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OK, here’s one to ponder – how it COULD work?
The year is 2006……
Get home, have dinner, chase the kids into bed, log onto my universal font of knowledge – UKW.
Tomorrow shows 2 calls for DCLS, 3 for NNES, 2 eJobs and a repeat for a private customer. So, 7 so far, room for the odd “on the day” call.
Tomorrow comes, hit “print” and off we go. I can attend the the WP calls secure in the knowledge that the van is carrying the top 25 spares lines for the current in-warranty WP calls, kindly provided for my use by the Manufacturer. I deal with these as they come, knowing that restock will come shortly after filing parts usage this evening – and I’ve earned my £50 by doing the job. These parts, by the way, are registered stock to my company and I don’t pay for them, just register their use. Cuts out so much paperwork…….
The Office has spoken to the 2 eJobs, so the blockage is no problem on the first one, and surprisingly enough we have the right door lock on board for the second one (Memo to self – order another one).
Granny Smith is the Private call, and the old Logic really has had its day this time. Shall I get you a decent replacement? Yes please dear, you’re not drinking your tea.
Due to the deal that Quat, Derwent and RoughTerrain struck in 2005, I can produce a few facts, figures and prices and Granny agrees.
Tonight, I get home, have dinner, chase the kids into bed and log into my font of all knowledge – UKW. Fill in the pre-set forms for the WP work, order up the new washer for Granny Smith, update a couple of private records, and then indulge in some problem solving, humour and personal abuse involving a certain Moderator from Hants, before retiring to the Local for a jar. Or 2. Well, 4 would be better – it is Taylor’s Landlord after all…
Here endeth the lesson.
Looking back with a warm glow, 2005 proved to be a seminal year for the Independent trade. UKW membership soared and with the DASA alliance forged into the oversight body it should always have been, things came together. The attendance of Merloni, Whirlpool and Gias management at UKW5 proved the intent of UKW and allowed the creation of the “held spares” situation which changed the face of the business. Centralised “Jobs” developed from the old “eJobs” software and gave UKW an unrivalled nerve centre for fast response and accountability unrivalled in any service industry.
UKW5 had historic overtones – RoughTerrains now statutory 2 fingered salute was delivered to the Chairman of Merloni (UK) in the spirit in which is usually intended, and the ensuing black eye responded well to a raw steak (Italians…). Derwent went on to fully demonstrate the defenestration(*) of Leeds, mercifully through a groundfloor bedroom window. Now typing a little slower, with more typos than usual, the cast should be removed any day now. Quat, having brokered a £50mil/year deal, told all that he didn’t care – this was STILL not his bedroom.
A certain HerringMuncher was last seen behind the bar attempting to fix the Ice Maker (not for the drinks you understand…..).
Ponder, laugh, enjoy – act?!
Chris.* Defenestration – the act (voluntary or involuntarily) of leaving via a window.
Re: A Vision of the Future?
Another blinder from the flightless one….. 😆
:rotfl: Roll on UKW5 :rotfl:
MartinRe: A Vision of the Future?
I pondered, laughed and enjoyed 😀
Not a vision too far removed from reality IMO
Re: A Vision of the Future?
I bet you all thought I’d forgot this little thread hadn’t you? 😉
I read, re-read and read again P’s post trying to decide how much was humour, how much was hope and how much was an exrapolation of what has already occurred. you see, you have to remember that whilst seemingly benign, those damned penguins are resilient little buggers as well as pretty damned cunning. 😉
If only it were true though. If only we could encourage the industry to stop being so stupid and wake up to itself and make many people realise that irrespective of how they regard the independent trade, be it with a spot of contempt or admiration, all we want is to be better. The burning question begged by that is which manufacturers and insurers wish to go forward with that in mind and with an open-minded philosophy?
Thanks, but I’m quite happy in what I do now but I am not averse to change, change is a good thing even when it is for the worse as you learn. I have no wish to become anything other than what I am, I’m just vocal, that’s all. I love the trade and I respect the independent trade and realise that they have a place and a certain power if you like, that has to be respected and protected. To that end I will do what I can for the independent trade, always have, always will. Thankfullly I’m not alone in that endevour as this site shows time after time.
K.
PS if anyone wants to offer me £50M please contact me immediately as I’ll be very well behaved and most attentive. 😉
Thank God. Someone’s paid attention to the FIRST part of this little story.
