Brake Sales Mathematics

Brake Sales Mathematics

The problem for most service dealers is that equipment, training and information costs are rising by the day. For this reason, routine brake service is a high-income producer for most dealer shops because it requires the least equipment, training and information resources to perform.

In today’s highly competitive undercar markets, the mathematics of providing good value with an acceptable profit margin on routine brake service has left many of your independent dealer accounts struggling.
The problem for most service dealers is that equipment, training and information costs are rising by the day. For this reason, routine brake service is a high-income producer for most dealer shops because it requires the least equipment, training and information resources to perform.

The Basic Labor Charge
It might surprise you, but replacing the whole disk brake assembly takes only slightly more time than just replacing pads. To illustrate, the brake caliper usually must be removed before the brake pads can be replaced. After the caliper is removed, the brake technician checks for worn brake rotors, calipers and brake hydraulic hoses. While the pads and rotors can be replaced in an hour on many vehicles, an extra 30 minutes to an hour is required for bleeding the brake system when a hose or caliper is replaced. Even at that, the major variable in the brake repair is in the cost of the additional parts.

Pad Math Numbers
To keep it simple, we’ll confine our discussion of pad math numbers to the generic single-piston, floating caliper design. At the professional level, the most important part of brake repair is preventing comeback complaints like brake noise, vibration, pedal response, and wheel dusting. The simplest brake repair is the “pad slap,” which consists of removing and replacing the caliper to replace the brake pads. Remember that, at the professional level, the premium pad will vastly reduce the number of noise, pedal response, and dusting complaints. Mathematically, let’s say that a typical economy pad replacement with labor retails at $120. The premium pad with labor retails at $190. The customer pays $70 more for better performance and your dealer makes an additional $30 profit, not to mention dealing with far fewer brake comeback complaints.

Brake Rotor Math
Brake math is pretty simple on hat-type rotors because, in many cases, the labor times for measuring, cleaning and resurfacing the rotors is very close to their replacement cost. In addition, the new rotor will last much longer and produce fewer comebacks than a resurfaced rotor. So, as an add-on sale, it’s more cost-effective for your dealer to replace, rather than resurface, hat-type rotors. Mathematically, the customer might pay $95 retail for a pair of new rotors while your dealer makes a very quick and trouble-free $37 profit on the sale.

Brake Caliper Math
Brake caliper replacement requires bleeding the brake hydraulic system, which adds at least another 30 to 60 minutes of labor to the brake service operation. Nevertheless, if the vehicle owner complains of brake pulling or dragging, it’s time to consider replacing the calipers. And, while the brake hydraulics are open, it’s a good time to replace the brake hoses if they are hardened or weather-checked. Since the brake hoses can usually be installed at no extra labor charge, the customer pays only for the hoses. But, for the calipers, a typical mathematical example would be an extra $170 retail for a pair of calipers and an additional $70 profit for your dealer account.

From The Service Bay
Clearly, your professional technician might lose some price-point customers who insist on the lowest price at the expense of safety and performance. But we must also remember that we’re repairing brakes on vehicles with an original purchase in the $30,000 to $50,000 range. Keep in mind also that, when discussing retail prices, most dealer shops sell parts at a 30 to 40 percent profit margin to help pay for acquisition/warranty costs and provide additional profit on the service. On the other hand, selling a complete brake service will increase profitability and drastically reduce brake performance comebacks, both of which will result in a much better-looking bottom line for you and your independent dealer shop.

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