I was using an example of how much a forum member might have to change. While they aren't sending people to Walmart to buy parts, they do have real costs associated with getting that part.
Reasonable Parts Markup?
- Thread starter kythri
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I was using an example of how much a forum member might have to change. While they aren't sending people to Walmart to buy parts, they do have real costs associated with getting that part.
Is anyone ever really honest about salaries and income on the internet? Lol. Ya'll can throw out numbers if you want but let's be honest, no ones going to believe them.
National averages:
Lube Tech $15/hr, $32,000
Journeyman Tech $25/hr, $54,000
Master Tech $26.85, $58,000
Indy Shop labor rate $70-90/hr
Dealership labor rate $80-125/hr
Obviously there are a million factors that go into income, the biggest of which is probably location. Let's not get bogged down in those details.
If you were a master tech bringing home $58,000 working flat rate you wouldn't take a $58,000 salary?
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finn
Well-known member
Lots of dealership tech’s itching to get into municipal or private fleet work. They see those jobs as having more stability, better pay, and better benefits.
Sevenhills1952
Well-known member
I retired from a service business, consumer electronics repair but same principle. I belonged to a large organization of business owners worldwide. We talked about lots of things, business, tips, etc., but not pricing since that could get "sticky" (everyone raising rates, etc).
We talked a lot about CODB (cost of doing business) because a garage for example in rural Georgia has a lower CODB than Manhattan.
With repair of anything there's a very wide range from someone working from home basement to an expensive building, large staff, and fortune in tools and equipment.
Some repair people I have known were happy making $200/week profit...some were talented some not.
Some were upscale at $200/hour...some were talented some not.
I personally made well below minimum wage some jobs I caulked it up to going to school, some I made a large profit on.
I would never install a customer supplied part for many reasons. Generally the markup was greater on the less expensive parts, less the higher priced ones.
I never charged separately for supplies since those were part of parts mark-up.
The consumer makes his or her choices. One extreme were the good repeat customers, other extreme ones you couldn't please if repaired for free.
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We talked a lot about CODB (cost of doing business) because a garage for example in rural Georgia has a lower CODB than Manhattan.
With repair of anything there's a very wide range from someone working from home basement to an expensive building, large staff, and fortune in tools and equipment.
Some repair people I have known were happy making $200/week profit...some were talented some not.
Some were upscale at $200/hour...some were talented some not.
I personally made well below minimum wage some jobs I caulked it up to going to school, some I made a large profit on.
I would never install a customer supplied part for many reasons. Generally the markup was greater on the less expensive parts, less the higher priced ones.
I never charged separately for supplies since those were part of parts mark-up.
The consumer makes his or her choices. One extreme were the good repeat customers, other extreme ones you couldn't please if repaired for free.
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The technicians are paid salary based on their skill and certification levels, not by an antiquated flat rate or book-hour paradigm. I won't disclose exactly what they make because some of them and some of my colleagues are watching this thread and I don't think it's appropriate to disclose the techs' private information.
However, to answer the real question I believe you are asking; they are all paid significantly more salary than what they would make if we used flat-rate with book time. As a result of this, they are all EXTREMELY qualified and competent. Their quality is awesome and they are happy. They don't mind talking to customers or taking the time to look up service information or learn new things.
In some of the other posts, some of the mechanics have said that they haven't seen shops that pay salary but I know they absolutely DO exist around here. And it suddenly occurred to me that the reason why a lot of mechanics say they are not really exposed to shops that pay salary is because shops that pay salary don't have the turnover of flat-rate shops. So once they are staffed with good technicians the technicians don't leave. All of my techs except one have been with me for a long time. And the one that's relatively new was a replacement for a tech that retired.
And to the techs that have repeatedly posted and vehemently said that they love flat rate and would never work salary I say, AWESOME. I am glad that you have found a system that works for you and makes you happy. Good for you. Good luck.
richfinn
Well-known member
I would say your figure is probably accurate (I calculated it to $67,000) with a little overtime
That's not too far away from what you pay, reading between the lines, so for the guys who think "flat rate" is a scam, where is the rip off exactly?? The techs are paid approximately the same!!!