Right, it may not (probably won’t) pan out that way, but there’s some food for thought here. BER’s are driving everybody potty, because of the price of spares. And you don’t get paid properly. And you don’t supply the replacement appliance. We all KNOW that component prices are a rip-off. If we can make the manufacturers realise that the parts are actually irrelevant to repairing the machine under guarantee or warranty, it’ll work so much better.
What should happen is that we get paid a proper rate to go and fit somebody’s “bit in a brown box” to their appliance. It doesn’t matter WHAT’s in the box (the wholesaler’s in any industry will tell you the same – it’s a unit of profit to them). If we are paid properly, we don’t need a mark up on the part and the whole balance changes.
A motor. £20 to a major manufacturer? Less? Probably. Retail – £100+
And …..VAT
Now then. £50 call charge for you, £20 part to company, plus the dreaded VAT = £82.25. Allowing for the WP charges this should still pan out at under £100.
OR……..
£120 motor + £35 charge + VAT = £182 + WP charges – we’ll write this one off shall we? Oh, and you just earned £17.50. Plus VAT.
THINK ABOUT IT!!!
For Heaven’s sake, the whole system needs changing. If we can point out something this obvious to a company like Hotpoint, whose BER rate can only be described as appalling (Equals falling sales due to loss of Public Confidence), we might get somewhere.
Until manufacturers can get it through their combined thick heads that repairs are not an expense but a customer service and that this might be a reasonable way of reducing their OWN expenses, as well as satisfying customer expectations we will all continue, lemming like, to ultimate self destruction.
Regards,
The Provisional Flipper of Penguin45,
Chris.Re: A Vision of the Future?
Just out of interest.
An out of guarantee Hotpoint machine.
Needs a new motor. 1604822 replaces the old 1601978.
On sale to the trade via a national distributor at £37.49 plus vat. (Which is not that expensive for a new and very reliable motor).
The list price of this motor is £81.60.
Are you going to charge £81.60, plus £35 charge plus vat…. £137.00.
Or are you going to disregard the list price and work on your own mark up, of say 40{e5d1b7155a01ef1f3b9c9968eaba33524ee81600d00d4be2b4d93ac2e58cec2d} on the motor, £62.48 and get the job at a more realistic £114.53 ???
Eh, £35 labour…. I think not, that is totally unrealistic for a chargeable call from most companies that have employees. I won’t even touch new contract work at that.
We charge £50 excl VAT and we’re cheap! putting the repair @ £131.60 excl VAT. The £37.49 only applies if said distributor passes on that saving, many do not and, as has been witnessed on here many, many times discounts to trade accounts vary wildly with some people even being charged retail prices or higher!
What you also have to remember is that we have to, in effect, warranty that spare for a year as trying to return spares that are faulty is virtually impossible, even as an authorised agent. Many distributors have an “no returns” policy as well and this accounts for selling at the retail price to a large degree. However, you also have to remember the double calls we make for “special” spares with virtually no margin at all and, what is there is more than wiped out due to the fact that it is a double call, some of the profit in a repair like this offsets that cost.
Frankly, start quoting customers >£100 on a 2+ year old washer that can be replaced or was purchased for less than £250-300 and you’re sunk, you won’t get the repair for many of them as it is more economical to replace it. Start talking that sort of money for a 5 year old appliance and there’s almost no chance at all, many of them won’t even pay for the call let alone the spares.
Even the insurers now write these off, I’ve spoken to some that don’t even go beyond the word “motor” or “module” they just say, “oh well, we’ll write that one off” as they know it’s not economical to repair.
The reason is simple, the appliances have been grossly devalued over the years and this is the result.
K.
Re: A Vision of the Future?
brian wrote:The list price of this motor is £81.60.Are you going to charge £81.60, plus £35 charge plus vat…. £137.00.
IMHO of course not, I would lose the job at that price. Generally a mark-up of between 40 & 50{e5d1b7155a01ef1f3b9c9968eaba33524ee81600d00d4be2b4d93ac2e58cec2d} for this motor is fair and realistic. I can buy this item from my wholesalers for around £42 so then I sell on to my customer for around £61.
The problem I very often encounter though is that when in a customers house and looking up a part such as this( on the dreaded Partfinder) it only displays the ‘list price’. Quoting directly from that information could well cost me a lost job at £81.60. 🙁 As we can learn from this example, list pricing can be very misleading to say the least.
