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Theres a forthcoming meeting where some serious players are to debate questions between themselves.
Manufacturers and Work Providers are to discuss this industry, if you want to have an input, try here. It will get read by many of those who are attending as they read the site (even if they don’t admit to it), you never know someone might just take notice for a change.
I think….
1) That the problematic calls we face as an industry are those we do on behalf of an insurance or manufacturing company(s). Certainly our chargeable work causes no problems as we all price our chargeable work at our own current rates. The lack of work being a separate issue.
a) Manufacturer work;This type of work has been seriously under funded by the manufacturers for several years. Most businesses will at best cover their costs doing in guarantee work, at worst, with poor reliability and poor spares back up, all will run at a loss. When you consider a Manufacturer allows an appliance to be sold for £160.00 it’s easy to see why “service” is under funded. Why manufacturers expect an independent business to work at a loss and survive on inflated chargeable rates with impossible spares prices is beyond explanation. Even more impossible is why independents allow themselves to be “put” upon in this way.
Without doubt, sensible pricing by all manufacturers, is the only way to shift the burden of customer care and support back onto the customer, reflected in the purchase price as it should be and not on to the independent business.b) Insurance work;
Underwriters are seriously out of touch with the costs of independent businesses. The cost of an extended policy is not cheap. They are expensive, producing massive profit for the retailers and insurance companies alike. The overwhelming position is that not a single insurance policy pays an independent his true worth. All the technical costs of training and administration, employment and pensions fall to the independent who in relation to his costs is awarded the smallest percentage of the insurance pot. So once again the costs of the policy fall onto the shoulders of the independent, who for less than 50{e5d1b7155a01ef1f3b9c9968eaba33524ee81600d00d4be2b4d93ac2e58cec2d} of the payment has all the work to do. Its simple economics to work out that the payout is reflected by the policy cost. The real cost of these policies has to rise or 3rd parties have to pass a larger share of the payout to their agent in order for the following to happen.
c) Investment inwardly
Without the profit none of us can afford to up-skill our workforce. Forthcoming legislation will force business to attain awards/certification in order to continue to trade. Contract rates have to rise to £40.00 per call (at least) with increased support from spares and logistics to attain 1st time call rates. The introduction of annual inflation rises has to be implemented to stop the erosion of the independents position otherwise we go backwards and fall prey to devaluation and inflation all at the same time.
d) So who pays the ferry man?
It has to be the end user, every time. At the moment we are asked to bend backward to achieve “service levels” that far exceed the remuneration. The end user pays peanuts for an appliance and gets everyone involved in “service” dangling at the mention of “watchdog” or “consumer groups”. It’s a fact “service” costs, it’s not cheap to put a trained engineer with tools and technical on a doorstep, unless we all raise the anti, expectations and aspirations will always be low.
Kevin
Re: So what are the fundamental problems in this industry?
Problems facing Service providers
Most of the problems in today’s domestic appliance service and repair trade are largely due to the fact that our industry has been subjected to a sustained period of under investment.This has had several causes but it must be said that the single biggest factor is as a direct result of the ever reducing prices of finished goods. Where as this on the face of it might seem to be the great panacea for the consumer it has brought with it , it’s own problems.
In the ever increasing drive to provide cheaper appliances, the build quality of appliances, particularly at the budget end of the trade is abysmal to the point where only a few short years ago an average life expectancy for a mid market washing machine was eight to ten years. That average life has now been reduced to less than five years.
The Service providers have been subjected to a lower perceived value of their service by a combination of lower priced finished goods whilst at the same time the cost of spares for these same products from the manufacturers, have risen dramatically.
This has led to more and more appliance repairs becoming less viable and uneconomical. Which in turn, has led to a much greater usage of landfill sites, in which to dispose of these products.
To illustrate the effect of this on the service provider in real terms, it might be helpful to inform you that during a recent exercise by UK Whitegoods ltd to contact all independent domestic appliance repairers in several studies throughout Scotland and England via a data base purchased through Yellow pages. Our studies have shown that within the last two years nearly 20{e5d1b7155a01ef1f3b9c9968eaba33524ee81600d00d4be2b4d93ac2e58cec2d} of those companies contacted by UK Whitegoods had either:-
A) Ceased Trading
B) Retired
C) Gone into ReceivershipThe situation is compounded by the governments own figures, taken from the Office of National Statistics that the average age of a service technician is 54 Yrs, of age. It is patently obvious that a skill shortage on an unprecedented scale is almost upon us. This is even more worrying when you consider that over 70{e5d1b7155a01ef1f3b9c9968eaba33524ee81600d00d4be2b4d93ac2e58cec2d} of all Manufacturers repairs are presently carried out by Independent Service Providers.
