State of appliance service industry

[Eng2010]

Hi all, I worked in the major appliance servicing industry for 12 years before moving into computer controlled equipment / robotics. I left the industy becuase I felt it didn’t offer much of a future because I could see the way new appliance pricing was going (particulary washing machines) and the stanglehold the retailers had on extended warranties.

I now have a interesting business opportunity to re-enter the industry and would like to know what the market is like. So I would be extremely grateful for some feed back from some pros in the industry on the following points:

1. is there still a good market for appliance repairs? Or are people more inclined to replace if the repair is say over £100.
2. Do people see through the “5 year parts warranty” from manufacturers service when it will still cost them £90 in labour.
3. Looking through the yellow pages there seems to be less businesses these days involved in appliance repair. Is this an accurate reflection of the market or are there just less people bothering with yellow pages !?

I would be extremely gratefull for your views.

many thanks

Tim

[Penguin45]

Re: State of appliance service industry

Morning, Tim.

Current state of the industry as a repairer can best be described as a contentious issue……. We are an endangered species, as fewer and fewer youngsters are coming in to learn the trade, so numbers in the book are slowly declining. This is exacerbated by lots of the older engineers packing in early faced with the rise of the computers fitted to modern machines.

So……… As an independent sole trader, my BER rate is rising (which damages my profitability). I don’t have a problem with cheap machines; however, cheap machines should have cheap parts. They don’t. The Indesit Company is particularly guilty of this. BEKO used to be a good example of how to sell and maintain cheap appliances. The old WM10 series machines used to blow up PCBs for fun, but they were £16, so not really a big issue. The spares have now been handed off to third party suppliers, and prices have soared.

Your comments with regard to price are crucial to where we are today. The Sheds (Comet, Curry’s etc) wish to shift White Boxes, as each represents a unit of income. The more frequently it has to be replaced, the more regular the unit of income – you have to ask, what is their interest in selling a product with a reasonable service life? The sickener is that the low end manufacturers are so desparate to keep their factories running that they are prepared to make this sort of rubbish.

Which leads to the Chinese……. The forums are stuffed with complaints about the Chinese dishwashers. They cost £45 on the dock, pay your own shipping. Kenwood, Cookworks, Proline, Necht, Diplomat (which was disappointing), even Hoover have bought this horror and punt them out over here. First year failure rate is over 80{e5d1b7155a01ef1f3b9c9968eaba33524ee81600d00d4be2b4d93ac2e58cec2d}……..

This is great if you are an approved service agent……… Except, you fix it, you don’t make it better. Service agents work through a network, controlled by a Work Provider. They sell their services for £60-70 per call. They pay their repairers £30-40 per call and expect the earth – some even expect you to guarantee the entire appliance for 3-6 months after your repair. Fit a £5 door catch, you’re guaranteeing an £80 computer board, £120 motor – the list goes on. Yet, the multi engineer businesses are sufficiently deparate to keep their people working that they sign up to these contacts. One particular “provider” pays a low rate and will only pay half fee if the machine is beyond economical repair. This figure (IIRC – it’s late) is £13.50. Even as a sole trader, it costs me about £18 and some pence every time I turn the key on the van.

The Public. As an Independent, I make my living from the public. The kindest thing I can say, is that they are totally misinformed about what they think they are buying. Most of the time, they don’t understand what it is that they’ve bought, or even if it’s fit for purpose. The forums are full of disappointed people…….. Their last washer lasted 10 years, this one only 3. They’ll never buy another Indesit, this time they’ll get an Ariston. Same machine, different badge.

One of the true joys of UKWhitegoods is the debunking of the myths, rumours and downright lies perpetrated by the manufacturers and the retail sheds. People ask a question, they get a straight answer. They may not like it, but it’s honest.

As far as the cost questions are concerned, as far as cheap rubbish is concerned, £100 is definitely a cut-off, perhaps even as low as £80. Last week I had a customer decline a repair for the sake of a £7.00 pump motor; then picked an arguement about the call-out charge, despite being advised in advance. No recommendation there then.

Fortunately, most independents have a large customer base of intellegent people who are willing to listen to their engineer, who want appliances with a reasonable service life.

This is where the ISE project comes in. UKWhitegoods has developed and launched its own upper mid-range washing machine. It isn’t going to compete with the Indesit Company or Lux Group as far as volume is concerned, but it it offers a simple and reliable product with outstanding back-up to people with brains. You sell it, you fix it, we pay you. In the present climate, it just doesn’t get much better. AND – new machines are on their way.

You didn’t outline what your “opportunity” was, so I hope that this is some use as to where we are at the moment. If you are serious, have a word with admin@ukwhitegoods.co.uk and ask for trade access – we can have a rather more frank discussion there.

Right, rant over for this quarter,

All the best,
Penguin45.

[Eng2010]

Re: State of appliance service industry

Many thanks for the comprehensive reply Penquin I will apply for Trade access – much appreciated.

The state of the market is pretty much what I thought and even in my currenty industry we are affected by the Chinese. Part of my current role is accessing equipment from this region for CE compliance, as the purchasing department are constantly excited by the insanely low prices. Todate i’ve yet to pass anything, as they have no concept of safety acceptable to Western Europe. People will buy this rubbish, but they will learn when they get burnt (hopefully not literally !).

It may be worth your while for Ukwhitegoods to have a good look at some of these Chinese machines because you could spoil their party. As the only thing they should be able to offer over Europe is cheap labour and a low margin. But they go much further than that, because CE compliance costs. You may well find components that hold no approval outside of China (CCC) and will render it not compliant with EN60335 and therefore illegal to use in the EU.

As an example one big Chinese supplier I deal with offers a machine for it’s domestic market that is half the price of it’s CE version. It’s mechanically identical, the only thing that is different is the electrical components.

It’s also not enviromentally sustainable to be chucking £75 boxes of cr@p away every time it goes wrong. Sod the WEEE directive, the goverment
should be taxing manufacturers for making appliances not designed for a minimum ten year service life !!!

On another note I’ve always found it an interesting paradox that people are prepared to spend well over a grand for an oven (and rarely use half of it !), but will then spend £300 on a washing machine that gets beaten to death daily !

I’ll outline my “opportunity” when I get access to the Trade section.

[Author]

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