Garage door industry magazine for garage door dealers, garage door manufacturers, garage door distributors, garage door installers, loading docks, garage door operators and openers, gates, and tools for the door industry.
Issue link: https://idoi.epubxp.com/i/177021
SaleS&MarkEting; (continued from page 38) a price list for your employees to use, so that they are all on the same page, is essential. For instance, carriage style doors and belt drive GDO's will more likely warrant a better gross margin than pan type garage doors and chain drive GDO's. The margin for each product should refect its perceived value in the marketplace. Use that as your guide when establishing your price points rather than hearsay about your competitors' price. consistency. As with your other products, maintaining a published parts price list for your employees is extremely important. With all of the electronic gadgets we have at our disposal now, the list can be maintained in real time. One tap, one swipe and presto! You are looking at the latest parts price list. Like new doors and openers, parts segments gross margins will vary depending on the cost and usage. You should clearly defne the margin by category and stick to your guns. Of course offering volume discounts is an option but as a rule parts and service should be sold at the retail price point. Another thing to remember that will help you justify raising your parts prices is the carrying cost of maintaining a parts inventory. Parts sitting on a shelf cost you every day they sit there. You had to pay to get them there, unload them, store them, reload them and get them to the jobsite. If you fnance your working capital you probably are paying bank interest. So factor these things into your equation when determining your parts pricing. Charge for Equipment Service, parts and maintenance It is no secret that the service area of our industry (and many others) is where the best proft margin is found. It is also the most expensive to support as it is so labor intensive. The good news is that it is by far the easiest of all product segments in which to raise prices. Do you charge for the use of your equipment when providing repair service? If yes, good for you. If no, why not? Here's an easy way to make this connection. If your customer was repairing their own 20 X 14 rolling steel door and had to remove the barrel, chances are they would have to rent a forklift to do this. They would also have to pay for the labor for to get the job done. So why not pay you accordingly? Examples of equipment charges are scissor lifts, forklifts, welding service, cutting torch use, and scaffolding just to name a few. Charges can be confgured by the hour or by the day and will vary depending on the cost of the equipment. While you may already own this equipment the cost of ownership continues with depreciation and maintenance. Charging a fee for its use will help defray these ongoing costs while at the same time boosting your service sales profts. Continued on page 42 Let's start with your service rates. The cost associated with labor is one of the largest on your balance sheet. If you have top notch techs, that get the job done right the frst time, you have to reward them accordingly. Your service rates are no different. Most customers will understand that paying you more per hour to perform service correctly and effciently is more cost effective than purchasing from your competition that may offer a cheaper rate but takes multiple trips to complete the job. By paying you more up front they actually save money. So don't apologize, if you have the best service, charge for it. Your techs and other employees deserve it. Parts sales are another often overlooked proft center. With the click of a button on a computer program you can raise prices on your parts inventory instantly. Your suppliers have no compunction about raising your cost prices so passing this along is what you must do in order to preserve and improve your proft margins. The key to this again is V o l u m e 4 6 I s s u e 5 2 0 1 3 41