Training: Shoemaker on P&M strategies that incentivize saving money
John Shoemaker, an industry speaker, retired business consultant, and former BASF Refinish business development manager, shared in April how, over the years, he has helped shops temper paint and materials (P&M) consumption.
The key is either to get accurately paid for the P&M used or to use it more practically, he said. Shoemaker spoke during the Southeast Collision Conference in Charlotte, North Carolina, as part of the Collision P.R.E.P education lineup.
“I hear this a lot: ‘My paint costs too much.’ Is [there] a solution? I agree with you, it does,” Shoemaker said. “Ford F-150 vendors cost too much, too. So, we’ve got to put it into perspective: it’s actually how it’s consumed that really, really matters.”
He shared five steps to do just that — measure, analyze, develop a strategy, take action, and repeat the cycle.
Measure
The first step is to measure how paint is consumed and billed through:
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- Accurate damage assessments
- Purchasing based on consumption
- Ordering from an approved product list
- Understanding of what drives costs, including the painters
Shoemaker recommends several metrics to measure paint use: paint hours per repair order (RO), paint sales per paint hour, paint sales as a percentage of total sales, paint hours per gallon of clearcoat, and paint cost compared to paint reimbursement.
Paint hours per RO
According to Shoemaker, the industry average paint hours per RO is 9.5. Twelve hours would be considered high performance, he said.
“We all write good sheets [but] can we write them a little bit better? How do we purchase our products? I have shops calculate the materials at the last day of the month, and what they’ve spent is what they measure their profitability against,” Shoemaker said. “But then you have a painter that says, ‘We’re low on this gallon of the clear. Let me order it on the morning of the 30th.’ So, it gets built. Is it consumed then? No. So inventory of the products on hand helps you.”
He also recommends proofing product lists for potential money savings from narrowing redundant products, such as three different kinds of body fillers, he said.
Ideally, the average paint hours per RO should be between 9.5 and 11 hours, Shoemaker said.
“I do a lot of appraisal audits, and I see a lot of six-and-a-half and eights out there in the world,” he said. “That tells me that somebody’s putting paint somewhere it’s not getting billed for. …when paint hours are low, it’s more often something getting painted that’s not on the damage appraisal.”
Paint sales per paint hour and paint sales as a percentage of total sales
Shoemaker said this will determine if your shop is receiving your door rate. The door rate is the industry average, he said. Door rate plus $5 would be high performance, he said.
“Through my estimate audits, I’ve seen where shops are getting $16.83 because they took a $450 paint cap and it contested,” he said. “Paint sales is a percent of total sales. Some people look at this and some people don’t. What’s really odd is we spend a lot of time on paint materials, and it’s really only 0.5% to 10% of our business, but it’s the most costly part of our business if we don’t get paid for everything we use.
“We’re drilling down on 10% of our business, but it’s the part of the business that can cost us money if we don’t pay attention to it… It’s a true number to your paint sales divided by the RO hours or paint hours on the RO. If you’re fixing a lot of high-end vehicles, a headlight can skew that number by a couple percent, so don’t let that stress you.”
The industry, on average, sees 8.5% paint sales, Shoemaker said. Ten percent marks the “high performers,” he added.
Paint hours per gallon of clearcoat
While this isn’t commonly measured, Shoemaker said clearcoat consumption is a good usage indicator to track.
The industry average is 85 hours, while 90 indicates high performance, he said. Shoemaker noted that blending typically drives down the profitability of clearcoat.
The industry average earned per gallon of clearcoat is $25, while around $22 is considered high performance, according to Shoemaker.
“I see some that are getting 100 [hours], and I kind of question that,” he said. “If you’re getting 100, how many mils of clear are actually on that car? We have to watch that number just a little bit. But I also see shops that are getting 60. Does that show you a true picture of the expense versus the cost, if you’re only getting 60 hours and you’re spending $600?
“Mostly when I’m reviewing appraisals, it’s because of blending that really drives down your profitability… Higher-than-average cost always drills down to usage. You guys are going to go back to your shops and you’re going to focus on that word usage because that’s where your cost is.”
Paint cost versus paint reimbursement
“This is actually talking about your gross profit,” Shoemaker said.
The industry average is 44%, while some shops are up to between 51% and 55%.
“If you’re not in the 40% to 505 range, you’ve got a usage problem, I guarantee you,” he said. “We have to stress this one. We have to review our costs on every single repair order no matter how small it is. I find the biggest errors on the small ROs, the bumpers. …If you’ve had to mix 8 ounces and by the material calculator you only needed five, you’re going to have to bill for those other 3 ounces, or you’re losing money from day one.”
Shops should bill for materials consumed over the material allowance or the damage appraisal, he said.
Analyze
“We’re all not going to be top performers tomorrow,” Shoemaker said. “The best way to become a top performer is to look at your numbers and see where you stand and what kind of incremental improvements you can make day to day to grow that. Then, compare yourself to averages, trends, and benchmarks.
