Denver—When business is slow, many collision repair shop owners search for ways to increase business. For Jim and Brenda Addison, co-owners of Addison Auto Center, their additional business is usually sitting in their customer lounge waiting for an oil change.
“I see body shops now trying to add small mechanical division, but we came at it from a different direction,” said Jim Addison, AAM. “The mechanical business is like having an additional DRP (direct repair program) because of the customer base.”
When the Addisons first opened their mechanical repair shop in 1982, their emphasis was on fixing Saabs, Addison said, but that led to collision repair in the late ’90s as they began to rebuild and sell them. Soon DRPs followed and business took off, he said.
Today, the businesses share the same facility at 2005 S. Holly St. but operate as separate entities sharing infrastructure, Addison said.
The loyal customer base in Virginia Village and nearby Holly Hills neighborhood to the south typically drive high-end European vehicles, such as Audis and Volvos and newer Toyotas and Hondas, Addison said. Even though those customers may come to discover the shop for different reasons, Addison said it’s his staff’s aim to let them know about all the services they provide.
“Mainly, we do everything we can to market to both customers,” he said. “We let them know that we have a body shop if they ever need it.”
Since most collision repair customers are in the shop for the first time, each receives an oil change coupon enticing them to use the shop’s mechanical services, Addison said.
Although the shops share a customer waiting area, there are two service counters, one for collision and one for mechanical, Addison said, adding that each portion has its own set of employees—six for mechanical and 10 for collision.
Service Manager Gideon Benjamin has authority in both divisions, Addison said, adding that Office Manager Betty Hunt manages a single profit and loss statement divided by two classes, mechanical and collision, in their QuickBooks accounting system.
While collision repair has a smaller gross profit margin, Addison said, the stream of work is steadier than on the mechanical side. Approximately 60 percent of collision work is derived from his six DRPs, 10 percent is customer pay and 30 percent is from other insurance companies, he said.
“Gross profit is 15 percent less than mechanical, so you have to produce more work to get the same net profit,” he said. To help manage vehicle work flow, he said he uses a color-coded Excel spreadsheet that tells what state the car is in at any given moment.
Parts vendors usually provide discounts if both shops purchase from them, Addison said. The shop uses several wholesaling dealerships, such as Stevinson Toyota East, Mile High Honda, Medved, Christopher’s Dodge World, and O’Meara Ford, he said.
Since Addison Auto Center is part of CARQUEST’s Tech Net program, Addison said they also purchase most of their parts through CARQUEST, one of their main suppliers.
CARQUEST also provides extensive training throughout the year, he said, which is typically up to nine classes. In addition, he said he sent one of his technicians to Nevada for Saab, Volvo, and BMW training through Ramac Industries, a supplier of Saab, Volvo, and BMW parts. WorldPac is another one of his key aftermarket parts suppliers who offers training.
For paint, Addison said he relies on Choice Paint & Supply, which provides Painter Mario Ramos with DuPont’s Standox line. Addison joked that his moving testimonial to the quality of Standox is a ’89 Volvo that he painted in ’97 with Standox, one that Brenda Addison wants him to get rid of. However, he said he wants to keep it because the paint job is still in such good condition.
“That’s what I show customers when they ask what their car will look like years down the road.”
In addition to providing paint, Craig Fredrichs of Choice Paint & Supply provides the shop with training, assisting in mentoring a young estimator on systems and procedures once a month, he said.
Some of Addison’s dealer vendors also provide him with free access to automakers’ Web sites to obtain repair information. “On the collision side is where the information becomes vital,” he said.
In 2005 many automakers began to increase the amount of high-strength steel in vehicle construction, Addison said. “You have to know what type of repair the manufacturer recommends and do it by the book.”
For example, the shop recently was working on a Volvo XC90 that sustained a rear hit. The rear body panel is boron steel and there is a sectioning procedure available, he said. “Knowing what the repair options are is important.” AllData’s collision application is also useful in obtaining repair information, he added.
To help control the quality of a collision repair job, Addison said he prefers not to use remanufactured bumpers. If there’s a flaw, it can delay the delivery of a vehicle because it’s the last part to get put on, he said. A technician may not notice a crack until after it’s painted.
“We’ll substitute OEM, regardless of profit, to avoid a last-minute problem.”
