Ziptide Dec. 2012

Dec. 3, 2012

Auto Locksmiths Have A Future

It is said that traditional locksmiths must adapt or die. Speaking from my personal experience, I can say that auto dealers are not likely to supplant auto locksmiths anywhere in the foreseeable future. I compete with auto dealers every day, because customers come to me as an alternative to the dealers for transponder key duplication, key origination, and remote programming. I’ve had customers come to me from dealers who didn’t have the equipment to program a remote, while I did. It is gratifying to see my one-man operation out of a single service truck whip a dealer with millions invested.

Some dealers do a dance between the parts department and the service department. Many customers think they have a price for the job after they’ve called the parts department, only to discover later that the programming is a separate price at the usual $100 per hour mechanic rate. The result is predictably an overpriced key compared to a lock shop. There is also the typical four-hour wait.

Not all dealers are like this. Some are up front and some are even competitive or nearly so on their price (I think it is beginning to sink in with some of the dealers that they are losing business to the locksmiths). This is the only fear I have, that dealers will cut their high markup. But it is unlikely that most dealers will do this, given that dealers are accustomed to high markup on service to compensate for low profits on car sales.

Service calls when all keys are lost is an example of the competitive advantage an auto locksmith has over a dealer. The customer calls in and hears, "Tow it in and leave it for the day." The service vehicle is a tow truck. The dealer now has a captive customer and the sky is the limit. The customer waits. Unless dealers develop in-house auto locksmiths (quite unlikely), or contract with mobile auto locksmiths (not very likely), they will continue to be cut out of a large part of the "all keys lost" service calls.

Dealers I’ve spoken to tell me they don’t get much transponder key volume, so many do not feel it is justified to put out the $10-to-20,000 required for key making equipment, including code cutting and sidewinder cutting, and diagnostic (programming) equipment. Ford dealers I’ve met won’t spend $1300 on a Tibbe duplicator, preferring to order the key by mail. This provides some insight into the frugal mentality of dealers, which can be turned against them. Some dealers simply decline to enter the market at all, except perhaps to order the key from a corporate source, which they know how to do.

Of course there will always be customers who dutifully go to the dealer for everything, including keys and locks, who accept the pricing and inconvenience as what it costs for what they regard as "first-class" service. But this group may be shrinking as the internet provides instant access to information regarding alternative vendors.

If an auto locksmith specializes heavily, and purchases the right equipment to support the specialization, I think the auto locksmith has a bright future.

Edward Brooks

Via e-mail


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