During the last few years we have also seen the increasing growth of extended warranties from various sources (Retailers, Catalogues, Insurance Companies) this has also added it’s own difficulties to many Service Providers. Firstly there is the fact that due to take up of these warranties there has been a marked reduction in chargeable work over recent years, which was traditional used to help offset the less profitable in guarantee work for many manufacturers.
These extended warranties are often administered by companies who then control large work volumes and require many S.P. to become multi branded or indeed any brand, so where as once upon a time the S.P. would have had strong links with three or four manufacturers and had built up a unique expertise and technical knowledge on certain brands this has in many cases been diluted in the multitude of brands and products that S.P.’S are now expected to service and carry both technical information and spares for.
Independent Service providers are finding it increasingly difficult to obtain technical information from Manufacturers who once used to supply the trade at a cost with detailed workshop manuals including circuit diagrams, component function, and step charts.
We are now lucky with many Manufacturers to get an exploded diagram of parts. I believe this to be largely due to the large increase in model ranges and the short shelf life of many recent models.
Manufacturers are now starting to require the use electronic diagnostic equipment to
Diagnose faults and even reprogram electronic control systems, which is fine if the bulk of your work is from one manufacturer but if you are required to do multibrand servicing as many Service Providers are today then the cost is exorbitant in equipping staff.The obvious answer too many of these problems is that of investment. Investment in Staff and training, investment in I.T. equipment and technologies but no matter how much we train, up skill, or equip ourselves there is still no substitute for the experienced field technician passing on his years of hard earned work experience.
The problem being that most of the work that is being carried out today is on such tight profit margins controlled by work providers, administrators, and manufacturers that there is simply not enough slack in the system to have a paid apprentice accompany a field service technician to acquire those skills.
Another relevant problem is that as all jobs are at different locations the cost of insuring a young trainee to drive a vehicle is again an unrealistic proposition for many
Potential employers.To summarise the situation, as a trade we have already reached the precipice. As service providers we are faced with the fact the remuneration for our skills and services are undervalued and apparently inextricably linked to the reducing cost of appliances. Even though the cost’s of providing our service is rising exponentially year on year, for items such as fuel, wages, premises, rates, insurances. Therefore it is little wonder that people are leaving the trade in their droves.
Sean DelaneyRe: So what are the fundamental problems in this industry?
All of the above points are completely valid, but do not address the fundamental root cause of the present situation. It’s really very simple – the complete devaluation of the product to the public. The constant reduction of SSPs leaves no margin for Service in a product which is sold twice in order to reach the public. Whilst this may keep the High Street and Retail Park retailers busy with turnover, their own profitability is being compromised long term. Witness the loss of Rumbelow’s and the huge recent reduction in Powerhouse.
We cannot actually blame the public for their desire to purchase on cost, after all it’s a major consideration in any household. We can’t even blame them for their ignorance as to who actually makes any given product. This is (in my opinion) a dishonest practice perpetrated by the manufacturers and retailers upon the Public at large and could be simply corrected by the addition to the efficiency label of “This is a XXXX product”.
With regard to the repairability question, we are stymied always by the absolute intransigence of any manufacturer to price their spares appropriately. If they’d care to accept responsibility for the failings in the quality of the components fitted to their appliances in the first instance, we would all be far better served. Let’s face it, we all know that washer motors run out at c.£15 and electronic boards at less than that, so even allowing for a modest handling charge, repairs become a much more realistic proposition.
Even the classic Servis motor/module problem could be brought in at under £100 with the above rationale, even allowing for the repairer being paid £40.
As a fully Independent repairer, we currently charge £40/hr and are contemplating an increase due to the spiralling cost of fuel. Home Counties and London repairers will probably need to be charging more than that to keep their businesses solvent.
A small, but I hope worthwhile contribution; I trust that common sense can prevail for the good of us all.
Regards,
Chris Chantrell,
Proprietor,
Quality Washer Repairs,
Leeds.Re: So what are the fundamental problems in this industry?
I can sum it up another way.
1: Buy a £25,000 German car, then go for a service or repair. The garage will charge you £60+ per hour and you take the car to them.
2: If the thing breaks down on the roadside, chances are you have to arrange your own means of gettting it to the above repairers, be it RAC or AA etc. If you haven’t got that cover, then god knows how much.
3: When you require service on the car, a thing which cost you as much today as a 3 bed semi would have done 25 years ago, you have a minimum of a 2 week delay.
4: You may get a loan car. Chances are it is a 1 litre Fiat. But more than likely that car is out somewhere else, if not they give you the keys and you have to go look for it, and it is short of fuel.
5: Something else goes wrong 2 weeks later, you are not to know if related because you didn’t see what was done before, and you have to pay again.
