True Costs of Contamination- REBOOT 183

SHOW NOTES:

Keeping It Kleen Series – Part 2: The True Costs of Contamination

Most shop owners know paint contamination costs money.

What many don't realize is just how much.

In this return episode of the Mind Wrench Podcast's Keeping It Kleen series, we're taking a hard look at the true financial impact of paint contamination, dirt nibs, fisheyes, and paint rework. While many shops view an occasional redo as "part of the business," the numbers tell a very different story.

Drawing from decades of experience in the paint industry, along with research and real-world shop examples, I reveal the never-before seen, hidden costs that contamination creates every day. We explore how the industry has evolved from lacquer and enamel finishes to today's highly refined basecoat-clearcoat systems, and why customer expectations have never been higher.

More importantly, we quantify where the money is really being lost. From wasted paint and materials to increased gas and electrical usage, lost production opportunities, and even reduced technician earnings, the costs add up faster than most shop owners realize. In fact, using conservative assumptions, just a couple of paint redos per month can cost a shop well over $120,000 per year.

The biggest surprise? It's not the paint materials. It's the lost booth cycles and production capacity that quietly drain profitability month after month.

If you're serious about reducing waste, improving efficiency, and increasing profits, this episode will change the way you look at paint contamination forever.

Key Takeaways:

🔹 Paint contamination costs far more than materials—the largest losses often come from reduced production and lost booth capacity.

🔹 Even a small amount of monthly rework can quietly cost a shop tens of thousands of dollars each year.

🔹 Understanding the true cost of contamination is the first step toward improving quality, profitability, and overall shop performance.

 If this episode opened your eyes to the true cost of contamination, do me a favor and share it with another shop owner, manager, estimator, or paint technician. The more we understand the hidden costs of rework, the more profitable and efficient our industry becomes. And be sure to join me next week for the final episode in the Keeping It Kleen series, where we'll discuss the Value of Preventative Maintenance and why some of the best investments you can make are the ones that prevent problems before they ever happen. 

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Transcript

Keeping It Clean Series Setup

Rick 0:00

And welcome back to my new series called Keeping It Clean, where I break down all the aspects of what really creates paint department rework, the main sources of dirt and contamination, how to minimize them, and the real costs of rework from all perspectives. And lastly, what a good preventative maintenance program has on reducing repaints and extending the life cycle of booth equipment, all captured in short, bite-sized episodes. Well, hopefully you've already checked out my first episode in this series, Root Sources of Contamination, and maybe I was able to open your eyes a bit on where all that junk and your beautiful paint work really comes from. If you missed that one, I would highly suggest you go back and listen to that episode first before you start on this one. It'll definitely make a whole lot more sense. This week we're going to do a deep dive into the costs of repainting a vehicle due to the avoidable dirt and fish eyes most painters have to contend with. And I would think most will be absolutely shocked at how much money is really involved here. Not just for the shop ownership either, it's for the paint technicians as well. Welcome to the Mind Wrench Podcast with your host, Rick Selover, where minor adjustments produce major improvements in mindset, personal growth, and success. This is the place to be every Monday, where we make small improvements and take positive actions in our business and personal lives that will make a major impact in our success, next level growth, and quality of life. Hey, what's up everybody? Welcome to the Mind wrench Podcast. I'm your host, Rick Selover. Thanks so much for stopping in. If you're a returning listener and haven't done so already, please take a minute and click the follow or subscribe button and then rate and review the show. When you rate and review the show, the algorithms for Apple, Spotify, Google Podcasts, iHeartRadio, Amazon Music, and all the other platforms will see that it's valuable and show it to more people that have never seen it before. And hopefully it can help them too. I would really, really, really appreciate your help sharing this word with your friends and family as well. And if you're a brand new listener, welcome. I hope you find something of value here that helps you in your personal or professional life as well. Please make sure to click the subscribe or follow button so you never miss another episode.

