PeachParts Mercedes-Benz Forum - View Single Post

stevebfl · #10 07-17-2004, 06:15 PM

As I read the first lines I knew my reply, but you trumped me by saying it first: sounds just like the medical community.

If you go back to my first reply you might find that even your good advise is often wrong. In my first reply I noted the number of jobs that can no longer be done economically even in Gainesville.

As to your parts mark-up, you are mostly wrong. Even the mass markters like M*d*s usually only double list price. I can say from numerous invoices that they straight double list price. If I straight doubled list price on a brake rotor I would have added more than 300%, BUT what your have to understand about these terribly inefficient shops is that they haven't a clue as to where they should buy their parts. In most cases they probably went to the MB dealer who knowing them as turds sticks them with a whodo price that they then double.

So, where it is posible to get stuck with a parts price that is 300% more than decent wholesale, the pigs that do this are so stupid that they aren't really getting 300% more than they paid for it.

I have a old friend. He worked for me for a couple years about 25 years ago. He moved to Santa Monica and had a one man shop there for many years. He closed it down a couple years ago and moved back to Florida. He got a job in one of those tire stores and we were talking one day. His job was as a service writer. He told me about how easy his job was in calculating an estimate. All he had to do was find out his parts total cost and multiply it by 4.5 and that was the total bill. That is a different world from shops as I know them.

Shops as I know them have techs that make from 30,000 to 90,000 a year and get get about cost plus 100% on parts. My own business averages cost plus 65%. This is because I never charge more than MB suggested list price and many of my parts come from the dealer where I only charge cost plus 35%.

Mine is an efficient shop that handles two of the three points well. The only one that suffers is ownership profit. It is not on the scale a business major would tell one should expect to receive from a small business investment. If I were to get the cost plus 100% for parts that most of industry expects I would finish that third level, but probably infringe on the first level. My stuff is paid for and I don't like accountants anyway, so I do have a different picture but as I was saying, every years another job that we have done a lot of disappears as people realize the economics of the situation.

The point of me telling all this is so that maybe you will understand that even after they gouge you they probably still don't make a descent living. Most of the good techs I know don't work for the money and would tell you right off if they knew then what they know now they would have taken their smarts to a trade that gave them a degree of respect and a decent living.

The real problem with shops is that no fool would invest what I have invested for the return I get. My business and uncle sam have paid off over a million dollars worth of real estate and tooling. The tooling is at .5m and the real estate at over 1m. The tooling is paid for an the last parcel of real estate has got 6 years to go. When I make the decision to rent my building for more than I take home as a paycheck a small part of a different era will die. I already take in more money from rent than I take home each week as a paycheck. The part of the rent that comes from where Continental Imports exists is not rented to its fullest as I have to pay sales taxes on it. If I rented it for market value (as a warehouse) my partner and I would take a small cut in pay to continue paying ourselfs and the mortage. In six years we may change our minds. I really love what I do with cars but dealing with the disrespect of the public will be the reason I leave it.

BTW the shops I have talked to recently that had their top techs over 90k were located in metro centers : Miami, Washington DC and Belleview Washington (home of Bill G). Two of my techs make almost 60k. The others go from 35 to 50k. All of these shops are what you should be hoping for and the point I'm making is they are passing through the point in time where what they do is no longer economically feasible. The guy in Belleview is in his thirties, I really pity him.