Whether for profit margins or extra referrals, taking on fleet work may give your body shop just the boost it needs
Sofia Collision, which has two shops in Rochester, N.Y., has several large fleet accounts for businesses based nearby. Owner Tony Sofia likes having the steady work, adding that his business has benefited from clients' growth. "One company started with 80 service trucks," notes Sofia. "They now have over 300, with cars and minivans."
Sofia Collision also gets called upon to customize fleet vehicles for clients. One client pays $500 per truck to have Sofia install ladder racks.
Fleet clients like having a single source for their fleet repairs — and the volume of their business gives them clout. "We usually give them preference," Sofia says. "If they come in with a vehicle down, we turn it around ASAP."
The fleet business is also good for referrals, Sofia notes. "The opportunity for new customers explodes because you're dealing with people throughout a company, including people affiliated with the fleet and the drivers," he says. For example, a truck driver for the client may decide to bring his own car to Sofia when it needs bodywork.
Another type of fleet work can offer a steady source of work, but generally at a lower profit margin. Some large organizations, especially those that have fleets of vehicles spread across the country, enlist third-party maintenance firms to manage the collision repair process for their vehicles. If, for example, a sales representative who handles a remote territory were to be involved in a collision, the maintenance firm would refer him to a body shop in his area, where he would take the car for an estimate. After the estimate is approved, the body shop does the work — but at a discount that may run in the range of 10 percent to 15 percent.
Sofia, who is on several such programs, says they generate some of his company's lowest profit margins. Another drawback — the authorization process for such work can be a long one, because the maintenance firm and the organization owning the vehicle both must give their okay. Sofia says, despite the hangups, his shop participates in such programs because of the extra referrals they generate.
Quality Werks Collision Center, an Algonquin, Ill., based body shop, also does fleet repairs for third-party maintenance firms. Owner Rich Galati agrees that such work requires patience. "When the customer comes in for an estimate, you can't schedule the work immediately because you have to wait for a purchase order — and that may take three to four days to a couple of weeks," he says. To complicate matters, about 50 percent of the time the maintenance firm assigns an independent adjuster to look at the vehicle before giving its authorization. The independent adjuster typically approves the Quality Werks quote as written, Galati notes, but the process is another source of delay.
Like Sofia Collision, Quality Werks also handles fleet work for some local organizations directly. Galati agrees with Sofia that the margins on that type of work are some of his healthiest. "They're more concerned with cycle time and the quality of the repairs," Galati says. Quality Werks is a secured facility, which is another plus for some clients — particularly those that have expensive equipment on their vehicles.
Unlike some shops, Quality Werks has a part-time salesperson whose responsibilities include soliciting business from organizations that have fleets. Having that salesperson adds to the cost of doing fleet business, but Galati says the extra cost is easily recovered in extra work. "You have to go out and look for work now more than ever," he notes.
