On an Auto Recon Mission

Jan 28, 2010

With an improving but still somewhat diminished market for automotive accessories, some restylers are looking to attract new customers and increase service sales to existing ones. In fact, the most important word for 2010 may turn out to be diversification, and auto reconditioning services – including auto glass repair, paintless dent repair, leather restoration and upholstery cleaning – present great opportunities for restylers to broaden their horizons and grow revenue in 2010.

Restyling looked at these four reconditioning areas as complementary services to what today’s restylers can provide their customers and presents each herein overview for your consideration.

1. Paintless Dent Repair

As price-conscious consumers have become more interested in preserving the value of their existing vehicles and resellers keep a closer eye on their bottom lines, many forms of auto reconditioning have experienced a resurgence of interest. One of the oldest recon services, however, still arguably holds the title for being the most popular: paintless dent repair, or PDR.

This process of removing dents and dings from sheet metal panels with the use of specially designed tools is now one of the most widely known reconditioning services, and is certainly one of the most accepted services on the part of insurance companies.

In this process, techs access the inside skin of the body panel, applying gentle pressure until the dent is removed. And because PDR works from behind the vehicle’s sheet metal, a correct repair should need no painting, sanding or body fillers. According to Todd Sudeck of The Ding King Corp., Newport Beach, Calif., when repairs are completed right, there should be no sign that the damage ever existed.

Sudeck says that among the reasons why paintless dent repair has experienced continued longevity in the reconditioning market is the fact that there is no ongoing material cost once the tools and training have been purchased.

“For restyling shops, PDR can be done in-house, and it’s all labor and no materials,” he says. “Once you capture that skill, training and tooling, they’re not just reconditioning systems, these are money machines.”

Start-up costs can range anywhere between $2,500 and $8,000 across the PDR industry, and The Ding King’s most popular package runs $4,995. That package, for example, includes a 58-piece master tool set with a lifetime guarantee, two lighting systems (one each for indoor and outdoor applications), an overview video and instruction manual, and one week of training, although trainees can also stay longer if they feel they still need further instruction.

Sudeck says that while it’s hard to determine how long it would take for a restyling shop to earn back that initial investment because every business is different, most dedicated PDR techs have profited that amount back in the first three to six months after completing the training. He says most techs charge around $50 per panel wholesale, and about $90 for the same at retail.

“It’s really dependent on the individual, or in this case on the shop, and how much they’re actively selling the services,” he says. “If they’re doing one or two cars a week, they won’t make it back that soon. But most guys come out and they’re easily doing a lot more than that.”

Many manufacturers of PDR tool systems offer training courses and training DVDs. The Ding King’s training courses are held at campuses in Florida, Michigan, Missouri and at the company’s headquarters in California. The courses are state certified in those specific states, meaning that the instructors and curriculum have been approved by the states themselves.

Each course teaches students in a hands-on setting how to remove small and large dents on top and side panels, how to repair hail damage and large or abnormally shaped dents, among other skills. In addition, techs learn about the inner workings of vehicle panels so they can access dents on any part of the vehicles.

Sudeck says that internal polling has shown that of those who complete his company’s training courses, 92% are still doing PDR work 12 months later, although he acknowledges that some of those may be simply doing that work as a complement to other sources of income.

“It really comes down to the individual,” he says. “With paintless dent repair, it’s their own labor. If they put in the effort, they’ll get the payoff.”

2. Glass Repair

In searching for any new profit center, a restyler should initially consider one fundamental issue: What can I do to provide more value for my customers. As many shops already have existing wholesale customers in the form of new- and used-car dealers in their area, windshield and auto glass repair has quickly become one of the most logical answers to that question.

According to Jason Rariden, business development manager for Bend, Ore.-based GlasWeld, the growing popularity of auto glass repair in recent years is largely due to the inherent value of the repairs in the eyes of both retail and wholesale customers.

“It really comes down to the value of the repairs themselves,” he says. “When you consider what it costs to replace the average windshield, which is usually in the range of $300; a $30 or $60 repair using one of these systems starts to look pretty attractive. And almost all dealers are either doing this type of work already or would be interested in doing it because of the substantial cost savings it provides.”

