Want your auto body shop to make more money? You probably answered yes. Who doesn’t want to make more money? Here’s the amazing thing: This money-saving strategy is so easy. You don’t have to bring in any new clients. You don’t even have to charge more. All you have to do is get the best credit card processing out there for automotive businesses. So, the question is: How can you get the best credit card processing? As the owner of an auto body shop, car dealership, car wash, or towing service, this question may not have even crossed your mind. But it should have! For far too many small business owners, credit card fees dig into profit margins and affect financial wellbeing. If you’ve been paying 3% or more per transaction in processing fees, you’re probably losing hundreds—if not thousands—of dollars per month. Have we gotten your attention now? In this guide about automotive credit card processing, we’ll discuss how you can eliminate credit card processing fees and take home 100% of your revenue. Read it, take action, and get your auto business on the path to greater prosperity.
You know your auto business better than anyone. And you understand the amount of capital and work you’ve put in to launch and run it. You probably spent a good deal of money opening your auto body shop. According to small business experts, average startup costs for an auto body shop hover around $50,000, with the main expenses including your diagnostic machine, rental/mortgage fees, vehicle lift, tool sets, and insurance costs. Aside from that, you have to face ongoing expenses. From labor and equipment maintenance to rent and insurance, you most likely spend tens of thousands per month to run your auto body shop. Beyond the money, you’ve worked hard to give your clients the best possible service and ensure that your company continues to run successfully. From the early mornings to the late nights, you’ve given it your all to fulfill your dreams of being your own boss and doing something you love. Considering that, it only makes sense to protect your investment. That begins with handling your money well and taking steps to increase your auto repair shop’s profit margins. This is precisely why you should pay attention to how you process payments. Because having the right automotive credit card processing can increase profit margins and make your business more financially sustainable. That’s what you want, right?
Here’s the good news: You operate in a thriving industry. The automotive repair and maintenance service market is projected to reach $810 billion by 2026 (up from $516 billion in 2018).That presents a huge opportunity for continued success and growth. And as you know, in order for that to happen, you need to take care of your clients, strategize your business’ development, and watch your money carefully. This is where you have to think about your credit card processing. It’s one of the biggest keys to increasing your shop’s profit margin. You may be asking, “How so?”First, picture this scenario:
Overall, you’ve paid $63 in card processing fees on a total bill of $1,800.Now, you may think that’s not too bad. If you make a gross profit of 28% (the auto repair industry average), you’ll have made $504 on the transaction. You’re right—it’s not bad. But you could be doing better. Let’s take a step back and do a quick calculation:
Those credit card fees are eating up 12.5% of your profits. That’s ridiculous!So, how does this work out over a whole year for your auto body shop?Let’s say you generate $700,000 per year in revenue, and $400,000 of that revenue is paid with credit cards. According to ValuePenguin, average credit card processing fees can easily hit 3%.
So, of that $400,000 of credit card revenue, you’ll end up sacrificing $12,000 in fees. That much can easily kill your shop’s margins. Clearly, if you want to increase your profits, you’ll have to address credit card processing fees. If you were to completely eliminate credit card transaction fees, you could boost your profits by more than $10,000 per year. Just think about what that $10,000 could do: Not only would it increase your personal income, it would also put your shop in a better financial position.
Now that you’re motivated to find the best credit card processing for your small business, let’s take a look at the first step in doing so: Shopping for a reliable, low-cost merchant service provider (MSP). Most importantly, you’ll need to find an MSP with the right capabilities. After all, auto repair centers (especially those that offer towing) have multiple points of service. You’ll need an MSP that offers speed and reliability, as well as:
In addition, you’ll want to find a payment processor that uses pass-through pricing (not tiered pricing). Here’s why:
That said, you can’t just opt for any MSP that offers pass-through pricing. You need an MSP that provides great services at a low cost. That means that if you want to get the best automotive credit card processing, you’ll need to read the fine print. Here’s what to keep in mind when shopping for automotive credit card processing companies:
When you’ve done your research on the different payment solutions for your auto body shop, you’ll want to narrow down to three low-cost, high-quality MSPs. From there, attempt to negotiate the MSP markup. While other fees aren’t negotiable (for instance, you can’t tell Visa you’re simply not going to pay them as much), it’s common for merchants to get a 5–10% discount on the MSP markup. So, it can never hurt to ask!
Having the best credit card processing solution is the first step to eliminating credit card processing fees. However, if you want to increase your auto repair shop’s profit margins even further, consider implementing a surcharge program, as well.With a credit card surcharge program, the idea is simple: You sell $100 and see $100 in your business account. That’s right: You take home 100% of your revenue. So, how does it work? With a surcharge program, you give customers a choice: Pay with cash, debit card, or check and get the standard price, or swipe a credit card, and pay extra to cover the processing fee. By doing this, you give customers an option. You can save money by paying with cash, debit card, or check. Or, they can go with the convenience of swiping their card. As an added bonus, you get the benefit of not having credit card transaction fees eat into your bottom line. Yes, you read that right. With a surcharge solution, you can completely eliminate credit card fees from your expenses. That enables you to increase your auto repair shop’s profit margin and, ultimately, run a more successful business. Considering a surcharge program is 100% legally compliant and works with credit card installment plans, it makes perfect sense to add a surcharge solution to your credit card processing strategy.
At NadaPayments, we’re ready to help you implement a surcharge solution and increase your auto repair shop’s profit margin. We’ve done our homework and know all the rules of the game. Partner with us at NadaPayments and start taking home 100% of your revenue. With us, you’ll have the freedom to focus more on serving your clients and building your business. Contact us at +1 (929) 293-1800 or click the link below.