Increasing Service Center Profitability with New Generations Service TagsBy Sam Komeha
Many assume that the shiny, new vehicles on a dealership’s lot are the breadwinner of automotive dealerships. However, those who are familiar with the automotive industry know that everything isn’t as it seems. That truth is that new vehicle sales aren’t the big money maker they appear to be.
The most profitable area for dealerships
So, if selling new cars isn’t the most profitable area for dealerships, where is their money coming from? Generally, a dealership’s income is generated through a combination of new and used car sales, trade-ins, financing and insurance, auctions, and their service center. Of these income streams, service centers are among the most profitable. Most service centers generate about 15.6% of the average dealership’s profit.
Service centers are an indispensable part of dealerships, especially as fewer people are buying new cars. When less new cars are purchased, that means that there are more aging vehicles on the road. In addition to the routine maintenance required for all vehicles, such as oil changes and small part replacements, older models of vehicles are more likely to need larger repairs, like transmission replacements and engine overhauls. These repairs, whether paid for by the manufacturer for vehicles under warranty or paid for by the vehicle’s owner, are big money makers.
Important source of revenue
Since service centers can be such an important source of revenue, it is beneficial for dealerships to focus on streamlining their service centers to make them more profitable. One way that service centers can start saving time, money, and materials is by implementing New Generation Service Tags. These service tags replace the current, antiquated use of paper forms and disposable paper key tags.
This new service tag system works by replacing the current paper systems with a one-piece service tag and a reusable, eco-friendly plastic key tag. The service tag includes five work tabs for work to be done which eliminates the time-consuming task of writing down all the services the vehicles will need.
Reduce wasted time and money in a variety of ways
New Generation Service Tags reduce wasted time and money in a variety of ways. Time will be saved because service professionals won’t have to spend time filling out countless forms and paper tags. This means that customers will get their vehicles more quickly, which increases the chance of repeat business. The cost of paper forms and disposable tags will be eliminated, saving dealerships up to 75% on their service tag costs. Customers will also enjoy the fact that they no longer have the nuisance of a paper rearview mirror tag and an unattractive paper keychain tag that they must dispose of.
Every industry is seeing a push toward new and ground-breaking products. Embracing these advancements is especially important for automotive dealerships, which often have trouble evolving as times change. It may be that these innovative service tags, created by serial entrepreneur Sam Komeha, are just what dealerships need to increase the profitability of their service centers and ensure their service centers continue to be constant and reliable sources of income.
About the author
He is a serial entrepreneur who runs several businesses in the automotive, luxury and IT fields (SK Silver LLC, Auto Service Tags LLC and Auto Smart Deals LLC). Detailed profile: Authors Profile