As a result, I defer my quotation to my customer until I have gone back to the office and shopped around for a decent purchase price from a wholesaler, THEN quote the job 🙂
Who dreams up these ‘LIST PRICES’ anyway ❓
Martin
P.S And my charge locally(as a Sole trader with fierce local competition) within 5 miles of base is : £35 😆 (but then you knew that Brian 😆
Re: A Vision of the Future?
Sorry…yes…I was looking at the £35 charge payable by insurers etc.
And yes….the price of the actual finished good’s is too cheap and makes most repairs un economical…no matter how cheap the spare is.
I would expect to see an increase in the price of finished goods next year due to the increase in raw material costs. (Although a similar increase would have to be passed on to the price components. We have already seen this from a number of manufacturers this year). So no real change !
The list price has to be calculated to cover cost’s etc after the distributors discount from list. Most of the fast moving lines (over 600 for Merloni at the last count) are sold at net prices and prices are “marked up” by distributors. The list price on the CD does not reflect that. Unfortunately if you do not want to quote list for fear of losing the job you have to do as Martin does and go away, check the latest offers, and then quote. Not ideal.
Not sure what the answer is.
As I had posted elswhere Brian a certain manufacturer had a bill for spares of £100,000 from agents and yet the COST to them was less than £3000, does that seem right to you as generally all the manufacturers work to similar margins? Given the actual retail price of the appliances that would seem about right.
Whilst I would expect a spare to be more expensive than a proportional sum based on the price of the appliance I would not and, neither do customers, expect them to be so hiddeously expensive which, regardless of how you slice it, they are. Customers aren’t stupid entirely, they realise that a module costing circa £100 for an appliance that cost them £200-ish is just the manufacturer extracting the Mickey. We are also not stupid and we know that, for example, Askoll pumps are bought in massive bulk for about a £1 a throw, landed. These are then sold on at upwards of 16 times the cost which is a huge margin to have on any product.
To use the example of the motor you gave, I should imagine that that motor would cost in the order or £15 or less to have mass produced so, even selling out at £37-ish it still represents a 150{e5d1b7155a01ef1f3b9c9968eaba33524ee81600d00d4be2b4d93ac2e58cec2d} mark up over cost. A luxurious margin that we can only dream about.
In the end the many of the spares prices are not in any way relational to the cost of the appliance and certainly not to the landed cost of an appliance to a manufacturer then people will pick up on that. The classic examples are pumps, door boots, motors and modules. It’s no one manufacturer that the fault lies with, it’s the entrenched believe in spares departments that they are there to make loads of money and the internal pressures placed on those departments to do so that drives the ethos.
Whilst the spares cost to to the cost of replacement remians the way it is and, in many cases gets worse by increasing spares costs, then the situation will not improve. In fact it may well worsen untill WEEE comes along and bites hard because, eventually, whether the manufacturers like it or not WEEE or something of its ilk will condem, financially, the “throw away society” as governments are determined to halt it. The trouble is that the manufacturing sector, to a large extent, has brought this on itself by increasingly outsourcing to low labour cost countries, degrading the quality of the goods in some aspects and bringing down the “cost to replace” and this is not just a symptom of our industry, it’s just affecting us all badly now.
What I and others are trying to get through to manufacturers is that there is an increasing volume of customers out there that are not out to simply shop on price, they’ve done that and learned the lessons and are now seeking a better quality of product. Fancy features will sell to some extent, like intranet connectivity, until customers and the press in particular cotton onto the fact that it’s not just as useful as once they thought.
The manufacturer’s problem right now is that all the products are stale, there’s been little or no inovation since the advent of Zanussi’s Jetsystem that actually equate to sales other then the normal replacement cycle. So your all competing for a bigger slice of the same pie that is there year in, year out and the only way that many see to do that is through pricing. It’s a classic marketing mistake and one that is bound to lead to casualties in the industry as it already has, just look at the number of brands that have been snapped up in the past 10-15 years.
Enough market analysis for one day.
K.
Very nice post K but:
What are the sayings?
P***ing into the wind! (What you are doing)
Divide and conquer! (What they do to you)
Richard Scanlon Snr
RS wrote:p***ing into the wind! (What you are doing)
Richard,
No not at all in this instance 😛
Brian has a important part to play in this forum and I believe he takes on board all of our comments :tup: After all, he wouldn’t bother to ask the question if he felt we out here were “p**ing in the wind!”
Rather, the truth is, he knows full well that he needs us as we need him and through such dialogue we can ALL enjoy the future in this trade 🙂
“You scratch my back and I will scratch yours!” would be a better aphorism………. 8)
Martin
Re: A Vision of the Future?
