Reasonable Parts Markup?

[alexb2000]

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.

I agree human nature is human nature. The negative feedback loop in automotive repairs is comebacks for the same problem or what the customer perceives is the same problem. That is why any system problem usually results in that system being significantly replaced and extra parts being added, not necessarily to screw the customer, but because not doing it has resulted in comebacks.

For example, diesel truck, customer complaint=slow starting, test batteries, one tests perfect, one is weak. Customer is usually told they need two new batteries. I explain and give them the choice.

Another, I just had a truck with one sides ball joints worn, the other tight as new. Maybe the country roads they drive on, IDK. I explained the situation and did new ball joints on both sides, BUT they were told there isn't any labor savings in doing so and one side was still good. Most shops would have just said you need.. ball joints, because it isn't worth the risk of a comeback.

 

[Shane6377]

Thats it, quit whilst the quittings good



Spoken like a true salary man

It's not worth my time... your posts up until now had been to support your views and I respect that but once you digress to ignorance and obstinance it's time to quit. I'm not going to change your views nor are you going to change mine.

We could go around and around but what's the point? At the end of the day you don't want my business because I'm critical of your practices and I would never take my vehicle to your shop because of those practices... and that's ok.

This thread has exposed some of the unethical practices within the auto repair industry and given a platform to discuss those issues and that was the purpose. Readers can look at the posts and make an informed decision. I know this only further reinforced the position that I held.

You can take all the jabs at me you want. It says more about you than it does about me.


Sent from my iPhone using The Garage Journal mobile app

 

[richfinn]

It's not worth my time... your posts up until now had been to support your views and I respect that but once you digress to ignorance and obstinance it's time to quit. I'm not going to change your views nor are you going to change mine.

We could go around and around but what's the point? At the end of the day you don't want my business because I'm critical of your practices and I would never take my vehicle to your shop because of those practices... and that's ok.

This thread has exposed some of the unethical practices within the auto repair industry and given a platform to discuss those issues and that was the purpose. Readers can look at the posts and make an informed decision. I know this only further reinforced the position that I held.

You can take all the jabs at me you want. It says more about you than it does about me.


Sent from my iPhone using The Garage Journal mobile app

No, I was polite until you suggested we are all thieving knuckledraggers because we dont agree with your self entitled views

You dont understand the flat rate system, you think its shop owners and techs trying to scam people

Complain to the vehicle manufacturers its the industry standard that they introduced

I have explained it to you in detail three seperate times

 

[richfinn]

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.

Pay systems dont decide if you behave like a criminal.

Good and bad in every job ��

 

[Downwindtracker 2]

It's just that salaried simply have less reason. It's always good to have them around for comparison, chuckle. .

 

[Shane6377]

No, I was polite until you suggested we are all thieving knuckledraggers because we dont agree with your self entitled views

You dont understand the flat rate system, you think its shop owners and techs trying to scam people

Complain to the vehicle manufacturers its the industry standard that they introduced

I have explained it to you in detail three seperate times

I never suggested you were all thieves. I've been quite complimentary of some shop owners.

I understand the flat rate system very well. It's an antiquated model that has been the industry standard for a long time and most shops use it because they don't know any better. You admitted yourself that you don't really understand the business impact of flat rate (#354).

It's clear you don't believe me so here's something from your industry: https://www.centerforperformanceimp...the-flat-rate-system-really-the-best-pay-plan


Sent from my iPhone using The Garage Journal mobile app

 

[protegeV]

I never suggested you were all thieves. I've been quite complimentary of some shop owners.

I understand the flat rate system very well. It's an antiquated model that has been the industry standard for a long time and most shops use it because they don't know any better. You admitted yourself that you don't really understand the business impact of flat rate (#354).

It's clear you don't believe me so here's something from your industry: https://www.centerforperformanceimp...the-flat-rate-system-really-the-best-pay-plan


Sent from my iPhone using The Garage Journal mobile app

I agree with most everything that was stated in the link you posted. Being at the top of the flat-rate food chain though, makes it hard to change.

The ones that bash it or flock to salaried fleet or maintenance jobs are the ones who can't cope with the system.