The Cost Of Contamination Study

Rick 2:17

A couple of years ago, I conducted an extensive study that uncovered something most collision repair facilities never fully measure, the significant financial impact of paint contamination and rework. What I found was eye-opening. Every month shops are losing thousands of dollars to preventable defects, redos, wasted materials, lost production time, and reduced profitability. The findings led me to create a presentation called The Cost of Contamination, which I've had the opportunity to share at several industry conferences and through published articles over the past few years. In that presentation, I cover three critical areas the root sources of contamination, the true cost of contamination, the value of preventative maintenance. To help spread this message, I also recorded a three part Mind Wrench podcast series that takes a deeper dive into each of these topics. The reality is I feel like I've only scratched the surface. This information has the potential to help shop owners, managers, and paint technicians improve quality, increase profitability, and eliminate unnecessary waste. That's why over the next few weeks I'm resharing all three episodes. If you find value in this information, please share it with others in the industry who could benefit from hearing it. This week I'm featuring part two of the series Keeping It Clean True Cost of Contamination. I hope this truly opens your eyes to the extensive costs of redos, the amount of money that's literally going up the stacks. And more importantly, I hope it helps you understand exactly how to keep more of your hard-earned profits where they belong. Just as an FYI, I've gone through and edited this information to update the actual costs, as the average RO value and a few other things have gone up since this original episode aired. So glad you're here with me today, and welcome back to my new series called Keeping It Clean, where I break down all the aspects of what really creates paint department rework, the main sources of dirt and contamination, how to minimize them, and the real costs of rework from all perspectives. And lastly, what a good preventative maintenance program has on reducing repaints and extending the life cycle of booth equipment, all captured in short, bite-sized episodes. Well, hopefully you've already checked out my first episode in this series, Root Sources of Contamination, and maybe I was able to open your eyes a bit on where all that junk and your beautiful paintwork really comes from. If you missed that one, I would highly suggest you go back and listen to that episode first before you start on this one. It'll definitely make a whole lot more sense. If you did already check it out, number one, I hope it made sense to you, and number two, welcome back to the second episode of the series. This week we're going to do a deep dive into the costs of repainting a vehicle due to the avoidable dirt and fish eyes most painters have to contend with. And I would think most will be absolutely shocked at how much money is really involved here. Not just for the shop ownership either, it's for the paint technicians as well. Once again, when doing my research for this realistic expose on the absolute time suck and money wasted on rework, I tapped into not only my experience of living through this daily nightmare as a paint tech, but my 30 plus years as a jobber, visiting hundreds of shops every year, witnessing their battles, but used information gained from previously interviewed key people from the top booth manufacturers as well, their distributors that install and service and provide preventive maintenance for those booths, several uh paint manufacturers' reps, and some industry tech reps that deal with finding solutions for customers every single day. Refinished instructors and some shop owners themselves. Now, before I start laying down the results of my dirt survey and spitting out some amazing numbers that impact a shop owner's bottom line every month in a very negative way, as well as the paint tech's ability to maximize their income. And it may cause you to think, is this guy nuts? Does he even know what he's talking about? Well, let me assure you, I do know what I'm talking about. But I think it'd be helpful to give you a little bit of my perspective first.

How Paint Tech And Expectations Changed

Rick 6:21

The time frame that I first started my paint career in the mid to late 70s, acrylic lacquer was the predominant paint type used in most body shops, followed closely by the acrylic enamels in the late 70s. Now dirt was not so much a focus of concern in the lacquer finishes because after you pounded on four to five coats of color, another four to five coats of clear, right there in the middle of the shop with maybe an exhaust fan on. Because in the shops back then, uh the booth, if you had one, was kind of reserved for the enamel job or the complete repaints. Um, you're gonna end up spending the next day wet sanding and rubbing those jobs anyways. I'll point out here the customer expectations of what the finished product looked like really consisted basically of if the panels were straight, the new bumper wasn't crooked, color looked okay, that was good enough. Customers did not nitpick the dirt in the paint back then. Now regular acrylic enamel jobs became commonplace, and but you couldn't rub out a metallic enamel paint job without affecting the metallics. So actually trying to keep the job clean suddenly became important. A little while later, uh paint companies started offering enamel clear coats to apply over lacquer base coats as well as over enamel metallics, and it was definitely better for providing a finish. You didn't have to wet wet sand and rub every inch of the panel. But the enamel clears were a little bit more challenging to nub and rub. Those jobs could not, at least they weren't supposed to be sprayed outside of the booth, wink wink, nod nod, uh, due to the isocyods using the hardeners. But a lot of people didn't really realize that back then and just did it anyways. Uh during the early to mid-80s, as better, more durable finishes like base coat, clear coat, urethane jobs became more commonplace, that's when the real never-ending battle for a clean job began. I couldn't count the number of shops that had a rub guy full time, someone that the shop paid for or shared cost with the painter, and his job was to do nothing but sand and rub every single car that came out of that booth. Most booths at that time were cross draft, but the new downdrafts were starting to hit the market and brought along not only the option of baking the clear for a quicker finish, but a better controlled spraying atmosphere. But everybody seemed to struggle to get a job out of that booth and over the curb without a substantial amount of sanding and rubbing still. With the advent of urethane base coat clear coat finishes, the paint jobs from the factory were increasingly getting much nicer, more brilliant and higher gloss, uh, the customer expectations also increased, as did the cost of a new vehicle.

