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What kind of profit is there in fluid services?

Thursday, October 31, 2019 - 06:00
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The industry is aware that the fluid service is a very important part of the vehicle today; however, I am still amazed how under equipped shops are to properly service the various fluid categories on a vehicle.

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Consider the basic fluid services required today for proper and professional vehicle service, namely, system flush, carbon clean, oil flush and a transmission flush to start. All require specific equipment to perform the service professionally and all should be in the bays of a modern shop today.

What goes missing in the conversation is the profitability contribution each service can make to the shop.

Let’s examine a transmission flush as an example. Fill in your own numbers. Mine are low on purpose as I’m just using an example to show you the format but when you fill in yours you will be amazed at the profit potential:

Service Shop Cost Service Shop Retail Gross Profit
Filter & Gasket $19.12 Filter & Gasket $38.24 $19.12
Trans. Fluid 12 Quarts $26.72 Transmission Fluid $53.44 $26.72
Labor (1.7 x $28 wages) $47.60 Transmission Service $99.99 $52.39
Totals $93.44   $191.67 $98.23 (51%)

Purchase price of the equipment is approximately $5,000

Lease cost of equipment estimated $170 per month X 12 months = $2,040.00 or 1.7 flushes per month ($170 divided by $98.23GP)

Recommended transmission flush every 50,000 miles

Based on 600 clients averaging 11,000 miles / year

(600 X 11,000 miles. )/50,000 = 132 flushes X 98.23 = $12,966.36

                                    Less: Annual Lease cost                -      2,040.00

                                      Additional NET Income                 $10,926.36

Now keep in mind, while the machine is performing the service, the technician is also performing other work on the vehicle so in reality, the total gross profit for the hour rises dramatically and the “efficiency” of the technician also dramatically improves.

Do the same format analysis on each of the other fluid services and I think you will find the potential for Net Income with them all combined is over $100,000 per year based on a client base of 600.

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