Rariden says start-up costs for auto glass repair systems range in price from as low as $700 to as much $2,700, and generally include three main components: resin to fill the damaged glass, a resin injection system, and a UV lamp to cure the resin once placed into the damaged area. Each system also has additional unique features or equipment, depending on which supplier’s products is used. GlasWeld’s two most popular systems fall somewhere around the middle in regard to price, at $1,295 and $1,895 for a lower- and higher-end system, respectively.

“While it’s always tempting to go with a lowest-priced system on the market, those are probably not going to be adequate, especially over the long-term,” Rariden says. “The goal is to complete these repairs right one-hundred percent of the time, and that’s not always possible with some of the cheaper systems.”

Rariden also stressed the importance of proper training when considering which auto glass repair system to start with. Training options can range from a simple instructional DVD to Web-based training courses, to hands-on courses directed by industry professionals. Again, says Rariden, higher-dollar systems often provide greater training opportunities, and techs generally get what they pay for.

“It’s important that whatever training you do is extremely comprehensive to allow you to do the job well and professionally,” he says, noting that GlasWeld training often begins with a Web-based tutorial followed by a glass repair test that is mailed in to the company to ensure a tech has the proper repair skills necessary to start taking on customers. The company’s techs also are available to lead classes both at their training facilities and even on site at a customer’s facility at times.

“These courses are valuable to both new customers and techs who want a refresher,” he says. “And we do everything we can to help our techs succeed because their success is our success.”

In terms of physical space, auto glass repairs can be done in nearly any environment, both indoors and outdoors, and it’s not necessary to purchase additional equipment like portable shelters, although they can be beneficial for personal comfort when doing repairs outside in harsh climates.

Rariden says that many shops or techs add glass repair to their arsenal of services because once the initial investment in equipment is recovered (which varies depending on the cost and frequency of repairs done by the tech or shop,) repair costs to the tech are nearly non-existent. Depending on the amount of competition and pricing pressures in a tech’s area, the fee to the customer (or their insurance company) generally ranges between $30 and $60 per vehicle, and actual materials cost may be as little as 50 cents.

“The potential profit margins on these systems are great,” he says. “Once the system is paid for, that’s when you’ll really start seeing a great return.”

Rariden also notes that, like other auto reconditioning services, wholesale jobs where a tech can do repairs on a number of vehicles is ideal. He suggests marketing glass repair services to any fleet organization, including rental vehicles, city or state governments, and utility companies, among others.

3. Carpet/Upholstery Cleaning

Just as almost all retail and wholesale customers will at some point need auto glass repair, so will they often find themselves in need of upholstery cleaning systems that greatly increase the value of used vehicles both for owners and resellers.

Herb Meyer of Racine, Wis.-based Von Schrader Co., a provider of auto upholstery cleaning systems, notes that upholstery cleaning is an almost universally valued service for car dealers and resellers, which creates a great amount of demand for their systems.

“For many restylers, they’ve already got both retail and wholesale customers who need and could profit from having this service done, and that’s where the opportunity comes in for a shop that adds on this service,” he says. “It creates big numbers on the returns over time. And, people are more aware of cleaning what they have today, as opposed to replacing everything. That creates demand for this type of service as, well.”

Any number of cleaning systems is available, but professional-grade packages are recommended. For an upfront investment of approximately $4,000, a start-up package includes all the necessary portable equipment and supplies for interior detailing of automobiles, RVs, boats, aircraft, trailers, trucks, trains and busses. Included in the supplies package are such items as cleaning solutions for carpet, fabric and leather reconditioning, spot removers, and carpet and fabric protectors. A new tech can recoup the initial investment and start garnering a significant profit margin quickly, Meyer says. The specific amount of time depends on whether the tech or shop is actively selling the service, as well as the exact cost of the system a tech chooses.

Meyer says that cleaning the interior carpet and upholstery with his system, for example, on one average-sized vehicle will take from one to two hours for which the tech will charge anywhere from $50 to $150. Where a job will fall within that range, “depends on the size of the vehicle as well as any add-ons like carpet and seat soil protection treatments,” says Meyer.

He adds that once the initial equipment is paid for, most cleaning jobs require only about $2.50 worth of chemicals. That, he says, creates a great profit margin for techs or shops that perform the work.

While many restyling shops that choose to add upholstery cleaning to their list of services will perform the work in their own service bays for retail customers, others will find that they can increase efficiency by taking their system directly to wholesale customers’ lots to perform their service on multiple vehicles in a short amount of time. Most systems are designed with portability in mind and can fit in the trunk of car.

