Making money on paint and materials

March 25, 2015
Increasing the profit on paint and materials can be as easy as focusing on the details in the repair plan that is generated on each vehicle.

How much profit are you making on paint and materials? Just like many things that we do daily in the collision industry, increasing the profit on paint and materials can be as easy as focusing on the details in the repair plan that is generated on each vehicle.

As you read this article, you may think you are going to be told, “You’re the only one in North America that charges for that. We are not going to pay for that.” You will likely encounter situations like this. So as you go into creating a more detailed repair plan, know that your unsupported opinion doesn’t matter to the insurance company. Be prepared to share all documentation that you can generate to support your position.

Listed below are several areas that you should consider in your repair plan to capture additional refinishing hours and paint and material sales.

Considerations for profit
These are several areas for you to think about if you are not making as much profit on paint and materials as you should be.

1.     Look at your standard operating procedures. Do you have a paint problem or a body repair problem? For example, is the bodywork being prepared to the proper grit, or are your painters required to use a larger quantity of primer to cover for this?

2.     Look at your inventory controls. Are materials going home, being used on personal vehicles, or lying partially used around the shop?

3.     Look for materials being used and not properly reflected on the estimate or not charged for at all.

4.     Look for other wastes. Are your painters mixing more material than they need for each repair? Are you using more basecoat, clearcoat, primer or sealers than you should be?

5.     Look at the grade of materials you are using. You may believe that you are saving money by not using premium grade sandpaper, but you may be using twice as much material to compensate.

6.     Look at your accounting practices. Are your materials being properly reflected on your profit or loss statement?

7.     Look for additional paint labor hours on each estimate. If you calculate materials costs based on refinish hours multiplied by an hourly rate, increasing the number of paint hours on each repair will increase your material reimbursement.

8.     Look at blending versus panel refinish. Do you make more money by blending into an adjacent panel or by panel refinishing?

9.     Look at the job costing that is available through your paint mixing system software. Are you being reimbursed for what you are using?

10.  Consider using a paint and material invoicing program.

Estimate audits
Listed below are several areas that I encounter when performing estimate audits that are often overlooked on the repair plans. While not all apply to each repair, these are areas that your repair planners should be considering.

Adjacent panel weld damage: If a welded-on part is being replaced, then the repair plan needs to include the repair and refinish of weld damage done to the adjacent parts. For example, if you are replacing a core support, include repair and refinish time to the upper rails, aprons and lower rails. Remember paint times need to include inner and outer surfaces! Your staff is doing this work; you just may not be getting paid to do it.

Raw bumper preparation: With the number of unprimed bumpers increasing, it is critical that shops are capturing the additional labor and materials for preparing these parts for refinishing.

Mask interior openings: During many repairs it may be necessary to provide additional masking for interior door openings, windshield and back glass openings, trunk or cargo areas.

Denib: This is an operation that is both performed at the factory during vehicle assembly and also required in a collision repair shop to remove small surface imperfections.

Seam sealers: During many repairs the original seam sealers are removed or damaged. Make sure to include the additional costs of replacing these seam sealers. Remember that to match the appearance and function of the original seam sealer, some repairs will require that more than one type be applied. Adding a line item for $15.00 won’t cover the costs of applying most seam sealers!

Paint additives: When refinishing plastic parts it may be necessary to use additional additives such as flex additives or adhesion promoters. If these materials are not included by the estimating system, make sure to itemize them on your repair plan.

Feather prime and block: While this has been debated for years, it continues to be an industry issue. There is a tremendous amount of information on this subject that all indicates that it is a not-included operation. Consider this operation on every repair where a repair has been performed.

Additional Sources Available to You
If you need additional help on capturing refinish labor hours and reimbursement for materials, consider these sources.

The Database Enhancement Gateway (www.degweb.org)

SCRS Guide to Complete Repair Planning

www.estimatescrubber.com

You can also download the estimating guides for the major estimating systems from the DEG website. These will give you a listing of the included and not-included operations for each system.

Free Guide: How to Use Supporting Documentation
I would encourage you to develop sets of supporting documentation for items where you encounter resistance. Use the documentation to support your position and as a tool to share your education and knowledge with the person that has a different viewpoint. We have attached a sample of a documentation set for preparing unprimed bumper covers for refinishing that may help you get started. Try it free for a limited time by going to www.ationlinetraining.com/abrn1504.

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