NOW LET’S TURN THIS ON ITS HEAD
1: Buy a £250 Washing Machine, breaks down, we get a one off sum from the makers or insurers of less than £40, no matter how many visits etc. and we go to the customer.
2: No luxury of the product being brought to a spacious workshop. Instead we have a narrow kitchen, delicate cushionfloor and poor access. Then there is liaising with the customer between school runs, bowls, golf etc. If we are attending a chargeable call, as soon as you present the bill you are told you were only in the house 12 minutes. Apart from a poor perception of time, no allowance was made by the consumer for getting there, van stocks depreciation etc.
3: There is no such thing as a delay, we are expected to turn out like the emergency services, on an appliance that was less to buy than the average weekly wage. 25 years ago the same spec machine would have been 3 weeks wages, not the price of a 3 bed semi.
4: Sometimes we are expected to provide a loan machine, (oh yeah!). Imagine the logistics in that, especially if you have no intention of uplifting the product whilst you await spares.
5: Something goes wrong again, totally unrelated and we are expected to take the hit and gurantee the product for up to 3 months in some cases.
There’s no justice in this world.
Alex
Who drives a German car and has no axe to grind with the local VW repairers.
Re: So what are the fundamental problems in this industry?
Excellent Alex, in plain english.
Can we make Alex’s post a sticky or just a post in a public forum please ❓Nice one 😉
Greg
Re: So what are the fundamental problems in this industry?
kheath wrote:So who pays the ferry man?
If the ferryman owned the stretch of river crossing and the ferry to cross it, then he could easily dictate the toll 🙄
However the whitegoods industry is not so clearly defined as to find itself relying entirely on a ferryman to be able to cross, as more often than not the ferry is owned by a work provider 🙁
Speaking on a personal level as ‘a passenger’ in this senario, it is my conclusion that the answer to the question ” So what are the fundamental problems in this industry?” is simply be rid of WP’s and buy your own boat!
Re: So what are the fundamental problems in this industry?
You know, I’ve been watching this thread with more than a little interest to see what was said and so far it’s been extremely good so please don’t let it degrade.
To answers Martin’s points.
You won’t get rid of the WP’s, deal with it. They are an easy one-stop fix for many people even if they are very expensive. What I do strongly object to is warranty rates for premium rate work, a good example is the work that I refused to do for NESN on behalf of Currys as it was too cheap a rate for what was required. I still think it is and I still question why an insurer, in this case Currys, pays less for a service call than many a manufacturer does for warranty service. Usually you’ll get the old “ah but it’s volume” fired back, well I hate to break this to you, but more volume can often just lead to bigger losses especially if your operating costs rise over the rates. I know, I have earned that t-shirt… several times over.
Shockingly today I got word that a two-bit cooker hood manufacturer from ISDAL that pays more for a service call that many an insurer does, for warranty repairs. I know who’s getting the better service in my business, the people that pay. Call me mercenary, but heh, I run a business to make a profit not as a charity for rich insurers or retailers. Profit is NOT a dirty word and others that we work for aren’t exactly shy about raking it in, why should we be any different?
I’m not picking on anyone in particular really, God knows there’s as many insurers and work providers out there that do exactly the same. But the next time that you’re asked to do some multi-brand work for someone just ponder what it actually costs you. As Alex points out we actually have greater cost and inconvience than many other industries as his comments do not just apply to the motor trade.
But here’s a little thought for you on that score, you don’t see many poor franchised dealers in the car industry do you? And, when it comes time to sell up the business is worth something isn’t it?
What value is there in being an “authorised agent” in this industry other than the kudos? There’s certainly no great financial advatage and certainly no end benefit when the time comes to shuffle off.
Mind you, with a three month termination agreement what do you expect? It’s only worth three months profit… nothing.
On the subject of devaluing of the appliances I could write a book. I could fill pages and pages explaining what’s wrong, but there’s no point. The idiots that market the appliances and the bean counters don’t care quite frankly and won’t until they don’t have any repairers left. They’ll only care then as it’s going to cost them a damned fortune to exchange everything, even for user faults as they have nobody skilled enough to go and see what the problem is.
And I’ve heard a great many ostriches whacking their heads in the sand over this as they just don’t want to know. Well, sorry guys but the day of Armaggedon on this count isn’t far away. In fact it’s one hell of a lot closer than even I thought.
How do I know this? I know this because we have hard figures to back that up now. Proof. Irrefutable, undeniable PROOF!
We have carried out the largest every study of the independent repair industry in the UK and the figures are astonishing and very depressing indeed.
When I started UKW I stated that I thought that the repair industry had five years until a repair network could become unsustainable, well we’re two years down the line now and there’s no sign of change. It really is this simple, either the organisations that want appliances repaired in the field start to invest or they won’t have anything left to invest in. I’m deadly serious and speaking with authority from a position of having the figures to prove that.