"Book time" is the recommended time the vehicle manufacturer (who designed and built the vehicle) allows for that task or procedure
Exactly the same as the recommended retail price of a part (which we have slowly and begrudgingly agreed is fair)
This is how capitalism works fellas!!!
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kelpaso1
MEMBER EMERITUS
^^^This is like the last shop I worked for and was run the same way. We were paid a salary and didn't need to work so fast or cut corners. But we also had a bonus system that, if we bring in so many labor hours over the set point in a month we would get a percentage of how much more we brought in. This made us a team and we helped each other when problems arose. Most of the time we got 2-300$ extra a month, and many years we got 4 figure bonuses at
time for our good work. Boss was awsome.But I'm sure some of these wingnuts will have something to say about that too.
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richfinn
Well-known member
"Flate rate" techs personal hourly rate is also dependent on skill level and qualifications
For example a certified Mastertech will earn more per hour than a lube tech would
Being flat rate doesn't mean techs are less qualified or less competent, it is a payroll system
By your own admission, you carry out restoration and fabrication work at your shop alongside regular service and repair work, there are no flat rate book times for those types of work, so even if you wanted to you couldn't operate a flat rate shop
I'm not knocking your business and how you charge for your time, it sounds great but it's comparing apples to bananas
kctyphoon
Banned
Dude - you have 15 pages to read to catch up.. we’re not starting from the beginning again..
kelpaso1
MEMBER EMERITUS
Guys we should let this thread die. They will not listen to reason and are just trolling. Glad I don't have them for customers, because THEY would be fired.
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four.cycle
Well-known member
kctyphoon
Banned
They ARE selling hours.. who do you think the labor rate signs hanging in every shop POINTED TOWARDS THE CUSTOMERS is for?? Them, so they dont forget?? “Labor Rate” - $100 an hour.. “how much will this cost” - “it will be 4 HOURS plus parts” - and thats WHY they have to display their hourly labor rate - cause they are charging you by the HOUR.
Ok - they’re selling the finished job.. how did they explain WHY it was going to be $400 for labor - when there is a GIANT sign saying the labor rate is $100 an hour? Did they say “its going to take 4 hours, HENCE we are selling the job for $400”? Did the customer agree to the price - cause the job was sold as needing 4 hours of work? Or did they say, “its only gonna take this guy an hour - that’ll be $400 for the hour of HIS labor - cause he’s worth 4x what the other guys are...
No matter what way you wanna go about this the HOURS are being misrepresented...
If a contractor told you it would take him 10 hours to do something - and thats WHY it was going to cost you $1,000 - and you “bargained in good faith” taking him at his word - then 30 minutes later he says he’s done - would you have AGREED to paying $1000 for 30 minutes of labor? NO, of course not - he misrepsented what was required for him to do the job. You only agreed to the $1,000 cause he TOLD YOU it would TAKE a 10 hour investment.
The auto shops (most of them) are selling their time.. they are NOT under contract like your union carpentry job. If your carpentry job ran 2 weeks over - you’re eating that - cause your under contract for the finished job. If something breaks while your working - your responsible for that. If you bring your car in, and get an ESTIMATE - and in the course of the work - EVERY bolt breaks, they break every sensor they unplug - WHOS paying for that? Them? No - YOU are, at which point your final bill will be much higher then you ESTIMATE was. If they were not selling their time - you wouldn’t even need to know what their hourly rate was - and they would not be LEGALLY REQUIRED to display it - cause “time” would not be any factor in the bill for the customer.
And like i stated before - if theres a guy that so proficient he’s consistently beating the company’s estimate - then his pay should reflect that through the hourly wages he gets from his boss - not based on YOUR bill. It’s been incentivized to bill for extra hours not being worked - cause they both (mechanic & shop) directly benefit from doing so.
