Don't Be Another Face in the Crowd: Increasing Profits Denver CO

By Charlie Barone
4/1/2002

"How can I make a higher profit margin in the body shop as the insurance companies are paying less and less?"

- John Thompson, shop manager,
Fix Auto Mall, Auburn, N.Y.

There are only two ways to increase gross profit on a given sales volume. The first is to increase your bottom line, i.e. charge more. The difficulty in accomplishing this is well known in a market that some would say is dominated by third-party payers. This only leaves a reduction in the cost of sales as a means of generating greater profits.

Conventional wisdom will tell you that it's necessary to cozy up to insurers as a way of filling your shop with late-model wrecks. Industry pundits whose words and advice fill the pages of this very magazine will tell you that in order to do business with insurance companies, you have to do and be certain things. This usually means limiting prices, making concessions and offering discounts in exchange for a promise of increased volume. If this is the route you choose, the opportunities to increase profits by way of increased prices are limited (practically non-existent actually).

Regardless of the route you've chosen, when you're working with a finite number of dollars - which probably isn't destined to change much considering of all the new efficiencies in the market and tough competitors - you have to constantly weed your garden. Weeds grow in areas of your business that go uncultivated. Examine your business from diffe...