But to go back to the devaluation of the products and Martin’s point about doing away with the middlemen…
Repairs@
ISE
Both done for you. Both there to help you hopefully to profit from. Both not taking the Mickey out you. And all the while we try to treat everyone as adults and tell you what’s going on, even if that is sometimes not convenient for us.
ISE is our chance to take back some of our own business and keep it. Repairs@ is a nice way to steal some other people’s business, just as we’ve had done unto us. Tough, the independents are fighting back against the big guns, even if it is in a small way and I can’t say I’m filled with remorse.
In short, we either get on with it ourselves and save ourselves or falter and die. None of the monkey’s in a suit with a clever spreadsheet, BSc in accountancy or business studies and a career to further are going to do it for us. In fact I suspect that many would like to extract still more blood from the already annemic stone.
Is this post fighting talk? No, it’s just a hacked off engineer gobbing off that decided to get off his backside and actually try to do something about all that he saw wrong and along the way I bumped into a few others that felt the same.
K.
Re: So what are the fundamental problems in this industry?
Price. Any adult under the age of 35 has (except for housing) never known inflation. The price is expected to continue to fall, smaller traders relying on service to keep afloat. The big boys play the volume game and wonder why they sink e.g. powerhouse etc. Supermarkets must be rubbing their hands heres a chance to clean up! A farmer recently told me if supermarkets cant sell or want to discount the supplier must bear the cost (wheat carrots etc). Well folks what makes you think we are any different? Brown goods are already a major part of supermarket display, its proberbly only the weight that holds back whitegoods. There is one thing that might upset…………….
WEEE will this push the price up? H.M.gov was caught with egg on its face re fridges so I wont hold my breath. I expect that they will push for the cost to be met without being passed on to costomers once again the supermarkets would help here.
We are the last link in the chain everyone has had a piece of the pie by the time we get to fix them any profit will be down us not insurers or contract work.
Spares providers will know this and will be, with our support, our best hope of keeping afloat.wilf
Re: So what are the fundamental problems in this industry?
Or just as profound – If the manufacturer is selling the product to the sheds at £100 and the retailer is passing it on to the customer at £250 – who’s making all the profit??
Re: So what are the fundamental problems in this industry?
In the first post on this thread , Kheath states in paragraph [c] that forth coming legislation will force business to attainawards/certification in order to continue to trade . Is this definately on the cards? If so , what is the likely timescale , and what will it involve? One could envisage some kind of test or exam. Who will administer this? I dont need to ask who will pay.If additional training is necessary , perhaps Whitegoods could be involved . Or perhaps some government agency will teach us how to work without the service info that the manufacturers are so coy about .
Re: So what are the fundamental problems in this industry?
UK Whitegoods asked the office of the deputy prime minister the question of whether the government were planning to legislate our industry.
As you can imagine the answer was not a simple YES, but left us in no doubt they are planning something……..
Is legislation on the cards? I would say so.
What is the time scale? I don’t know that, but the sooner this industry gets their collective heads out of the sand the better.
The test? I think at least NVQ level 2.
Who will administer it? Whoever the government appoint, unless we do something to show we can do it ourselves.
Additional training? You bet. For an existing engineer to achieve level 2 NVQ is not difficult, it does require you helping yourself and does incur cost.
Whitegoods involved? Yes we are, come to our meeting in 7 days time to find out what we are doing toward introducing “new blood” into the industry. Come and chat to us and get involved with your own future.
We (UKW) need your help. We need the help of the whole of this industry. Were not proud, we will ask for it. Unless we all pull together and focus on the following two points we will not be able to determine our own “training” futures:
1) New Blood in the shape of Modern Apprentices
2) The upskilling to NVQ Level 2 of the existing workforce.Both involve cost to “you”, there is external funding but the government expects businesses to meet them part way with regards to funding. This is a massive issue and your support is increasingly important if we are to break the cycle of endless meetings that decide nothing, achieve nothing and waste even more time.
Therefore are you interested in listening to a current training provider who delivers Modern Apprenticeships to the Engineering industry?
These guys are able to help this industry achieve the framework required to enable Government funds to actually get apprentices in to your businesses.
There is a catch of course…… they want to meet you, talk to you, see if there is a need for such a scheme, if anyone is actually requiring an apprentice, interested?
If you are interested, and this is open to all, Independents, Work Providers, Insurance Companies and Manufacturers, then contact admin@ukwhitegoods with your contact details and we will respond with an invite to what will be a very interesting meeting.We have to limit the places to 30 because of space and time, so 1st come 1st served.
Kevin
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