Recons

[Penguin45]

Further to the “Remploy” thread, a few thoughts on the subject.

The backbone of my business is rental propery work; largely for the student population in this University city. As anyone who has had dealings in this field will know, most of the landlords are averse to getting their hands in their pockets.

However, over the years we are finally getting it through their thick heads that spending an extra £30-40 gets them a Bosch or an AEG which WILL last 5 years and is in fact an economy!

5 x 1st year students can destroy a Hotpoint (or any other cheap brand) inside a year, but this is not the point from the supply point of view.

To recon a Hotpoint, you need to do:
Bearings, spider, tub seal.
Suspension.
Armature + HD carbons.
Door seal.
Pump.
Then find out what was actually wrong with the damn thing.
So far, I think I’ve spent about £70, for a machine which I can sell on for at most £120 and have no confidence in. Not to mention the time involved.
You can fit all new bits, but if you start with cr@p, it’s stil cr@p when you finish.

However, going the Bosch/AEG route means that carbons/door gasket and pump are quite enough in almost all cases (Why is everybody scared of doing Bosch brushes?). In this case, I’ve spent at most £35, including the carcass and have something which I can sell WITH CONFIDENCE for £150. For those of you wondering how we do the work at the price, talk to Maddocks.

Note that we do the work OURSELVES. We KNOW it’s right when it goes out.

We also have a little contract running at the moment with a new build “Buy to let” tower block in the town centre; where they have forgotten (honest) to fit a washer dryer as part of the package. We’re supplying in Wpl AWZ410 machines at £345, and turning £40 gross on each one. And I have to find time to go to the tip once week to get rid of the s@dding polystyrene.

What would you rather do? Turn a profit of £100-120 on a quality recon, or break your back dropping off brand new junk for £40 a throw?

Note the key points here:
1) We do the work ourselves.
2) We are extremely selective about what we are prepared to sell.

Finally, there is an image problem with recons. Any major town/city has a street somewhere, usually in a fairly run down area, with a string of “Appliance centres”, usually with their machines on the pavement starting from £60 with 3 months warranty. Great if they’re still there in 3 months…….

We’re doing something a bit different in as much as we taylor a machine for the circumstance and the tell the customer what they’re getting (The wife is very masterful at this) and – IT WORKS. AND, it’s PROFITABLE.

We shift about 120/130 units a year (including some dishwashers and washer dryers) and really that’s what keeps this business afloat.

If you buy them in cheap, you’re always taking a chance, so do it yourself, do something quality and do it right!

(Puts on tin hat and retires to bomb shelter)

Regards,
Penguin.

[Martin]

Re: Recons

Very interesting point Penguin. Years back I would only recon Bosch V449’s and V454’s and sell them on to Sheltered Housing, Small Guest Houses/Hotels and Pubs. Brilliant m/c’s with NO recalls and big profits, trouble was my supplies dried up and I gave up the recon business only for that reason.

I would love to know how you get hold of Bosch machines suitable for reconning? The WFF2000 series would be a brilliant example to resell, and AEG Lavamat 610’s are built like tanks!

Martin

[kwatt]

Re: Recons

Penguin, you’re right to do decent machines on a small scale probably can work, the problem is getting the sodding things!

You mention 120/130 units a year, we were having to take in that a week, if not more! There is no choice in what you get, you just get it and it costs you, generally, £10-20 a unit depending on the deal so two trailers a week can easily equate to £3000 of which you’ll junk probably about 20-30{e5d1b7155a01ef1f3b9c9968eaba33524ee81600d00d4be2b4d93ac2e58cec2d} straight off without even looking at it, some loads are better than others. You also have to bear in mind that some drivers don’t exactly care about this stuff. 😉

Of that we were finding and increasing amount of the returns were the cheap cr*p like Indesit, Ariston etc. that’s not worth repairing, you go the odd one that wasn’t bad but it was rare and I can’t remember ever flogging one that wasn’t a problem at some stage.