“If you try to jump on the benchmarks right away, you’re going to frustrate people because you’re giving them a goal they can’t reach. And that’s probably one of the disheartening things as a leader we can do is give somebody a goal they can’t reach.”
Examples of comparisons to internal goals are by each technician and each writer, he said.
“What is the guy that with 11.2 doing different than the guy that’s getting 9.4? If we look at his reimbursements, one’s getting 48.79, another one’s 46.76, and another one’s 46.83,” Shoemaker said. “What are they doing different? Are they up against the DRP? Are they billing properly? Are they invoicing for the materials? We want to know all that.
“Another thing is you have gross profit percentages available in some of your reports you get from your paint manufacturers and other products.”
When comparing averages, look at paint cost only by refinish hour, P&M cost by refinish hour, et cetera, he said. And then evaluate trends by paint hours per RO.
To compare to the benchmarks you’ve set, evaluate by group average, median, 75% percentile, 25% percentile, and so on, he said.
Develop a strategy and take action
To develop a strategy, Shoemaker said to pick three areas of opportunity for improvement, such as paint hours per RO, paint hours per gallon of clearcoat, and paint cost per paint hour, and then identify corrective actions to develop sustainable solutions.
“When I was out in the field, I liked to look at the redo forms,” he said. “Your painters are going to say, ‘Hey, I really don’t like writing down [that] I had to repaint something.’ …When I worked for a paint manufacturer, I wanted to know why because even if your painters have a problem with a color and they’re having to mix it five or six times to get it right, I want to send a tech rep in there.
“A redo form is a coaching tool. Maybe we had an apprentice put a bumper on, and he scratched three bumpers today. Maybe we need to put a tech with him so he doesn’t do that. That’s the purpose of a redo form, not to slap somebody with it and say, ‘Hey, we had to repaint this fender because of you.’ We need to find out the why and coach them through the why. That helps us.”
Shops can also look at productivity reports, which Shoemaker said all of the paint manufacturer systems have.
“They tell you how much it should cost and how much it did cost,” he said.
“Taking the action, that’s the hard part. A lot of times we know what to do, we know how to do it, but as soon as we go to do some of that, Mrs. Jones comes in and says, ‘My bumper doesn’t match.’ And you have to deal with that, so we’ll build some strategies — we want to establish a process communicated as an opportunity, and then reward successes.
“We want to push that why. …Every time there is a new cost or growing cost trend, there must be a new sale.”
In other words, as color trends and paint processes change in the auto industry, repair orders should reflect that so shops are properly paid.
“We don’t have solid blacks anymore, but there’s a lot of things that we have to do just on a solid black car,” Shoemaker said. “We have base clearcoat finishes, three-stage [refinishes], underside, matte finishes.”
He also used a white vehicle as an example.
“When you lift up the hood, what color is the underside of the hood? It’s a matte white, so that’s a second color you have to mix to complete that job,” Shoemaker said. “But if we don’t annotate that on the appraisal …we don’t get paid for that.”
He added that refinishing internal components should also be considered.
“Oftentimes they’re a different color,” Shoemaker said. “Is epoxy [primer] applied to metal before you apply body filler? Is that on your damage appraisals? Is primer cheap today? It’s about the same price as your clear. If our body techs are applying that primer or if the primer’s being applied and it’s not aligned on our damage appraisal, we might as well pour that primer into the waste bucket because we’re not getting paid for it.”
He concluded that, ultimately, results and successes should be rewarded, and re-evaluation of usage versus costs and strategies for improvement should be consistent and repeated.
“We want to talk to them and coach them through success,” Shoemaker said. “There’s a reason that they’re telling you your mix ratios and how much you need to use and when, and when you overmix, it’s increasing costs.
An example he provided of a reward is to pay employees for saving product.
“We put it on a rolling tier because this particular shop was pretty high, and so we changed the payouts,” Shoemaker said. “We got it to where we got them to $8.95 lower on their paint costs just by explaining the why and helping them manage their usage. It gained them $64,000. they paid out over the course of that year — $64,000 they saved on paint and materials. They paid out over the course of that year $14,468.”
In general, when explaining “the why” behind costs, Shoemaker said it’s important to create a performance-based incentive plan.
“We have to change behaviors and create new habits, then repeat,” he said. “That’s the sustainable part. …we have to talk to people. Is it working? …We’ve got to be able to get them to where they understand it and can put it into practice. Will your system work every day? Is it repeatable? Illustrate the savings. The biggest part is we’ve got to keep the focus. We can’t let one RO slip through our hands without being audited and reviewed.”
Images
Featured image: John Shoemaker speaks on April 23, 2026, in Charlotte, North Carolina, during the Southeast Collision Conference. (Lurah Lowery/Repairer Driven News)