Revenue In Remotes

Not all that long ago, cell phones were a novelty, or a toy for the wealthy. Today, they are a necessity of daily life. In the same way, vehicle remotes have become essential to most drivers. A generation has grown up taking them for granted to the point that they have no idea how to unlock their car if the battery in either the fob or the car is dead.

Some may think that last sentence to be an exaggeration, but within the last month, I have gone on two service calls that stemmed from that exact situation. In one case, the owner claimed that when she bought the car, she did not get a door key, and had always relied on the fob. It was a Nissan, and at some point in time a previous owner had replaced the ignition lock, and it never occurred to the new owner to try the key in the door until the battery in the fob died.

The second case was a Toyota RAV4 driven by a high school student. One morning, she simply could not get into her car. The fob didn’t work, and her key would not turn in the door lock. I arrived and unlocked the vehicle to discover that the headlights had been left on and the car battery was stone dead. At first, I assumed that the ignition lock had been changed at some point. But after removing the door lock and making a key from code, it turned out that the only key she had was so worn that it would not operate the door lock, but still worked in the ignition easily. The ignition lock was just as worn as the ignition key, but the door lock looked like it had never been used.

In short, vehicle remotes are no longer a convenience, but have become a necessity. Most vehicle manufacturers were quick to realize that remotes could be a big revenue stream and the manufacturers have taken deliberate steps intended to drive all replacement remote sales back to the dealers. As I tell my customers, the manufacturers change the frequencies and functions of the remotes “like most people change their socks,” just to make it difficult for anyone other than the dealers to compete.

That strategy, like most strategies, had unintended consequences. The unnecessary complexity of the system has added literally thousands of new part number to the dealer’s inventory. And, as a the vehicles age, demand for remotes for older vehicles drops off, often leaving dealers with shelves full of obsolete remotes, while they are being forced to carry more and more remotes for the current crop of vehicles. The end result is that many dealerships have stopped stocking all but the most common remotes, making all other remotes “special order” items.

So here we are almost 20 years into the 21st century and vehicle manufacturers have managed to make vehicle remotes a “necessity.” They have intentionally set the market up so that they control it, but the system that they have set up, keeps them from being able to satisfy the demand for the product. On top of that, they charge exorbitant prices and make the customer wait for days for the product. And then, as a final insult, there is the “programming.” They make you schedule an appointment on their terms, keep your car for hours while you either arrange other transportation, or sit captive in the waiting room.

How can locksmiths hope to compete in this market? Actually, it’s pretty easy, but there are many things that you need to know before you jump into the market.

Understanding the Product

The specifications for individual remotes change constantly. In order to compete, you will first need to be able to “speak the language” of remote technology. Below are some of the basic principles that you will need to know.

Fixed Code Remotes – These are essentially the first generation of remotes, and are virtually obsolete now. When you push a particular button on a fixed code remote, it always transmits the same data. Once the vehicle is programmed to work with a particular remote, it “learns” the individual commands for that remote. This means that the door will unlock every time the car detects a particular 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.

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 very similar to a fixed code system, except that the data-stream transmitted by the remote for a particular 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 to expect to receive those codes. For example, a particular 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 more or less scrapped within a few years, making them almost 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 just 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 of 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 the correct FCC ID Number remote 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 not actually associated with 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 and for the attachment point to the keyring either breaking or wearing 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) – 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, many 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 (Prox Fobs) – These are the current rage among vehicle manufacturers. (Photo 5) A proximity fob allows the owners to enter and start the vehicle without ever having to remove 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 or fobs. Most people keep their prox fobs attached to their keyring, but a fair number of vehicle owners choose keep their fobs separate from their keys. I have been called out to replace several prox fobs that have been flushed down the toilet by children, and I recently replaced a fob for a Prius that somehow 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

Most dealers only stock remotes for current vehicles, leaving the market for vehicles that are a few years old wide open. Dealers are not open on nights and weekends when the majority of keys, fobs, IRKs, and prox fobs are lost or stolen. Dealers will generally 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. In addition, we also have to understand our individual markets well enough to stock only the products that we can reasonably expect to sell. Many locksmiths have failed in this market simply because they tried to stock too much and tied up too much money in an inventory that collected dust.

Of course, if you are going to go into the business of providing remotes, you are going to need a reliable provider 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, there are a number of 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 county you are in and your individual market. I have one hard and fast rule; 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 fading into history like VHS tapes. 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. If you think that you will be dealing with older vehicles, this book can be indispensable.

Diagnostic Tool Programming – Programming a remote for most late model vehicles will require a diagnostic tool that normally 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. Personally, I use my MVP Pro (Photo 7) for most of my remote programming. Unlike transponder key programming, remote programming does not require the use of a “Token” so it’s an extremely cost effective machine to use for remotes. (If you have already upgraded to the new Smart Pro, it should perform the same functions.)

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 8) https://www.keylessride.com/hotwire/
• 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 9) http://smartboxauto.com/
• The Autek ikey820 – This is another stand-alone programmer that can program many remotes and transponder keys. (Photo 10) https://www.facebook.com/autekofficial

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

New Remotes / Refurbished Remotes / 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. In my desk, I have five “no-logo” Nissan prox fobs that I picked up at a trade show. I have attempted to program each and every 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. I do try to make it clear to my customers that they are buying a refurbished product, and so far no one has insisted on a “New” remote.

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 11) are a prime example. 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 12) I do sell a lot of the refurbished ones, but if a customer needs one 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 13) For decades Ford, Lincoln, and Mercury vehicles used the same two remotes; either a four-button remote for vehicles with a trunk or hatch, or a three-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 are programed 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 that most commonly break. (Photo 14) 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 (https://www.internationalkeysupply.com/collections/durashell) has now introduced a line of shell keys that are an improvement over the OEM keys known as Durashell keys. (Photo 15) The price for these improved shell keys is about the same as any other shell key and I am currently in the process of selling off all of my OEM style shell keys to stock only the Durashell line. Some of the improvements of 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 obviously been taped or glued back together. 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?” So far, 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 on my MVP.) 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. About half of the ones that I attempt to program actually work. Many people, especially if they have not actually 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 several hundred bucks a month 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, because I didn’t come off as a smartass.

The Bottom Line: There is a lot of money to be made in remotes. 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.