Materials cost
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Can anyone tell me roughly what percentage of income you are spending on paint materials? Any information would be greatly appreciated! Thanks-
That is a good question, I thought it used to be figured by dividing your door rate in half per hr for paint materials,could be wrong tho,I’m out of touch with estimating.
Charging for paint materials is being charged as paint material rate X refinish hours. Typical material rates seemed to have increased in the last 2-3 years, about the time waterbourne was becoming mainstream. Around here, typical paint material rate is charged at about $30-35 per refinish hour (which, as Jaysone mentioned, is close to half your labour rate).
In Mitchell and Audatex you can set each of your profiles up with the appropriate rates for your insurance companies.
But that is for billing. The % of income…I have no idea. I do know, however, that at $30-35 per hour, we are maybe breaking even.
why not just use the software on the paint computer to job cost and add the % markup you need :whistle:
Are the insurance companies down there setting material rates? Do any of them put a max cap for materials?
if you can produce an invoice for your materials just like one for your parts, how can they argue 😉
they pay by the paint hour here too and cap materials. but i’ve never had an issue getting paint for a job costed invoice. really, when was the last time you called the jobber and ordered 31.6 hours of clearThe industry standard that most paint suppliers and jobbers like to throw out there is 5 to 6 percent of your shops TOTAL gross monthly sales. This number only applies to LIQUIDS. So, if you shop does $100,000 per month in sales, your liquid material bill should be no more than $5000.00-$6000.00. This is also calculated WITHOUT taking any discounts that you may be getting on your materials into consideration. It should be based off refinisher cost (list cost) only.
Dry goods such as sandpaper, tape, paper, etc. usually figure to be around 15-25% of your total liquids bill. So, for every $1000.00 you spend on liquids, you are usually spending another $150.00 to $250.00 on dry goods (at list price, no discounts applied).
These are general formulas that have been around awhile. Of course, it matters what you are using, spraying, etc. It also matters what kind of work you are doing (do you get paid for all of your refinish operations, or are you taking it in the shorts from DRP’s) I keep my liquids cost at around 4.5 to 5.0 percent of our total gross sales. If I were to take our liquid discount into consideration, our ACTUAL liquids cost, on average, is about 3.5% of our gross sales. Painters that are very aware of materials cost, and very efficient with their materials (very little waste, or re-do’s) can keep your costs in this range without a problem. I personally think that getting up near 6 percent on your materials is a problem, and there are some issues that might need to be addressed in the paint shop. :cheers
I could really get going on this one, but at this late hour i’m not going to. 😉 For now all i’ll add is that everyone should be going into their estimating system’s shop profile setup and checking the box for body supplies and charging for them. Right now most shops around here are either $2 or $3 per body hour. Think about it. If you have 8 hours of body labor, and get an additional $24 on your materials bottom line, that’s huge. Not all companies are paying it, but many are. How much flack you get from companies and appraisers is directly dependent on how many other shops in your area are allowing their system to calculate body supplies. If you’re the only shop writing for ’em, you’re gonna get more resistance. The companies squeal like a banshee if shops talk about labor or material rates and there are even anti collusion laws in some places. What do you call what they all do?? Bottom line is read your P pages, memorize as much as you can so that you can engage in well informed debates when the need arises, even print copies of the ones most often needing negotiation, and write for all necessary operations. Don’t overlook the little things. The little things you overlook writing and fighting for affects your materials bottom line, not just your labor.
BTW, nice reply bgiordano, your numbers are spot on with what you hear at estimating and damage analysis seminars.
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