Profit potential: Following the revenue stream
We want to be around when, someday, the auto glass business gets better,” says Marv Degerness, owner of a Harmon Glass Doctor franchise in Fargo, N.D. “I don’t know when that’s going to happen, but somebody will have to install auto glass, and we’re going to be there to do it.”
In the meantime, Degerness offers residential and commercial glass services to offset declining profit margins on auto glass. Although the flat glass side of the business is still in its infancy—he hired a flat glass specialist in November 2005—Degerness plans for it to account for 15 percent of sales in the coming year. “The margins on auto glass are eroding, and becoming less and less profitable,” he reports. “Just within the last month, there has been a 3 percent increase in price on glass parts from all of the suppliers. We’re also getting paid less by the insurance companies. You’ve got to pick up [profit] somewhere.”
Degerness is not the only one looking to expand his service offerings. As part of an effort to identify add-on service opportunities for auto glass retailers, the editors at AutoGlass magazine interviewed 60 owners and managers of retail AGRR shops across the country in January. Forty percent reported that they offered commercial or residential glass services in addition to auto glass repair and replacement.
Mirror, commercial storefront and residential replacement window installations topped the list of flat glass services available. Other, less traditional add-on services included specialty decorative glass, closet organizers and garage doors.
Among the owners and managers of full-service glass companies, 40.9 percent reported auto glass still accounted for more than 75 percent of their overall business. Why did they decide to add residential or commercial services? “Customer demand,” says Leeann Stephens, office manager and co-owner of Stephens Glass Co. in Albertville, Ala. “There wasn’t another glass shop in our town, so we needed to offer both.”
Stephen Ingenito, president of Gino’s Glass, Aluminum, Mirror and Screen Inc. of Bay Shore, N.Y., says it’s just good business. “We’ve offered [auto, commercial and residential glass services] since our inception in May 2003,” he reports. “Diversification is the only way to go.”
Not for everyone
Residential and commercial glass services are not for everyone, however. Some owners of AGRR shops use their auto-glass only focus as part of their marketing strategies. “It’s helped that we don’t offer commercial or residential services,” reports Russ Oden, owner of Debs Auto Glass in Grants Pass, Ore. “We focus all of our efforts on the automotive side … and I use that as a selling point.”
Others simply aren’t interested. More than 21 percent of the auto-glass only retailers AutoGlass editors interviewed cited a lack of interest as the reason they didn’t do residential or commercial glass.
However, the majority of AGRR shop owners who reported that they did not offer glass services beyond auto glass repair and replacement said the primary reason was a lack of training. “If there was more training available, I would definitely get into it,” says Eric Anderson, owner of Patriot Auto Glass in Holden, Mass.
“I would like to add [residential or commercial services], but I’m not experienced,” says Aaron Look, president of Auto Glass Experts Inc. in Syracuse, N.Y.
Resources at your disposal
If thinking of adding residential window installation to your repertoire, consider going directly to the source: the window manufacturer. A number of residential window companies offer installation training and sales support to their dealers; ask for it. For a complete list of manufacturers, visit www.WindowandDoor.net and click on “Online Buying Guide.”
Like residential window companies, shower-door manufacturers are often a good source of installation training. Contact the Bath Enclosure Manufacturers Association of Topeka, Kan., at www.bathenclosures.org for more information on how to locate shower door manufacturers in your area.
If looking for an overall education on glass and glazing, check out the National Glass Association’s Glass Installer Technical Institute at www.glass.org. A hands-on training program designed for the entry-level glass and glazing candidate, this program teaches basic glass installation procedures and techniques. “We will be adding modules to this program to help educate and guide auto glass companies that are seeking to diversify their businesses; particularly those looking to expand their services to include door and window glass or flat glass,” reports David Walker, vice president of association services.
“In addition, we will soon be announcing a new topic for our popular webinar series: ‘Diversifying Your Auto Glass Shop.’ This live, interactive online seminar is perfect for busy shop owners who don’t have time to travel cross-country.”
You may already have a number of training tools at your disposal if you’re a franchise owner. Glass Doctor of Waco, Texas, for example, provides its franchisees with 25 different courses through its Glass Doctor University, an online training center for technicians, customer-service representatives and business owners available through a private Internet address on its glassdoctor.com site. The company also hosts ‘Technical Tuesday’ with Technical Director Thom Inman, who provides live, Internet-based training every Tuesday morning. Upcoming sessions will address maintenance and repair of storefront entry doors, says Dan Mock, vice president of operations. “We also rely on preferred vendors to help us with specific training, such as shower doors. They come to us and do the training at our facility here in Waco.” More information is available at www.glassdoctor.com.
As Shane Crowley, owner of Spectrum Auto Glass in Clean Creek, Ariz., points out, residential and commercial services are “a whole other world.” For an increasing number of auto glass retailers, however, it’s a world worth looking into.