Coaching Offer And Why It Matters

Rick 8:55

If you're looking for a competitive edge for your business or a more effective jumpstart to your personal development in 2024, I'll make your first step super simple. It is a fact that an incredible number of the most successful business owners, nearly half of the Fortune 500 companies, top-earning professional athletes, entertainers, and industry leaders like Microsoft's Bill Gates, former President Bill Clinton, Richard Branson, Amazon's Jeff Bezos, and Salesforce Mark Benioff, all have one thing in common. They all have at least one coach, and some have several, that they work with on a consistent basis. Someone that helps guide, mentor, and support them, challenge them, help them set and achieve goals that move them forward, and then hold them accountable to follow through, driving personal and professional growth. Working with a coach has many substantial benefits. Just for an example, 80% of coaching clients report improved self-esteem or self-confidence thanks to coaching. 99% of individuals and companies that hire a coach report being very satisfied, and 96% would do it again. If deep down you know it's time to make those improvements in your business, your personal life that you've kicked down the road year after year, if you're tired of knowing there's a better version of you waiting to shine, but unsure of how to bring that version to light. If you're tired of wanting to enjoy a more successful business, but not sure how to start, and if you don't want to go another 12 months without better results, but you don't want to go it alone, then take the first step. It's super simple. Sometimes talking to the right person can make all the difference. Go to www.rixlover.com/slash contact, and I'll set you up with a free consultation call with me to see if one-on-one coaching is right for you.

Why Shops Still Sand And Rub

Rick 10:36

Now here we are, a few decades later, and it seems we're still fighting the same battle against dirt. Even though booth and spray technology is advanced, masking materials are also vastly improved since then. Nobody's covering the car with rows and rows of green 36 inch paper anymore. Yet the vast majority of shops are still rubbing almost every one of the jobs to some degree. Did I mention how much I hate sanding and rubbing? Oh god. Well I did, with a passion. I'd rather lay on the ground sanding chips out of a rocker than standing over a hood sanding and polishing, trying to get that dirt out. Only to have to go and re-sand or repaint that job after all. Anyways, what's often not really taken into account was the actual cost of redoing your paintwork. The numbers add up pretty quickly, as a matter of fact. I've asked several shop owners over the years if they knew what that redo cost them that I was looking at. Most of them do not. They usually ask their paint or job or rep to help them with that. And there's a few that would just grab the RO, look at the paint material reimbursement line, and say, Yeah, it looks like I lost two hundred and fifty dollars in paint materials in this one. Well, it's not really correct. Uh there's always a loss on paint materials, but that's not it. And there's much more to it than that. So I recently did a deep dive into those losses, crunched the numbers, and the results were pretty startling.

The Four Buckets Of Redo Loss

Rick 11:55

So let's break down our losses into a couple of different categories. Paint material loss, utilities loss, production loss, and employee retention loss. Yep, this one counts too. All these calculations are based on a national average RO value of $5,147. An average of ten paint labor hours on that RO value, and a labor rate of about $55 an hour, and a low average of only two redoes per month. So here we go. Number one, cost of paint material loss. Now when you have to redo a paint job, uh you do lose on paint materials, but you're only losing what your actual cost was on those materials. You know, after discounts, rebates, statement discounts, cash investments, if any, on a paint contract. Not what you would collect from the customer of the insurance. That's sales. That's got your markup in there. Now obviously it's hard to give an average number because of the variety of scenarios. The only one true way to measure is by what an industry standard cost percentage would be for your paint. And also what the materials cost percentage would be as well. The paint companies have these numbers dialed in for years. A good collision center today, uh their paint cost as a percentage of sales would be about 3.9%. If you're much higher than that, then you've got some other areas of concern you need to address as well. Your materials cost as a percent of sales would be about 1.7%. These would be best verified by either your paint company, your servicing jobber, or a business coach or consultant. All said, your loss in paint materials with these two parameters and two redoes per month, approximately eight hundred and twelve dollars. Which includes two days of rental at $59 a day as well. Because if you have somebody's car in for uh a job, then you have to stop and repaint it. Um you're probably gonna have to pay for the rental one way or the other. So number two, the cost of wasted utilities. Here's another cost that is incurred and should be accounted for under redo, but it's a hard number to qualify. As the cost of gas and electric varies widely across the US, shop owners that understand and review their PLs monthly, they know what their utilities costs are, and they do know a redo c you know adds to that cost, but they have no easy way to calculate it. That's right, there is no easy way. But I took that as a challenge, did some research, and here's what I discovered. Now, based on some booth energy consumption stats I acquired from a booth manufacturer and some national utilities costs, I was able to come up with some data uh that would be helpful. And I was surprised these numbers weren't higher, to be perfectly honest. So the national average cost for electricity is about 19.4 cents per kilowatt hour. The national average cost for natural gas uh is about one dollar and forty cents per therm. And average booth runtime, including spraying, flashing, uh baking, cool down, was about one point four hours uh per average RO. So without boring you with all the math involved, the average additional energy cost per redo was about $17.30. And based on two average redoes per month, that's $34, let's just call it $35 in wasted energy costs. I know it doesn't seem like it's worth worrying about, but if you think of it this way, it's an additional five dollars off your bottom line for every 30 minutes your booth runs. And that's whether you're doing a job or not. So keep that in mind.

