Auto dealers continually struggle with the question of whether to operate an in-house detail department or contract the work to an outside detail shop.
Those who choose to operate an in-house department claim it is more economical and that they have better control, and obtain a better quality of work and the ability to sell detailing to the public.
On the other hand, those who contract to an outside shop say they eliminate problems of in-house management, undependable employees, high volume costs and the elimination of hassles, in general.
Both positions are compelling and, for each particular auto detailer, completely logical.
In-house detail department
There are some very distinct and clear advantages to having an in-house detail department for the dealer.
Preparation is the best strategy when looking at the future growth of a dealership, and understanding the comparative benefits of in-house operations versus outsourcing the work is a good place to start.
An in-house detail department affords a dealership the following five benefits:
- Profit center
When a dealership has a vested interest in a department, it should become increasingly important to equip and staff the department with the best level of equipment, technology and personnel to ensure you are getting the best work possible for your own vehicles and those you detail for the public.
If a dealer has no vested interest in the detailing, he or she will not get the same level of quality and service he or she desires. Having a vested interest and a sense of ownership in a department can really pay off, but the dealer principal, the GM and the entire organization must have the vested interest.
Several years ago, I had to the opportunity to visit a dealership. The detail staff was not aware who I was or what I was doing there, but it was obvious through their actions and level of cleanliness of the detail department that they claimed ownership for the department and for the quality of their work. It was further obvious the entire dealership, starting with the principal, had a vested interest, too.
Security at a dealership is important. Having outsiders coming in and out of the dealership, driving vehicles worth thousands of dollars, does not provide the greatest security.
If the detail employees work at the dealership day in and day out, these individuals have a vested interest in making sure things are secure and safe. Management can prevent theft within the department or certainly minimize the possibility of theft by being able to identify certain happenings being “out of place,” and subsequently, provide an alert.
3. Stability and turnover
Having the same people working on a daily basis, in a reliable manner, as far as attendance and detailing procedures go, builds up a sense of continuity and order in the dealer’s mind.
Constant change causes mistakes, confusion and concern, and a good in-house detail department can provide a reassurance that the work will occur as “normal.”
Stability and continuity definitely add value to the in-house detailing department.
Well-selected, trained and managed in-house detail employees can have greater tenure, or years of service at a dealership, than the transient employees typical of detail shops. One industry survey indicated that detail shops are liable to have turnover rates as high as 75 percent a year, or more. Any wonder the detail work is low quality and inconsistent?
The stability offered by an in-house detail department is a real benefit to the dealer, the new- and used-car departments, and to customers who might purchase the detail service.
Often, when detailing is outsourced, the remaining in-house employees can become concerned about the benefits offered by the dealership.
If the dealership is outsourcing the detail work and only has a couple of people for new-car get-ready and washing, what kind of future will they have? What kind of benefits do they have?
Certainly, what level of pay will they receive — minimum wage?
5. Profit center
There is absolutely no doubt that many believe well-trained and managed in-house detail employees can, and do, go beyond the call of duty each and every day. Dedicated, in-house detailers who know the dealership and its expectations provide the quality detailing that the dealership expects as a normal course of events, rather than an employee in an outside shop that is underpaid and unappreciated by the owner.
What the in-house detailer possesses that the outside shop employee does not is the everyday knowledge of your needs. Employees in outside shops are simply told to do the wash as fast as they can. Speed rather than quality is the watchword for the outside shop employee.
The case for an in-house detail department
Unless the dealership is very small or very poorly managed, it is no contest … an in-house detail department has so many advantages to the dealer that it is almost unfair to compare.
As opposed to using an outside detail shop, a well-managed in-house department — with good equipment and well-trained personnel — can do the detail work far cheaper, far better and eliminate headaches and liabilities. Why is this?
Here are some basic reasons:
- Additional resources
- Specialized back-up support
- Dealer is in the employment business
Since the in-house department is dedicated to detailing your dealership’s vehicles, it should and usually does, perform far better and cheaper than an outside shop. The department’s attention is only on your vehicles or the vehicles of your customers.
Specialized expertise that is more difficult for an outside detail shop to obtain includes:
— Top quality and well-trained personnel
— Knowledge of the latest detail technology, equipment and supplies. Most outside shops are using primitive technology, at best.
— Sophisticated employee training and motivational programs
— Well-trained managers and supervisors
— Quality-control programs, including measures on quality and satisfaction
— Safety programs
Specialization means that not only do the in-house detailers do the work better, but the dealership can also attract better-qualified people. The career path within a contract dealership for persons starting at entry-level is far superior to that of outside detail shop.
2. Additional Resources
The dealer can bring in consultants, and update and revamp an in-house detailing department. Not only does the outside shop lack these resources, but economically and psychologically, it is also much harder for a detail shop owner to change their own program. That said, it is easy for the dealer to bring in an outside “change agent” to help improve the department.
In addition to continuously evaluating new products and detailing methods, a dealership has buying power for supplies and equipment they need that an outside shop cannot afford.
3. Specialized back-up support
The dealer’s shop manager reports to either the fixed operations manager and/or the dealer. Back-up resources, such as safety training and general training by outside consultants, can supplement this.
4. Dealer is in the employment business
The number of employees, relative to the cost of detailing, does expose the dealer to employee issues such as:
— Workers compensation costs
— Wrongful dismissal and sexual harassment claims
— Turnover and related costs of recruiting, pre-employment checks, training, and additional administration
However, these disadvantages are more than offset by having control of quality, turnaround time and the ability to sell detailing to the public.
Done correctly, the profit from detail service sales can turn the detail department into a true profit center instead of being an expensive center.
If you need help determining which way to go, me.