 

[richfinn]

I never suggested you were all thieves. I've been quite complimentary of some shop owners.

I understand the flat rate system very well. It's an antiquated model that has been the industry standard for a long time and most shops use it because they don't know any better. You admitted yourself that you don't really understand the business impact of flat rate (#354).

It's clear you don't believe me so here's something from your industry: https://www.centerforperformanceimp...the-flat-rate-system-really-the-best-pay-plan


Sent from my iPhone using The Garage Journal mobile app

I thought you had quit?

Welcome back, maybe you do want to learn

Its not antiquated if its still in operation and new job times are being added to the system as new vehicles are introduced, its necessary otherwise

How would you bill warranty work?

How would you bill fleet work?

How would an insurance assessment work?

How much would taxpayers be paying to fix government vehicles?

Its a tool of the trade, and what your failing to understand is the "book times" aren't dictated by small independent businesses or some guy off the street who wants a discount, they are set by the guys who design build repair and service the vehicles

So what you guys are saying is that you feel "flat rate" causes too much pressure on the tech and you would rather pay a little extra so he can take his time and make sure the job is 100% tip-top?

Thats awesome, just leave $100 and a little note on the dash as a tip

 

[2ndGearRubber]

Where does the idea of "flat rate", commission, or piece-meal pay causing low quality come from? If I do something wrong, I don't get paid to fix it. If it miss-quote or don't fully find all related repairs, I don't get paid for any subsequent repairs either.


Typically lazy people are lazy, quality concerned people are just that. IMO there's only one way to do it, and that's the correct way.





Also curious about how bending a steel gas tank strap will reduce the lifespan of said strap. If it's that ****** it needs replaced. What if I'm moving a wiring harness, and I unplug an unnecessary connector not required to adjust the harness? Am I wearing out the customers connectors?

Much like the tank strap, if basic components need ginger love and affection while being worked on, they are ready to fail and need replaced. I'm not talking about beating an A/C condenser with a hammer, but if I can't strap up an axle with a bungee cord, or pry down on a control arm to seat a ball joint, how to you expect to drive the car without it spontaneously exploding?

 

[Taycan]

It's clear you don't believe me so here's something from your industry:

Some interesting takeaways from that article:

"The entire concept is morally questionable when you think about it. "

"In California, where traditional flat rate is illegal, employees get flat rate plus minimum wage. Technicians there also get overtime and breaks, just like any other worker."

"flat rate techs never know what they’ll be paid"

 

[richfinn]

Some interesting takeaways from that article:

"The entire concept is morally questionable when you think about it. "

"In California, where traditional flat rate is illegal, employees get flat rate plus minimum wage. Technicians there also get overtime and breaks, just like any other worker."

"flat rate techs never know what they’ll be paid"

I got to the word "gravy" and gave up

 

[Shane6377]

I thought you had quit?



Welcome back, maybe you do want to learn



Its not antiquated if its still in operation and new job times are being added to the system as new vehicles are introduced, its necessary otherwise



How would you bill warranty work?



How would you bill fleet work?



How would an insurance assessment work?



How much would taxpayers be paying to fix government vehicles?



Its a tool of the trade, and what your failing to understand is the "book times" aren't dictated by small independent businesses or some guy off the street who wants a discount, they are set by the guys who design build repair and service the vehicles



So what you guys are saying is that you feel "flat rate" causes too much pressure on the tech and you would rather pay a little extra so he can take his time and make sure the job is 100% tip-top?



Thats awesome, just leave $100 and a little note on the dash as a tip

Everyone understands what book time is and who creates the times. Just because it's still being used doesn't mean it's a good system. The question is about the ethics of the practice.

It sounds like all you've ever known is flat rate and so you carry on without fully understanding the impact on customers and techs. Or worse, you understand and just don't care. How'd you put it... knuckledragger or thief?

Did you read the article?

"The basic concept behind the flat rate system is to keep mechanics hungry, so they’ll push themselves to the limit to flag hours. If these employees don’t work themselves to the bone, their families won’t eat. The entire concept is morally questionable when you think about it."

But I'm sure you'll respond by calling it horsesh*t or some other intelligent response like you've done before. Lol.