The Big Hit From Lost Production

Rick 15:29

Number three, the cost of loss production. Now, this would be your highest impact loss to your business, bar or none, unless you only produce one booth cycle a day or less. If that's the case, you got some bigger concerns to worry about, right? Loss production is simply this you lose the ability to run another boost cycle on a paying RO because you're using that boost cycle to redo a paint job a second time for free. Once again, using the sample RO value of five thousand one hundred forty-seven dollars and two redoes a month, you will lose ten thousand two hundred and ninety-four dollars per month in loss production. So let's add all this together to really get an honest look at how those two little redoos impact your business and your bottom line. So let's add all that together to really get an honest look at how those two little redues impact your business and your bottom line. PM loss equals eight hundred and twelve dollars, utilities loss equals thirty-five dollars, production loss equals ten thousand two hundred and ninety-four dollars. Total equals eleven thousand one hundred forty one dollars per month. That's a whopping one hundred thirty-three thousand six hundred and ninety-two dollars per year. I know, that's a big number, right? So you might be thinking, ah, that sounds like bullshit, Rick. I I almost never have to redo paintwork. Probably less than one per month. Well, if you're being honest with me and being honest with yourself, and that's correct, then let's just cut that in half. Just one redo a month still equals five thousand to five hundred and seventy dollars per month, or sixty-six thousand eight hundred forty dollars per year. Not really something to ignore, is it? No.

Painter Income Loss And Wrap Up

Rick 17:06

Lastly, there's another cost that nobody talks about, but it is critical to at least one person, your paint tech, and it should be important to the shop ownership as well. And that is the cost of lost paint tech income. Now lost paint tech income is is income the painter misses out on while repainting a job for the second time for free, based on that $5,147 RO. That would have approximately 10 hours of paint labor at a national average of $22 per flat rate hour, they would lose out on $220 of new paint labor, as well as $77 of lost available working time. So I came up with that. Um you got $1.4 hours of booth process time, which is all the time you'd spend in the booth, final mask, wipe down, tack, spraying, base coat, clear coat, uh flash times, baking time, and cooldown time. So that equals $297 lost per redo. Annualized out is $3,500. Now most painters know that they're losing their ass every time they redo a job, but most of them, if not all of them, probably don't even know how they would figure that out, right? Well, this is as close as I could come. Obviously, it's gonna vary. Um, you know, these are averages based on a few numbers. Your local numbers are gonna vary, your average RO is gonna vary. But the point is this there's a great financial loss attributed to repainting a job due to avoidable contamination. Even if your shop only experienced a lower percentage of these redo costs, wouldn't you still want to reduce those costs as much as possible? I know I would. And so would many other shop owners I know. So that's all I got for you today. Uh, and hopefully this um gives you a pretty good view of what those costs look like. Be sure to tune back in for the next episode where we dive into what preventative maintenance is and how it not only helps mitigate these costs, but also protects your very expensive equipment. Hopefully, this little series and these episodes are helping you gain a better understanding on uh what's involved with uh redoes and what that cost is and how much it impacts your business and why it's so important to really work on minimizing these costs. We'll wrap this series up next episode with preventative maintenance and what it does to help you minimize these costs and protect your equipment. Well, that's all I had for you today. Thanks again for tuning in. I really appreciate your support and I hope you have a great week. I can always be reached at www.ricksilover.com, or you can find all my social media links, podcast episodes, blog posts, and much more.