Revenue in Remotes – 2019

Jan. 3, 2020
If you learn the basics, invest in tools and inventory, and promote your business, you can compete successfully with automotive dealers

The first vehicle remote was introduced in 1993 by Renault.  When Americans think of Renault, many of us think of quaint automotive abominations such as the Renault 4CV and Dauphine.  But those vehicles helped establish the small car industry worldwide and launched Renault into the multinational conglomerate that it is today.  Even though the Renault brand left the U.S. in 1987, it is now considered to be the ninth biggest automaker in the world, and owns over 40% of Nissan as well as significant portions of Volvo, and manufactures the engines used by Mercedes in their A and B series vehicles.  With that in mind, it’s easy to see why the use of automotive remotes spread so fast.

The first car that I owned with a remote was a 1996 model that I bought used in 1998.  At the time, I was going through a divorce and I will never forget the dirty look that my ex-wife gave me when she first saw me lock the car with the remote.  That “if looks could kill” glare said in no uncertain terms that my new car was an extravagance, and that I was some sort of snob for owning it.  But soon, remotes were everywhere, and I recently programmed a couple of remotes for my ex, who I now get along with a lot better than I did during the last few years of our marriage.

In short, vehicle remotes are no longer a convenience, but have become a necessity.  The vehicle manufacturers were quick to realize that remotes could also provide a significant revenue stream.  Most manufacturers try very hard to drive all replacement remote sales back to the dealers.  I often tell my customers that the manufacturers change the specs on the remotes “like most people change their socks,” just to force owners back to the dealerships.

That strategy has had many unintended consequences.  The complexity of the system has added thousands of new part number to the dealers’ inventory.  And, as vehicles age, demand for remotes for older vehicles drops off while at the same time, they are being forced to carry many more remotes for the current vehicles.  The result is that many dealerships now stock only the most common or new remotes; making remotes for older vehicles into “special order” items.

So, we are left with a situation where the manufacturers have made vehicle remotes a “necessity.”  Yet the very system that they have set up keeps them from being able to satisfy the demand for the product.  In addition, they charge prices that are one step away from highway robbery, and then make the customer wait for days for the product.  As a final insult, they make you schedule an appointment on their terms, keep your car for hours while you either arrange other transportation, or sit in the waiting room while being barraged by advertising designed to make you want a new car, even if your current vehicle is only a year old!  How can locksmiths, hope to compete against the dealerships in this market?  It’s actually pretty easy, but there are many things that you need to know before you jump into the market.

Understanding the Product

Keep in mind that the specifications for individual remotes will change constantly.  In order to compete, you will first need to understand basic remote technology.  Below are some of the principles that you should keep in mind.

Fixed Code Remotes – These are generally the first generation of remotes and might as well be obsolete.  But many consumers still have misconceptions about remotes in general because of these early remotes.  When a button is pressed on a fixed code remote, it always transmits the same data.  When a vehicle is programmed to work with a remote, it “learns” the individual commands transmitted by that remote.  This means that the door will unlock every time the car detects a specific data-stream.  It doesn’t matter if that data-stream comes from the remote, a passing aircraft, a garage door opener, or devices designed to copy and re-transmit the signal.  This was the big weakness of fixed code remotes.  We’ve all heard or read about devices that would “steal” the remote codes and allow a thief to gain entry to your vehicle.  Those devices do exist, but they, like the fixed code remotes themselves, are obsolete now, but many consumers still think that such things can be used to unlock their cars.

Rolling Code Remotes – When the manufactures realized the weakness of the fixed code systems, the next step up the ladder was rolling code remotes.  The remote in a rolling code system was similar to a fixed code system, but the data-stream transmitted by the remote for an individual button would cycle through a finite series of different codes.  During the programming process, the vehicle would “learn” all of the codes for a specific remote and would also learn the correct sequence that it should expect to receive those codes.  For example, a rolling code remote might use 100 different codes to unlock the doors.  The remote would start off with the first code, and then the next time the button was pressed, it would transmit the second code, and so on until all 100 codes had been transmitted.  Then the remote would start over at the first code.  If a thief copied the code with a device, that code would not work again until the correct remote had been used 99 more times.  Naturally, the weakness in this system was synchronization between the vehicle and the remote.  If the two got out of “sync,” The system would not work again until the vehicle and the remote were “re-synchronized.”  The need to periodically re-synchronize the remotes was annoying to the owners and the whole system was scrapped within a few years, making them also obsolete today.