“When they work outdoors,” Meyer notes, “they might also want a pop-up tent for weather, as well as a small generator, good lighting to see the initial problems and the result of the work, and enough space around each vehicle for comfort.”

With extensive training courses and DVDs available from a number of companies in the market, just about anyone who is already working around vehicles will have the aptitude to be successful in auto upholstery cleaning, Meyer adds.

“We offer a training program, but many people can simply watch an instructional DVD and learn most of what they need to know to get started,” he says, noting that Von Schrader training also includes unlimited ongoing support and assistance, as well as marketing and advertising aids, business manuals and support materials that cover nearly every aspect of owning and operating an independent business.

“With all of the support we provide, you really just need to have a good deal of common sense, some math skills and mechanical aptitude, and be a detail-oriented person,” he adds. “If you’ve got those qualities, you will be successful in this field.”

And that success isn’t limited to just passenger cars and trucks, he notes. Most upholstery cleaning specialists also venture into work on passenger trains, airplanes, marine craft, buses and RVs, which are all “great niches for these techs [and] that don’t generally require any additional training,” says Meyer.

4. Leather Restoration

While not every vehicle has a leather interior, a good number of those that do and are also more than a few years old are in need of some TLC, which creates another auto reconditioning opportunity for restyling shops looking to expand their services: Leather restoration.

Among the leather restoration systems on the market, Minneapolis-based Valspar offers one under its Guardsman brand, says the firm’s vice president, Stuart Graff. The system is primarily water based and is used to restore leather that has lost its protective topcoat and has experienced color fading, abrasion and cracks, as well as UV damage.

In all, there are more than 15 types of common damage to leather interiors, says Graff, including any number of various cuts, scratches and burns. To stop the precipitous decline of aging and damaged leather, companies like Valspar offer systems that repair damaged areas, restore the color coat and protective top coat to OEM standards, and restore the desired amount of slide and grip, all of which creates a dramatic increase in value for the vehicle owner.

Like other reconditioning services, the proposition offered by Valspar and others is simple: Repair instead of replace, and you’ll be saving money and adding value to an existing vehicle.

“Even when you compare it to replacing a leather interior with a seat cover, which obviously isn’t always a great option anyway, leather restoration is still a far greater proposition in terms of value to the vehicle owner,” says Graff.

Graff says his system requires a modest number of tools, many of which – like a heat gun and spray gun – a restyling shop often already has around the shop. In addition, his kit and others come with varying combinations of chemicals and cleaners, a heat iron, patterns to replicate the original grain pattern of the leather seat, and a heat gun to dry and cure the final repair.

Valspar’s kit specifically sells for around $1,200, which provides tooling and enough material to repair 10 complete seats, although most seat damage requires much less product as the damage is confined to one or a few specific locations on the seat itself.

“Many times the damage will be only on the left side of the driver’s seat, which gets the most wear, and in that case you may get several dozen seats repaired with one kit,” Graff says. “For that work, most guys will use less than $20 worth of material and charge between $100 and $200 for each seat repaired; so there’s a great margin on the work. And for that $20, you add hundreds if not thousands of dollars to the value of the vehicle, which makes it very attractive to the vehicle owner.”

Like most other types of reconditioning services, companies in the leather repair niche offer a wide range of training options, from simple DVDs to in-person, hands-on training. Valspar, for example, offers a one-day training course that has a limited class size of about 6-12 people. Graff says that by keeping class sizes small, the company is able to better ensure that every student is learning the necessary elements of the system, something he doubts could be done by simply watching a DVD.

The Valspar training course focuses on two main areas: Two-thirds of the day focuses on repair (including cleaning, repairing each of the 15 main types of damage, adhesives and applications, and properly copying grain patterns), while color blending and matching consume the remaining third of the day.

“Those courses also include information on modeling the program to their specific business so they can determine the value it will provide to them,” Graff adds. “And throughout the day, we’ll discuss the different business opportunities related to providing this service.”

In addition, Valspar also offers an online user community that features various tips and tricks on the restoration process as well as information on business opportunities. Many of those opportunities, Graff says, are outside of the traditional automotive markets, including furniture, handbags, as well as marine and aircraft applications.

“Basically, if a customer comes to us with an idea on a new application, we’ll help them to make sure we’ve got the appropriate safety certificates to make it happen,” he says.