Your union contract - you decide to work the guys weekends so you finish on time, did that OT eat into the compnay’s profits Or did the company go back and say “we had to work more hours than WE ESTIMATED before we signed the CONTRACT FOR THE FINISHED JOB, so you now owe us more money” Your Contract is staying the same.. the shops estimate can change at any time if something comes up.
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I have never, in my experience, seen a shop that pays salary. I know almost certainly that no one would pay me a salary even close to what I make on flat rate.
richfinn
Well-known member
Oh Yeah #32
Those "Technicians" do seem like f*ckwits to be fair
You dont have much luck do you??
Techs have to meet or beat book time or they don't bring home that pay. That causes them to cut corners and tack on "gravy work" to customers bills in order to make pay. The shop owner doesn't care because the faster the tech works and the more gravy work that gets added on, the more money they make. I think this creates a pretty bad ethical dilemma for techs.
As a customer I really hate that the guy working on my car is trying to decide whether to cut some corners or take home less pay.
Also, the techs are assuming a lot of the business risk. What if the owner decides to cut advertising and business slows down? Owner is ok because he covered his loss with what he saved in advertising but the tech... he's just SOL.
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How do you know they're paid significantly more? Unless they're unable to hit hours, the skys the limit with flat rate. I think I'd need to be paid 10 dollars an hour more salary to even consider a salary/hourly position and that might be on the low side.
I really liked working hourly because you could have slow weeks or ****** jobs and it didn't matter plus the whole atmosphere was more laid back, but usually you have good weeks and the boss reaps the rewards. Like I said a few pages back, lets say I do spark plugs on a 2015 C300, they pay 1.2 hours and i can do them in 20 minutes (taking my time) and we do 3 of them in a day. 3.6 x 20 is 72 dollars for one hour of my time. Surely your guys are not paid 72 dollars an hour, right? Obviously this is a gravy job and one I've done 100 times, but at my last shop I would have been paid 22 dollars an hour...hourly.
22 dollars an hour, or 72 dollars? Even 30 or 40 wouldn't cut it. 50? Yeah maybe. Again this is an extreme example and the numbers are made up (Well not the labor times) and you will have slow weeks which offset this, but its not all sunshine and rainbows. Maybe that's why you don't need the parts markup? There's extra money in the business because your guys are great mechanics and getting work done quickly and efficiently on the regular.
I dunno, I heard all the horror stories of auto work, then came all the horror stories of dealership work, then came all the horror stories of flat rate...lots of horror stories but to be honest, the dealership I'm at is amazing. Nowhere else will pay me what I make here, but that's probably because I'm at a mercedes dealer and the german cars seem to pay more.
I don't even need to supply my own box here as I'm supplied with a massive work station.
Guaranteed pay if you don't beat your guaranteed hours with billable hours. I could not touch a single car all year and make 40k.
I get flat rate pay with incentives, anything over 45 is increases my pay wage with incremental increases up to 60 hours, every 5 if I recall. I'm part of a union and receive extraordinary benefits + pension, and I work gravy hours. It's not exactly a walk in the park and I cant really (nor have I ever) turned 60 hours, but I can't think of a single complaint, other than the odd job that *****. Shops broken up into 4 teams of 6 or 7 guys, and all the guys on my team are fantastic. Kid next to me had two of our team members help him out for 3 hours each after he broke off a timesert tool flush with the block... which mind you they're not paid for. We all help each other out, ontop of that we employ a CDT and have a shop foreman, both of whom are salary and available to help anyone out with questions or an extra hand as needed. At this point Its like going out in the garage and working with my buddies, except I get to work on 200k cars and nothing in my garage will ever be worth 200k...at least not anytime soon.
Lots of horror stories and lots of ****** shops, but I think its a great gig generally and hate to see people discourage kids from entering the field if they're passionate about it.