Encrypted Remotes – Virtually all of today’s remotes use encryption of one kind or another.  Many people don’t realize that encryption requires two-way communication.  That means that the remote must be able to not only transmit, but to receive information from the vehicle as well.  Typically, the communication between the remote and the vehicle is referred to as a “query and response.”  When a particular button on the remote is pressed, an identification signal for the remote is sent to the car along with a signal telling the vehicle which button was pressed.  If the vehicle recognizes the identification portion of the signal, it will then transmit a “query” signal to the remote, based on what the vehicle has on file for that individual remote.  If the remote responds with the correct “response” signal for the query, the vehicle will not only perform the function associated with the button that was pressed on the remote but will also “know” which remote was used.  This means that the data exchanged between the remote and the vehicle will change every time the remote is used.  The added ability for the vehicle to identify the individual remote is also used in some high-end vehicles to adjust the seat position, mirrors, radio, and temperature control to those on file for that remote.

The FCC ID Number – Remotes used on vehicles sold in the U.S. are required to have an “FCC ID Number.”  (Photo 1)  This number not only represents the frequency of the remote, but also the specs for the data that the remote transmits and can receive.  This is the key information that you need for determining which remote will work a particular vehicle.  If the FCC ID Number is not correct, you are wasting your time attempting to program a remote.  In many cases, you will find that a particular year vehicle may call for more than one FCC ID Number.  You MUST use a remote with the correct FCC ID Number for the vehicle.  If you do not know which FCC ID Number your vehicle requires, you can try both and see which one works.  Or, you could use the VIN number of the vehicle to get the OEM part number for the correct remote.  Armed with the OEM part number, most distributors can get you the correct remote.  This is another reason why I try to maintain a good working relationship with the parts departments of my local dealers.  The doughnuts that I drop off occasionally and the prepaid pizza gift cards that I give to my best dealers allow me to place a quick call to get an OEM part number from the VIN that otherwise would be difficult to get.

Types of Remotes

Fobs – The original remotes were all fob style remotes.  (Photo-2)  These are independent devices usually kept on the keyring along with the vehicle keys, but they are not actually a part of the key.  This system allows the remote or the key to be replaced or changed as needed.  Since almost all fobs use a plastic shell, they are subject to breakage.  The attachment point to the keyring often breaks or wears through allowing the remote fob to be lost.  This fact alone can generate revenue for locksmiths in replacing lost or damaged remotes and selling sleeves or cases that protect the remote and allow a remote with a broken or worn out attachment point to be reattached to the keyring.  (Photo-3)

Integrated Remote Keys (IRK) aka Remote Head Keys (RHK) – Integrated remote keys combine the key and the remote into one device.  (Photo-4)  The idea of combining both devices is logical, and in some cases well executed.  Unfortunately, most are poorly designed and use a plastic case that does not hold up under normal usage.  To the best of my knowledge, no IRK is even remotely waterproof.  These weaknesses are bad for the consumer but offer locksmiths a reliable revenue stream in replacement IRKs and “Shell Keys.”  (More on this later.)

Proximity Fobs aka “Smart Keys” or Prox Fobs – These are the current rage among vehicle manufacturers.  (Photo-5)  A proximity fob allows the owner to enter and start the vehicle without removing the fob from their pocket or purse.  In some cases, the seats, mirrors and other devices are also automatically adjusted to the individual user’s pre-set positions.  As you can imagine, prox fobs are significantly more expensive that IRKs, RHKs, or fobs.  Most people keep their prox fobs attached to their keyring, but a fair number of vehicle owners choose to keep their fobs separate from their keys.  I have been called out to replace prox fobs that have been flushed down the toilet by children, and I have even replaced a fob for a Prius that found its way into a garbage disposal.  Like IRKs, prox fobs are NOT waterproof, so if you work in a waterfront community like I do, you will find yourself replacing a fair number of water-damaged prox fobs.

Income Opportunities

As I said earlier, the whole remote market is rigged by the vehicle manufacturers to drive consumers back to the dealerships for replacement remotes, IRKs, and prox fobs.  But the law of unintended consequences, (a corollary of Murphy’s Law) means that this market rigging has opened up new income opportunities for locksmiths.  Most dealers stock only the remotes for current vehicles, leaving the market for vehicles that are a few years old wide open.  Dealers are generally not open on nights and weekends when the majority of keys, fobs, IRKs, and prox fobs are lost or stolen.  Dealers will require the vehicle to be towed back to the dealership if no working key or prox fob is available.  Dealers are notorious for charging an “arm and a leg” for remotes, IRKs and prox fobs.  In short, the “rigged system” has created lots of incentives for vehicle owners to search for alternative sources for remotes, IRKs, and prox fobs.  In many cases, locksmiths are ideally situated to take advantage of these opportunities.