Sent from my iPhone using The Garage Journal mobile app

 

[richfinn]

Everyone understands what book time is and who creates the times. Just because it's still being used doesn't mean it's a good system. The question is about the ethics of the practice.

It sounds like all you've ever known is flat rate and so you carry on without fully understanding the impact on customers and techs. Or worse, you understand and just don't care. How'd you put it... knuckledragger or thief?

Did you read the article?

"The basic concept behind the flat rate system is to keep mechanics hungry, so they’ll push themselves to the limit to flag hours. If these employees don’t work themselves to the bone, their families won’t eat. The entire concept is morally questionable when you think about it."

But I'm sure you'll respond by calling it horsesh*t or some other intelligent response like you've done before. Lol.


Sent from my iPhone using The Garage Journal mobile app

No, What I want you to do is explain how

Warranty/Fleet/Insurance companies bills will be calculated for Labour under the new system and how will you get them to agree to it?

The only concept behind "book time" is how do you calculate a fair Labour rate for end consumers when you are a global Automotive company with thousands of dealerships selling the same products and services

Independent shops can by all means pay staff anyway they like its up to them (but mostly they dont because they want to compete with dealerships)

Your going to find though that many technicians want to specialize on one brand with the latest technology and cutting edge tools, those guys with experience and dedication get really good at fixing those vehicles and earn more money using the old manufacturers system

Now I'm confused if you want better pay and conditions for vehicle technicians or cheaper car repairs

I know you cant have both

Real answers would be appreciated this time, thanks

PS

I did read the article up to the "Gravy" comment before
I dismissed it as total horsesh*t!!!

 

[Yarpo]

Where does the idea of "flat rate", commission, or piece-meal pay causing low quality come from? If I do something wrong, I don't get paid to fix it. If it miss-quote or don't fully find all related repairs, I don't get paid for any subsequent repairs either.

Typically lazy people are lazy, quality concerned people are just that. IMO there's only one way to do it, and that's the correct way.

Bingo. I gave someone advice a few months ago and I noted, do it right the first time, because any time you spend fixing it or having someone else fix it is dead time. At my dealership if they give my comeback to another tech, the techs time spent fixing the problem could be docked from my time. Pretty terrible and ensures the tech wants to do it right.

Also curious about how bending a steel gas tank strap will reduce the lifespan of said strap. If it's that ****** it needs replaced. What if I'm moving a wiring harness, and I unplug an unnecessary connector not required to adjust the harness? Am I wearing out the customers connectors?

If you unplug it another few times, its got to be intentional negligence, you're intentionally wearing out the customers wiring connector so you can bank all that gravy work, you thieving scumbag mechanic! You should be sued for ruining the customers car! /s

Some interesting takeaways from that article:

"The entire concept is morally questionable when you think about it. "

"In California, where traditional flat rate is illegal, employees get flat rate plus minimum wage. Technicians there also get overtime and breaks, just like any other worker."

"flat rate techs never know what theyÂ’ll be paid"

I get paid a guarantee, close to 40k a year if I just stand around and polish my tools. I don't have to work on a car. Not sure how "They never know what they'll be paid" works...I also get overtime, and breaks. Got to love articles that paint with such a broad brush.

"The basic concept behind the flat rate system is to keep mechanics hungry, so theyÂ’ll push themselves to the limit to flag hours. If these employees donÂ’t work themselves to the bone, their families wonÂ’t eat. The entire concept is morally questionable when you think about it."

But I'm sure you'll respond by calling it horsesh*t or some other intelligent response like you've done before. Lol.

He might not call horeshit, but I will. As I pointed out to Taycan

I get a guaranteed check based on how many hours I'm in the shop. I clock in a 9:30, clock out at 6:00, take a 30 minute lunch and have two 15 minute breaks available to me whenever I want. No different than any other hourly or salary position. Crazy right? I can make close to 40k and not turn a single wrench. HOW WILL MY FAMILY EAT? THE HORROR, THE UNCERTAINTY? Or I could turn hours and make 50k, 60k, 70k or 120k, whatever. Not everyone is in a shop with a guarantee, but they exist and employ the flat rate system. What kinda conundrum does that create? Is it morally reprehensible as well?

