According to the U.S. Bureau of Transportation Statistics, there are around six million fleet vehicles on the road in the country. A report by FleetOwner shows that companies, regardless of size, are rapidly expanding their fleets in order to keep up with the massive increase in ecommerce over the last three years.
As more companies add more vehicles, they need more people to fix those vehicles. Jake Brown, co-owner of Driven Brands franchisee Freedom Brands, says this demand shows that fleet contracts with companies can be a sustainable and viable source of revenue for collision repair shops.
“When a lot of people think about fleets, they’re thinking about rental car companies, Amazon, USPS, but there are so many more out there,” Brown says. “You’ve got pool companies, landscape companies. These trucks are getting damaged from the work that they’re doing. Fleet is always going to be there.”
Taking on a fleet contract, much less multiple contracts, is a big commitment. If your shop can handle the load, though, it can prove to be a huge boost.
Start small, staff up
Brown says Freedom Brands handles fleet contracts slightly differently than a typical shop might – one shop is specifically designated for fleet services. Nearly all of the volume that shop takes on is exclusively fleet. Every other shop in their system also takes fleet work, but they operate on closer to a 50-50 split.
Having their system optimized for fleet contracts took a lot of time and effort, but Brown says the stable, consistent flow of cars into the shop is worth the setup.
“If we get 20 cars in one week, it’s all going to be from one customer. It’s very consistent,” Brown says. “Rental car companies and delivery companies are always going to be around, so work is always going to be consistent as long as you keep up a good reputation with your customers. You’ll always have work at your shop and in the back lot ready to go.”
Brown says the No. 1 factor to account for when considering adding fleet contracts is the size of your staff. Most companies with fleets won’t send in vehicles one at a time, instead opting to send in multiple in one batch. Having enough techs to take on the work itself as well as people on the front end to help manage orders and invoices is essential.
In addition, your shop is also going to need additional tools and systems to handle the load – Brown says his shops use two different types of estimating software based on which fleet they’re contracted with. Working with your vendors, whether that’s for software, paint, parts or any other necessary supply, is critical to making sure that you’re getting the best deal on the amount of product your shop will purchase to keep up with the demand.
“You’re going to want to start small,” Brown says. “Some fleets are ready to start sending 20 to 30 different cars a week. Start small and build a reputation.”
And while making sure a customer’s vehicle is repair in a timely manner is important across the board, there’s a certain level of urgency that’s required when working with a company fleet.
“Every minute that car is off the road for your customer, they’re losing money,” Brown says. “Making sure your turnaround is good but also prioritizing them to be at the front of the line to get their vehicles back to continue making money.
Going the extra mile
Most companies are going to shop around when looking for a shop to send their fleets to. Just as shops need to do with every customer, making sure the fleets you contract with get the best deal possible goes a long way in securing their business.
Brown says fleets will expect a cheaper price per vehicle than normal retail customers. Though some shop owners might bristle at that notion, Brown says the amount of work your shop gets from those customers makes up for lower labor rates.
“They should be getting better pricing because there is more quantity,” he says. “Fleet companies will expect to be getting charged a little less – you’re going to want to make sure that your labor rates are competitive for the number of vehicles you’re doing for them.”
Lower rates are the cost of entry for getting into the fleet business. Brown says if your shop is committed to that and wants to gain a good reputation, going above and beyond for the companies you contract with can help. For example, his shops pick up and deliver every single vehicle they work on, making sure that their customers don’t have to deal with the hassle of getting company vehicles to and from the shop.
“These companies like availability,” Brown says. “They like a quick turnaround.”
If your shop is prepared to handle those kinds of accommodations and has the capacity to take on the overall volume of vehicles that a fleet contract promises, Brown says the results can be a game changer for you and your team.
“I love to base my business on it, and it’s so much easier working with five different customers that can send you 40 different vehicles instead of 40 customers that send you 40 different vehicles,” Brown says. “It’s an interesting business to run, but it’s worth it in the end.”