So then you junk another 20-30{e5d1b7155a01ef1f3b9c9968eaba33524ee81600d00d4be2b4d93ac2e58cec2d}!

Generally at best you’re left with 60{e5d1b7155a01ef1f3b9c9968eaba33524ee81600d00d4be2b4d93ac2e58cec2d} of the machines you took in and that’s before you’ve spent all the money trying to put them right, the time and the cost of appliances themselves. So that buy-in figure, just accounting for the scrap rate is now £40-£50 a unit to cover the cost of them alone.

By the time you pay for the sizeable premises required to recon on this scale, heat it, light it, power it and then repair and test as well as clean the costs soon pile on and I speak from first hand experience. One of the big costs involved is labour, which is where these “charities” can win as their labour costs are massively lower as well as government subsidised as they are politically correct.

This is the point I was trying to make to Paul the other night in IRC and why it’s only the like of Remploy et all that can afford to recon appliances now.

This on top of a diminished market for recon appliances as new can be had so cheap. As I pointed out the other day, I can walk into Makro tomorrow and buy an Indesit for £150 plus VAT. If I could buy a container load I could have them landed in the UK for about £110 a box with no warranty on them and any name I like on the fascia, a fan oven for ~£60, landed. I did hear of, at one point, rework/graded Whirlpool washers being sold for £90 a pop ex VAT to trade last year with a year’s warranty.

The traditional markets for recon appliances were always the punters on the dole and local councils as well as, as you say estate agents, but most of the punters now have access to club books or catalouges that they can buy a machine from for £3 a week or whatever, to then the quality doesn’t matter. The councils I can tell you here are buying in Fagor washers, fully warrantied, for less than £140 (incl.) a throw and they have actually been alright.

Given that, what’s the point of recons if you can’t get a decent supply of quality appliances to recon?

You appear to have found a small niche for yourself there and all I can say is milk it for all it’s worth for as long as you can. 😉

K.

[PaulG]

Re: Recons

kwatt wrote:Given that, what’s the point of recons if you can’t get a decent supply of quality appliances to recon?

Hi Kwatt, thats the point I was trying to make on the Remploy thread, they have taken away MY only source of ‘scrapped’ appliances by somehow getting the big scrap contracts. At a guess, I’d say Remploy are riding on a wave of political correctness, with a ‘recycle, employ disabled’ policy. I’d be interested to know how many small businesses have lost their main source of income, due to the Remploy take over?
You see, it wasn’t just about reconing, these appliance graveyards were good for otherwise expensive parts. It was a gamble to buy a machine, hoping the module/timer/motor worked, but I can honestly say, I have never lost the gamble when buying a scrapper for a certain part.
Anyways, the way to go is new and manu warranty from now on.

[kwatt]

A problem you’ll find gets worse I think when the WEEE Directive comes into force fully.

K.

[Penguin45]

Sorry for the delay, just read where this thread has been heading…

Sources:
Well, it ain’t that big a city. I’m barred out of Remploy owing to the property work. I have always said what I think and they didn’t like it. Very annoying, as they “Don’t do Bosch or AEG”. All those carcasses going to waste at £10 a throw. We have a major reclamation yard in our adjacent city, where they put the Bosch’s and AEG’s (and other oddity’s) to one side in case the Penguin wants them (nice). There’s also 1 or 2 private enterpise reclaimers up here and they ring up when they’ve got a few for me. Well, no-one else wants them – they’d rather be doing WMA’s. WHY?

Finally, there are the paying customers, who all have instructions that when they’re ready to change appliance, I’d really appreciate the old one, even if it doesn’t go round again, there will parts to help less advantaged customers. I don’t play poker, but I’ve got the face for it!

So, no major individual sources, more of an accumulative effect and customer relations exercise. Plus the inevitable “What’s in that skip/garden/back alley etc” as you go round. Admit it, we all do it – you can spot an abandoned machine by instinct after a few years in the job!!

Regards,
Penguin.

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