As for breaks, that's part of the beauty of it to me, nobody cares what you're doing or when/where you are on break. Sucking oil out of a car? Make a phone call or wander the shop. Waiting on parts? Go to lunch, wander the shop...check on your parts, see if the cute receptionist is working. Need to stretch? Wander the shop. Take a smoke break. I find the freedom to be my favorite part, and think structured breaks is a negative for me personally. Can you take your 10:00 am and 2:00 pm breaks? Sure...do most guys? No. You can flag hours and not work your body to the bone, tho I will admit some of it gets old. Mounted, balanced and rotated 4 21" wheels with some big *** tires today on a GLS, a lot of wheel/tire to lift with my dainty arms. At least I know i'll be able to eat this week I suppose.

 

[Elsinore13]

A while back I was without someone to clean the shop and wash customers cars for a short while. A temp service had been coming around offering their services so I decided to give them a chance. They sent someone over and billed me $15.00 an hour for the employee. Imagine my horror when I found out they were only paying the employee $10.00 per hour! I mean I could have hired someone myself for 10 bucks an hour. The nerve of those people to mark up what they sold me 50%. Disgusting and thieving...





Sarcasm detectors will probably need to be recalibrated for some of you.

 

[Provincial]

I haven't read all of the posts in this thread, so this may have been mentioned before.

Les Schwab Tires, the merchant mentioned in the Original Post, is a family-owned business now into it fifth generation. The founder died in 2007, and he built the business on a reputation of hard work and fair dealing.

In December of 2019, the family announced that it had put the business up for sale. Local experience since the founder's death has indicated that the business has been straying from the founder's principles. Add this to the tendency to try to pump up the bottom line of a business prior to a sale, and you have experiences like the OP describes. When you are talking a $3 billion dollar enterprise value, this adds up! This operation has over 500 locations in 10 states, so it will be sold to a National, or perhaps a huge Regional chain, and lose any connection to local communities.

Meanwhile, a shop I patronize about a 1/2 mile away always charges what appears to me to be a reasonable markup. I get the same pricing as him from the same suppliers, so I have a pretty good idea of what these items cost him.

 

[Shane6377]

No, What I want you to do is explain how



Warranty/Fleet/Insurance companies bills will be calculated for Labour under the new system and how will you get them to agree to it?



The only concept behind "book time" is how do you calculate a fair Labour rate for end consumers when you are a global Automotive company with thousands of dealerships selling the same products and services



Independent shops can by all means pay staff anyway they like its up to them (but mostly they dont because they want to compete with dealerships)



Your going to find though that many technicians want to specialize on one brand with the latest technology and cutting edge tools, those guys with experience and dedication get really good at fixing those vehicles and earn more money using the old manufacturers system



Now I'm confused if you want better pay and conditions for vehicle technicians or cheaper car repairs



I know you cant have both [emoji6]



Real answers would be appreciated this time, thanks



PS



I did read the article up to the "Gravy" comment before

I dismissed it as total horsesh*t!!!

If warranty/fleet/insurance want to be billed by book time bill then that way. That doesn't mean you have to pay your techs that way.

Pay them a salary or hourly wage. Instead of rushing to beat book times they'll focus on quality. Your customers will be happier too because they get quality work done and won't have unnecessary charges being tacked on by a tech trying to flag some hours.

Estimate consumer car repairs as I suggested earlier with a tiered shop rate that takes into account the time and tech level as I suggested earlier (the one you agreed you liked).

You can still charge fair competitive prices for repairs. Wages are by far the biggest overhead of any business. On average, the shop labor rate is 3 times as much as a master tech makes. If you can't figure out how to make a profit with the remaining 2/3rds you shouldn't be in business.

So yes a good business owner can accomplish both.