Yeah it's tough, the second you hit over 40 flat rate the dollar amount for your time increases significantly with no limit. It would be tough to beat.
I'd need probably a 75% increase to accept hourly pay.
What's the point of this? If you're not interested in contributing anything productive don't read the thread.
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Damn, that's pretty awesome lol. Been around the block a few times eh? Are you a master tech at like a dealer or an independent place?
richfinn
Well-known member
Who exactly is tacking on gravy work, thats not required?
Who exactly is cutting corners to make book time?
Flat Rate paid techs are all crooks?
A crooked shop is a crooked shop, the payroll system has nothing whatsoever to do with it
I've seen the guys you are referring to in both salaried shops and dealers on flat rate, they dont last long in honest shops
I assume you actually drive a car, that you bought with your own money. From a Vehicle Manufacturer who operates the "book time" system in its dealer network
Congratulations, you support the "flat rate" system!!!
GM World Class tech. Been at it about 15 years. Havent had a week under 50 since the recession.
You're employer is already paying you what you make. Why won't they give it to you as salary?
Because if you slow down and focus on quality over speed they lose money.
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alexb2000
Well-known member
I have seen some subtle differences in practice by watching flat rate techs on YouTube. For example there is a dealer Ford diesel tech on youtube that appears to work flat rate. I watched him change an A/C compressor on a 80K mile truck. He didn't change the O-rings on the compressor lines or the dryer. I asked him about this in the comments and his response was the o-rings weren't leaking when it came in, the dryer was fine, and the A/C worked great when it was picked up. I would have changed the O-rings and taken a second to put some nylog on them along with a new dryer. Help the customer avoid common leaks as the vehicle ages.
In general I take some time to look at everything while doing a repair and try to fix any little thing before it becomes a big thing, because my goal is to keep a vehicle reliable for a customer. If it isn't then they sell it and buy a new vehicle and you won't see them again for years if at all.
In general I take some time to look at everything while doing a repair and try to fix any little thing before it becomes a big thing, because my goal is to keep a vehicle reliable for a customer. If it isn't then they sell it and buy a new vehicle and you won't see them again for years if at all.
richfinn
Well-known member
The quality steps are factored into the book time by the vehicle manufacturer
They dont want unreliable cars or comebacks, its bad for the Multi-Billion dollar business of selling new cars
Of course not every flat rate tech and shop is a crook.
Do you at least see how the flat rate system is set up to reward those who cut corners and tack on unnecessary work?
Do you understand why customers might be a little skeptical of a system that rewards speed over quality?
Do you understand why customers are skeptical of an owner who says 'I run an honest shop' when he has incentive to turn a blind eye to the abuses of his techs?
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chevy302dz
Well-known member
Yes the steps for a quality job are figured into book time but the reality is finding ways to speed up or skip steps is how you beat flat rate consistently. People have always looked for a faster/better way than standard to do a job and whole tool companies exist for this very reason.
For example, if a blend door job calls for removing the dash and pays 10 hours can be completed through the passenger airbag hole in the dash with special tools and/or ingenuity in 1 hour is it a quality job quickly returned or a hack job because you didn't follow procedure? Does it only become a hack job if something goes wrong or is it still a hack job because you stressed a wire that now may fail a year from now or never? Does a customer have a right to complain if the tech doesn't follow that procedure no matter the results? While speed may not be a reason to penalize a tech or business, procedure can be.
Full disclosure: I do not have a issue with changing procedure as long as the job does not suffer from what is expected.
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But if you skip the quality steps and get the job done faster it pays more.
The auto industry wants vehicles to be reliable enough... but not too reliable or that puts them out of business. If vehicles lasted forever there would be no more sales but if the car breaks down after a couple of years consumers upgrade regularly and you have a multi-billion dollar business.
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richfinn
Well-known member
Ok, I will explain it one more time
1. The times are set by the Car manufacturers not some
Independent shop owner with his head up his ***!!!