Sorry Martin but I stick to my statement; I don’t doubt Brian’s good intent or integrity but I do doubt the company he works for. No disrespect but I do have experience of dealing with things like this in other areas and I got burned so many times wanting to believe the promises that were made. So unless Brian is in a position to issue the orders and actually make it happen my view will stay the same, time alone will tell.
I cannot be bought off by feeble promises or a handful of goodies, I am not as eloquent as you or Ken when it comes to putting into words what I truly feel and I have seen this going on for so many years; you can only negotiate a fair deal from a position power and I’m sorry to say in this area you are lacking the requisite means to do this.
Bit of a sad story this, being repeated again and again! Yet you go on trying to find the peaceful solution to the problem which in itself is very laudable. Communication is the most important thing in situations like this but it needs to a two way street. I have said before in other posts that the manufacturers make more out of selling parts than they do out of selling the whole unit so why would they want to change this? They are not charities and they have shareholders to consider, their aim is to make as much as possible from every available source including you.
If you doubt me just ask the members of this site to post who they are working for and how much they are paid per job, I would bet that when they compare notes there would be many phone calls made about rate differences around the country.
I have read recently of “exciting” things in the pipeline, how “beneficial” to all the recent discussions have been. Now call me cynical if you like but I will bet that in twelve months time very little will have changed and you will still be disgruntled and they will smile and make placating noises next time you have “discussions” and still they win.
So what is the answer? How can you be sure you are not been led down the garden path once again? You can’t; what you could do if you were together on these issues is really negotiate a working relationship with these people, but as you are and will remain, you have no chance. The one organisation that purports to represent our trade in fact represents less than 10 {e5d1b7155a01ef1f3b9c9968eaba33524ee81600d00d4be2b4d93ac2e58cec2d} of independent repairers, and without the support of at least 50{e5d1b7155a01ef1f3b9c9968eaba33524ee81600d00d4be2b4d93ac2e58cec2d} they are powerless to negotiate any kind of deal that would be of any lasting benefit. I am sure that they would try to include everyone but there will be dissenters who, because you are not member will not want to share the benefits gained with their membership fee and I don’t really blame them it’s not particularly cheap.
There are some good dedicated people out there doing their best to try and improve things for this trade and there are those who will only join together if it were to personally benefit them financially, or call them what they are freeloaders, let others do the work so they can reap the benefits.
Lemmings don’t have a choice we do and we should use it
This document represents the views of myself only and is not in collusion with any other parties
Richard Scanlon SnrRe: A Vision of the Future?
Right, we’re all being distracted from the original point here. Brian’s post has acted as a diversion, albeit a very interesting one. To deal briefly with it I would probably ask for around £110 to replace the motor. Does beg the question though, why can’t I just buy an armature for an FHP motor? Seem to recall we could get them for years for a GEC motor… I even have a nifty little tool for taking FHP motors apart (Been building AEG motors for years out of Microprofile motors, but that is another story!).
Let’s try and make the scenario simpler. Merloni are a bit busy, and need some help. The Work Providers alert their network, and off we go. What my post originally suggested was that an Independant goes to job and opens his personal box of the top 25 spares (50 would be better…) for that manufacturer and DOES THE JOB! Happy customer, 2 day service perhaps, good reflection on the Company, fills in the form on-line, top up stock arrives day later. To me it is utterly irrelevant WHAT the part is – it’s yours – I’ll fit it and test it for you, but it is irrelevant because I’M BEING PAID PROPERLY.
Manufacturer benefits because they’re not billing parts out, having them billed back, possibly through two or three parties, all wanting their cut; all that has to be done is pay for the call. Preferably promptly and in full.
It isn’t a difficult concept to grasp.
Private work – well, the customer has already decided not to pay a Company call out, so cost is already an issue. I suspect that it’s a Gimme that in these circumstances part prices will be upped to compensate for the reluctance of the customer to pay labour/call out charges.
Either way, there is a psychological barrier at £100 with washers, which needs either a “sales job” on a decent machine, or the acceptance of a write off on something cheap and nasty.
As I said earlier, we need to rethink the whole way this is supposed to work. We could do a quick analysis of a market research core sample of one – my Mother. Had a Hotpoint twintub in the Sixties; complete disaster, never had a Hotpoint appliance in the house since. That’s 40+ YEARS! People DO hold grudges and WILL boycott what they perceive to be poor quality brands, and ESPECIALLY, poor service.
Regards,
Chris.
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