Maybe you'll like this article more than the last one.
https://www.ratchetandwrench.com/articles/7677-flat-rate-pays-continued-unpopularity


Sent from my iPhone using The Garage Journal mobile app

 

[Shane6377]

He might not call horeshit, but I will. As I pointed out to Taycan

I get a guaranteed check based on how many hours I'm in the shop. I clock in a 9:30, clock out at 6:00, take a 30 minute lunch and have two 15 minute breaks available to me whenever I want. No different than any other hourly or salary position. Crazy right? I can make close to 40k and not turn a single wrench. HOW WILL MY FAMILY EAT? THE HORROR, THE UNCERTAINTY? Or I could turn hours and make 50k, 60k, 70k or 120k, whatever. Not everyone is in a shop with a guarantee, but they exist and employ the flat rate system. What kinda conundrum does that create? Is it morally reprehensible as well?
:

You're not paid by a flat rate system. You earn a base salary with incentive pay... which is exactly what the article you call horsesh*t suggested as an alternative to flat rate pay models. Smh.

I get the feeling some of you don't really know what your talking about.



Sent from my iPhone using The Garage Journal mobile app

 

[Taycan]

I get a guaranteed check based on how many hours I'm in the shop. I clock in a 9:30, clock out at 6:00, take a 30 minute lunch and have two 15 minute breaks available to me whenever I want. No different than any other hourly or salary position. Crazy right? I can make close to 40k and not turn a single wrench. HOW WILL MY FAMILY EAT? THE HORROR, THE UNCERTAINTY? Or I could turn hours and make 50k, 60k, 70k or 120k, whatever. Not everyone is in a shop with a guarantee, but they exist and employ the flat rate system. What kinda conundrum does that create? Is it morally reprehensible as well?

Dude, I hate to break it to you, but your not on a traditional flat rate system...

When your on flat rate, your only getting paid when your working. And each state is different. In California for example, flat rate mechanics are guaranteed minimum wage which is currently $12 or $13 an hour depending on how many employees, plus overtime

dir.ca.gov/letf/Automotive_Employer_Brochure.pdf

 

[Yarpo]

You're not paid by a flat rate system. You earn a base salary with incentive pay... which is exactly what the article you call horsesh*t suggested as an alternative to flat rate pay models. Smh.

I get the feeling some of you don't really know what your talking about.



Sent from my iPhone using The Garage Journal mobile app

I'll be honest and say I didn't see the suggestion as I stopped reading after the cons because I thought the article ended. The way it laid out on my phone there's a massive ad for "Ted Ings" playbook and it asked me to if I wanted to schedule a call with Ted. I do not want to call Ted.

That said I am paid flat rate on any hours ~38 and over?

Call it salary with incentive or flat rate with a guarantee, its all the same to me. I'm paid by flagging hours with a fail safe should there be no work or a slew of ****** jobs. I'm sorry I did not know the exact terms, I'm a mechanic, not a walking encyclopedia. Do you know the definition of every term in your field, despite the fact they may vary by employer, demographic, etc? I'd guess no...but that's neither here nor there and not worth arguing over. When I was hired they described it as flat rate with a guarantee, not "base pay plus - bonus system" - I've never heard that term, have you until you read that article? I'd still call it ******** and argue other points if you wish.

Dude, I hate to break it to you, but your not on a traditional flat rate system...

When your on flat rate, your only getting paid when your working. And each state is different. In California for example, flat rate mechanics are guaranteed minimum wage which is currently $12 or $13 an hour depending on how many employees, plus overtime

dir.ca.gov/letf/Automotive_Employer_Brochure.pdf

But its still a type of flat rate system. If a job takes me 3 hours and bills 1, I'm paid 1, and if it takes me 1 hour and bills 3, I'm paid 3. I'm still flagging hours and still flat rate. Every week I bill over 38 hours, i'm flat rate.

Every week I bill under ~38, I would be salaried. Considering sitting around collecting salary every week for months on end is a big no no, I need to flag hours, cut corners, over quote gravy work and screw everyone I can. Alas, flat rate. Sure its not traditional flat rate I suppose, I'll let the other flat rate guys argue then since I'm only like 75% flat rate, probably flagging hours ~40 weeks of the year not 52.

 

[epmills]

I get paid a guarantee, close to 40k a year if I just stand around and polish my tools. I don't have to work on a car. Not sure how "They never know what they'll be paid" works...I also get overtime, and breaks. Got to love articles that paint with such a broad brush.