2. The times are there to protect the end consumer from
being overcharged by the dealer
3. Insurance/Lease/rental/fleet and VM warranty all
insist on using the VM book times
4. Proper workshops are equipped with the correct tools
to perform the tasks as per the VMs repair guides
and book times
I dont judge anybody, until I get to know them or how they operate, its just common sense
In my post(s), Bill, I mentioned doing that very thing.
And, again, I've already discussed this.
As mentioned, I'd prefer shops do the exact same thing.
Given all the hubbub that "the book" is a shop's tool, quoting book hours against a shop's hourly rate is just dumb. Just provide the customer a quote/estimate/whatever, and go from there.
richfinn
Well-known member
If you find a legitimate way of turning a 10hr job into a 1hr job, submit it to the Warranty dept and collect the reward and they will correct the book time.
I dont have a problem changing procedure, just be honest about it
teal95
Well-known member
1. Techs cut corners when working flat rate. Stuff like unbolting one end of the fuel tank strap and then just bending it out of the way instead of taking the other bolt out. This isn't very good for the life span of the strap but it usually lasts long enough that it isn't their problem.
2. The OEMs set the flat time hours. They have a team of very experienced mechanics do a lot of the jobs and time them. (I'm pretty sure some of their times are guesses, even if highly qualified they're still guesses.) So while each mechanic typically hasn't done that exact job before they've done a very similar repair on other vehicles from the same corporation. And these are very experienced mechanics.
2. The OEMs set the flat time hours. They have a team of very experienced mechanics do a lot of the jobs and time them. (I'm pretty sure some of their times are guesses, even if highly qualified they're still guesses.) So while each mechanic typically hasn't done that exact job before they've done a very similar repair on other vehicles from the same corporation. And these are very experienced mechanics.
richfinn
Well-known member
I'm not motivated by money/Toyota
richfinn
Well-known member
Agreed, but the thread started when somebody started microscopically analysing the bill and questioning the transparency of auto repair shops and parts mark up
richfinn
Well-known member
Your answers are very telling. I won't waste anymore of your time or mine.
The takeaway- an informed consumer is a shady shop's worse nightmare. I think this thread has given a pretty clear picture of what to look for in a good shop and bad shop.
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signcrafter
Well-known member
- Joined
- May 9, 2012
- Messages
- 12,325
But they did do that. They gave you a quote for a total price for parts and labor. At that point you can accept or walk away. If I remember right you weren't even complaining about the labor rate, just the part markup. But either way they do give a total quote. For some stupid reason its standard practice for shops to list the book time hours on the quote. Like you said it shouldn't be that way, customer doesnt need to know how a shop comes up with a price. They just need to know the total bill and compare that to other shops and can make an informed decision from there. Putting book time hours on the bill just confuses people like kctyphoon. They cant understand that book time is just a way to come up with an estimate, like any other industry. It's the same as shops that dont use flat rate, both shops come up with an quote based on how many hours they think the job will take. Then give customer a quote of a certain amount based on parts and labor.
An informed customer is a good thing for all honest shops. And just because a shop uses book time to come up with quotes doesnt make then dishonest. If a customer is informed and compares the total price of one shop to another and also the work of one shop to another that is great. It's when the customer is semi informed and starts saying they are getting ripped off because a shop uses flat rate hours instead of comparing total Bill's when things get all sideways.
The fact is book hours and flat rate are standard practice in the auto industry. Good, bad, or whatever, that's what most shops use to come up with quotes and pay techs. It's far from a perfect system but it's been the standard for many years and dont see it going away anytime soon.
In the end it's up to the customer to decide if the total price they were quoted is a good price or not. And decide which shop is going to give them the best quality work for the best price. The bad shops get weeded out and fall to the side and the good shops will earn repeat customers.
richfinn
Well-known member
Downwindtracker 2
Well-known member
I'm going to insult some mechanics here. Unless mechanics are a totally different breed of human being, even with salaried mechanics you are going to get the lazy corner cutting ones.