The real problem for us is to get the word out that we can provide these products and services in the first place, and that our service and prices are better than the dealers.  And especially that our prices, service and products are superior to the thousands of new websites offering remotes at insanely low prices.  In addition, we also must understand our individual markets well enough to stock only the products that we can reasonably expect to sell.  Many locksmiths have tried and failed in this market simply because they tried to stock too much and tied up too much money in an inventory that just collected dust.

Of course, if you are going to go into the business of providing remotes, you are going to need a provider that you can rely on for the remotes themselves.  Your provider may be as close as the distributor you already use for your other automotive products, or you may want to check out some of the providers that specialize in remotes.  Fortunately for us, there are several quality providers in the automotive locksmith community that provide excellent products, information, and service.  The provider(s) that you choose to work with will vary with the part of the country you are in and your individual market.  I have one hard and fast rule for the providers that I deal with; I will not deal with a provider that competes with me.  If a provider also sells to the general public at prices that are the same, or nearly the same as mine, then I have no interest in dealing with them.

Remote Programming

On-Board Programming - In the early days of remotes, almost all of them were programmed using on-board procedures.  Today, on-board programming is history.  But that doesn’t mean that you will never need to use on-board procedures.  In many cases, you can find onboard procedures on the Internet, but beware of what you find.  There is a ton of inaccurate or even malicious information out there. 

An excellent source of on-board programming information used to be the “Autodata Key and Remote Programming” manual (Photo-6).  This book is now out of print, and as far as I can tell, the last edition was published in 2014.  Used copies are still available on eBay and similar sites, and if you can find one at a reasonable price, you might want to pick it up.  I am using a 2012 edition, and before that I had a 2008 edition.  (Frankly, there is very little difference between the 2012 book and the 2008 book.)  But if you think that you will be dealing with older vehicles, this book is indispensable.

Diagnostic Tool Programming – Programming a remote for most vehicles will require a diagnostic tool that plugs into the OBD II port under the dash.  If you are already programming transponder keys, you probably already have a diagnostic tool capable of programming a wide variety of remotes.  For the last few years, I have been using my MVP Pro (Photo-7) for most of my remote programming.  The new Smart-Pro, (Photo-8) which is the replacement for the MVP Pro, has the same capability, plus updated software for the newest vehicles.  Unlike transponder key programming, remote programming does not require the use of a “Token,” so these machines are an extremely cost-effective way to program remotes – especially if you already have one.

Other popular machines that automotive locksmiths use for programming remotes include:

  • The Hotwire from Keyless Ride – A PC based system for programming remotes and transponder keys.  (Photo-9)
  • The SmartBox – This is a stand-alone programmer that not only programs remotes and transponder keys, but also can be used to test remote functions and as a cloner.  (Photo-10)
  • The Autek ikey820 – This is another stand-alone programmer that can program many remotes and transponder keys.  (Photo-11)
  • The AutoProPad from XTool – This device is available in three different configurations; the AutoProPad Full Version, The AutoProPad Lite version, and the AutoProPad Basic version.  All three versions are capable of programming many vehicle remotes.  The choice of which version to use should be based on your market and what else you plan on doing with the machine in addition to remotes.  (Photo-12)

There are many more machines out there, and I highly recommend that you do your own research to choose the best device for you and your market.

New / Refurbished / Aftermarket Remotes

There are also choices as to the types of remotes that you will be selling.  Personally, I use almost nothing but OEM remotes, either new or refurbished.  Once again, your provider of choice will have a lot to do with the types of remotes that you will be selling.  I have had very mixed results with aftermarket remotes, but the few aftermarket remotes that I do use are purchased from my normal suppliers who will stand behind them if I have problems.  I have five “no-logo” Nissan prox fobs that I picked up at a trade show.  I have attempted to program each one with zero success.  I keep them around to remind me that you may not always get what you pay for, but you always pay for what you get.

My success rate with refurbished remotes, purchased from dealers that I trust, has been good enough that I offer my customers a “one-year warranty – unless they take them swimming.”  Yes, I have had a few that didn’t work, or came back after a few weeks or months, but very few.  And in each case, my distributor has replaced the remotes with no problem.  When I sell refurbished remotes, I make it clear to my customers that they are buying a refurbished product, and I often give them the option, and the price, for a “New” remote.  So far, I haven’t had a single customer spring for the “New” remote over a refurbished one.

Some new remotes are priced so low that there is no point in wasting time with refurbished remotes.  The GM flip-keys from Strattec (Photo-13) are a prime example.  The price point on those is low enough that I wonder why anyone uses anything else.  In addition, I have found that I can mark up the “New” remotes enough that I actually have a higher margin on the new remotes than the refurbished.  Another example is the Honda IRKs.  (Photo-14) I do sell a lot of the refurbished ones, but if a customer needs one in a hurry that I don’t have in stock, I don’t hesitate to go pick one up from the dealer.  My price there is only slightly higher than what I pay for a refurbished IRK, and I don’t have to pay for shipping.

