three weeks, because you had to go back to Amazon and try to get the right part. It's sat here in my way. And now you're mad at me because your car's not fixed because you didn't supply the part. In most States.

Cecil Bullard: Your warranty on parts, no matter what you write on the work order, you have the customer sign is exactly the same as any warranty on any part that you would give to any customer that comes in your shop and you supply the parts. So whether you like it or not, if you're giving a three year 36, 000 mile warranty to your regular customers who let you supply the parts and make your margin, you're giving the same warranty to the person that brings their own parts to your shop.

Cecil Bullard: Because when you go to court, And that judge says, why did you do this or why didn't you, you know, they think you're the professional and you will lose that court case, plain and simple. That's just how it is. Number one. Number two, if the insurance company that does your liability insurance finds out that you are letting people supply their own parts and creating that liability, not knowing the quality, the provenance of the part they can and might cancel you or raise your rights.

Cecil Bullard: Okay, because you're creating additional liability for them because you do not know where that part came from. You do not know what's in that part or how it's going to work or anything. Now, number three, I have to make a certain margin or I go out of business. I cannot let you bring your own steak into my restaurant and cook it for you because then I don't make the money I need.

Cecil Bullard: And I still have to pay for the lights and the overhead and everything else and make a profit. So the answer would be no, I don't allow it. Think about this. What if every shop was like every restaurant and we just said, no, I won't take those parts. Yes, I know you can buy them cheaper, but I don't know the, I don't know the quality.

Cecil Bullard: I don't know the provenance. I don't know if they're a counterfeit part. I don't know if they're quality part. If the part doesn't fit now, the things your bay, your area is going to be tied up for weeks at a time while the customer goes and gets another part. Now, you think this is a new thing. Parts pricing and parts.

Cecil Bullard: We've been fighting this same battle for 42 years. Long, as long as I've been in the industry, people have been coming in my shop with, I can buy that alternator cheaper at, at Pep Boys, AutoZone. I can buy that alternator cheaper at Napa. You know what the answer to that is? Absolutely. Yes, you can.

Cecil Bullard: But it does not come with a warranty. It does not come with a guarantee that it's fixing your problem. It does not come with my customer service. So think about that steak. I can buy it cheaper at the local grocery store. You bet you can. But it doesn't come cooked perfectly on your plate with a guarantee that it won't be tough and that you'll enjoy it.

Cecil Bullard: And it doesn't come with someone that cleans up the dishes. Okay? We have to stop. Playing the games that the cheap people in the world want us to play so they can save a few nickels. We have to start being business people in our industry. If we want to be treated like professionals, we have to act like professionals.

Cecil Bullard: One more comment here. Big, it's a big area. The guy that brings his own alternator, his own water pump, and you write on the ticket, hey, no warranty, 30 days later when that thing goes bad, you want to know who he's going to blame? Not the company that made the part. He's going to blame you because you're the one that put it on the, on the vehicle, and he's gonna, he's gonna be the one that's in your face, demanding that you put another one on and not the guy that says, Oh, I bought the part, so it's my fault because I didn't buy a good part.

Cecil Bullard: I know I've experienced it many, many times over the years. We have to stop letting people bring their own parts into our shops. 

John Heller: Excellent. Well, thank you, Cecil. Again fantastic information here. I hope everyone on the call here, this webinar, found it extremely helpful and useful. Closing here, up on your screen, you'll see QR codes to learn a bit more about the Institute and the services they provide.

John Heller: Also, you'll see QR code there for signing up for a parts tech demo. And I'd encourage anyone who's curious about how parts tech is helping shops understand and monitor gross profit as they're looking for parts and building ROs we'd be happy to show you how parts tech is solving those problems for you.

John Heller: So again, thank you all for joining today. We will send this recording out to everyone here on the call and those that may have missed it as well. Cecil, again, thank you very much for coming on and imparting your wisdom. Everyone have a great day. We'll talk to you soon. Thank you.