Service sales potential also should be considered when setting retail prices. Offering low prices for parts used in service repairs can entice customers into your bays. And once there, those margins can be recovered through labor rates.
Bill Wade with Wade & Partners advises distributors to include categories for service in a pricing matrix that can easily be quoted to a customer on the fence about a repair. And, similar to retail parts sales, volume matters. A fleet customer requiring service on 50 trucks can be quoted a different rate than an owner-operator.
“The idea is to drive as much service work into your bays as possible because there’s nothing like the margin on service,” Wade says.
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