Another exception to the rule is the older Ford remotes.  (Photo-15)   For decades Ford, Lincoln, and Mercury vehicles used the same two remotes; either a 4-button remote for vehicles with a trunk or hatch, or a 3-button remote for vehicles without a trunk such as pick-up trucks.  The aftermarket versions of the remotes are so cheap and reliable that I keep a bag of each in my truck to sell as add-on sales when I unlock a Ford product.  In this case, the aftermarket remotes that I use are actually superior to the OEM remotes, in that they will replace two or three different FCC IDs with one remote.

Another exception with the older Ford remotes is that they can usually be programmed with an on-board procedure that only requires a few seconds of my time.  There is one basic procedure and several variations of that procedure used on only a few vehicles.  I have done so many of the Ford remotes with on-board procedures that I could probably program them in my sleep.

Shell Keys

“Shell Keys” are available for the IRKs and RHKs that most commonly break.  (Photo-16) The average cost for a shell key is under $10 and I normally get $50 - $60 for each one that I sell.  Some IRKs break so easily and so often that International Key Supply ( has now introduced a line of shell keys that are an improvement over the OEM keys known as Durashell keys (sometimes listed as D-Shell).  (Photo-17) The price for these improved shell keys is about the same as any other shell key and I have sold off all my OEM style shell keys and now sell only the Durashell line.  Some of the improvements in the Durashell keys are the use of slightly thicker, but much more durable plastic, and the elimination of most of those tiny screws that either strip out or corrode into place.  With most Durashell keys, the battery in the remote can be changed without the need to remove a screw.  Durashell keys are now available from most major automotive locksmith suppliers.

Below are some of the IRKs that are most prone to breakage (Durashell replacements are available for all of these):

  • Honda 3 and 4-button IRKs
  • Toyota / Scion 3 and 4-button IRKs
  • Lexus 3-button IRKs
  • Mitsubishi 3 and 4-button IRKs
  • Chrysler IRKs

While standing in check-out lines, I often see IRKs that have been taped or glued back together in people’s hands or hanging off of their purse.  Once I saw a Lexus key that was being held together by a couple of Band-Aids with cartoon characters on them!  I try to keep a few business cards in my pocket for such occasions, and it has paid off well.

People Who Bring Their Own Eggs to a Restaurant

Many years ago, a service station that I worked at had a sign in the shop with two cartoons on it.  One of the cartoons was of a guy running into a restaurant with a dozen eggs and asking, “How much of a discount do I get for bringing my own eggs.”  The second cartoon was the same, but he was at a garage and carrying a muffler instead of eggs.  The text between the two cartoons read “You wouldn’t do it there, so why would you do it here?”  I can’t help but think of that sign when people bring me some cheap remote or IRK that they bought over the internet.  In fact, I have actually asked some of these people “How much of a discount do you get at Waffle House when you bring your own eggs?”  Sadly, that line has never gone over well

Now, when someone wants me to cut and/or program a remote, IRK, or key that they bought somewhere else, I give them a little speech that I could probably recite in my sleep.  I tell them that I will be happy to do what they ask, but that I have a “flat rate of $45 for hooking up the machine.”  (I change that to $100 for prox keys, because I may have to burn a token.)  I then emphasize that “I cannot be responsible if your device is either not the right one for your car or will not program.”  I also tell them that I will try to make sure that their device is correct before I hook up the tool, but that the price is a flat rate regardless of whether or not the programming is successful.  I then sugar-coat it a bit by adding that “The good news is that there is no sales tax since you provided the materials.”

I also tell them that I can provide an OEM product, with a one-year warranty at about half to one third of what the dealers charge.  Sometimes, I go into horror stories about some of the junk that people have brought me.  About half of the Internet sourced remotes that I attempt to program actually work.  Many people, especially if they have not yet purchased the product online, will go ahead and buy a real remote from me.  A few people get mad and hang up the phone, but that suits me just fine.

In the end, my new approach seems to be working better than my old approach.  I often gain new satisfied customers, and I also earn a couple hundred bucks a month of pure profit by programming stuff that doesn’t cost me a cent.  But more importantly, I gain satisfied customers that often come back to me when they need my services, and refer me to their friends.

The Bottom Line

There is a lot of money to be made in remotes, and as long as this article is, it still left a lot of topics untouched.  But, if you are willing to take the time to learn the basics, invest in tools and inventory, and promote your business, you really can compete successfully with the automotive dealers.  It’s all up to you.