He might not call horeshit, but I will. As I pointed out to Taycan

I get a guaranteed check based on how many hours I'm in the shop. I clock in a 9:30, clock out at 6:00, take a 30 minute lunch and have two 15 minute breaks available to me whenever I want. No different than any other hourly or salary position. Crazy right? I can make close to 40k and not turn a single wrench. HOW WILL MY FAMILY EAT? THE HORROR, THE UNCERTAINTY? Or I could turn hours and make 50k, 60k, 70k or 120k, whatever. Not everyone is in a shop with a guarantee, but they exist and employ the flat rate system. What kinda conundrum does that create? Is it morally reprehensible as well?

As for breaks, that's part of the beauty of it to me, nobody cares what you're doing or when/where you are on break. Sucking oil out of a car? Make a phone call or wander the shop. Waiting on parts? Go to lunch, wander the shop...check on your parts, see if the cute receptionist is working. Need to stretch? Wander the shop. Take a smoke break. I find the freedom to be my favorite part, and think structured breaks is a negative for me personally. Can you take your 10:00 am and 2:00 pm breaks? Sure...do most guys? No. You can flag hours and not work your body to the bone, tho I will admit some of it gets old. Mounted, balanced and rotated 4 21" wheels with some big *** tires today on a GLS, a lot of wheel/tire to lift with my dainty arms. At least I know i'll be able to eat this week I suppose.

We must work for the same dealer LOL. Identical situation at my dealer. The only time kinda get frowned upon is if we have an influx of waiters (at lunch time, of course) and are wandering around. FYI I got bored years ago and took a half worn wheel/tire into parts from a 164 GL550 and weighed it, IIRC it was 91 or 93 lbs. I have the same dainty arm syndrome and was curious.

As to salaried, once again, it is a joke. We had a few techs go into a salaried position in more of a manager roll a few years ago. You want to describe worthless... Stand around, whip the techs and tell them there is work, then go back and stare at the computer screen again. Like that is gonna get cars fixed.

 

[Yarpo]

We must work for the same dealer LOL. Identical situation at my dealer. The only time kinda get frowned upon is if we have an influx of waiters (at lunch time, of course) and are wandering around. FYI I got bored years ago and took a half worn wheel/tire into parts from a 164 GL550 and weighed it, IIRC it was 91 or 93 lbs. I have the same dainty arm syndrome and was curious.

As to salaried, once again, it is a joke. We had a few techs go into a salaried position in more of a manager roll a few years ago. You want to describe worthless... Stand around, whip the techs and tell them there is work, then go back and stare at the computer screen again. Like that is gonna get cars fixed.

If you're in Minnesota, might be! Looks like you're in Missouri tho haha. I really like the dealership I'm at, I've heard tons of horror stories about dealerships but to be honest, its really laid back. Our managers are pretty hands off and working on nice cars never *****. Waiters here seem to be so random, but yeah if its obviously waiter central, probably not the best time to run to lunch. 91 Lbs? Holy ****. I'm not sure that's feasible without a tire lift, haha. Darn flat rate tho, I could never use one of those! /s

These wheels/tires I did where off a 166 but ****...*****. I'd guess maybe 50 lbs?

 

[Dieselhammer]

20-30% is pretty much industry standard for heavy truck shops. Even though they may not stock everything and source it locally some sort of mark up is still needed because a tech or shop office guy might spend a half hour getting the run around on the phone with a new guy at the parts store or have to call many places before they can source one for that day which eats up valuable time that they could be wrenching at anywhere from $90-$175 an hour.

 

[richfinn]

You're not paid by a flat rate system. You earn a base salary with incentive pay... which is exactly what the article you call horsesh*t suggested as an alternative to flat rate pay models. Smh.

I get the feeling some of you don't really know what your talking about.



Sent from my iPhone using The Garage Journal mobile app

That style of flat rate doesnt address your complaint either, the tech will still be trying to flag as many hours as possible to make more money

If he is fast the shop are still "overbilling" customers in your opinion

Its no different

The fact is "book times" are here to stay

 

[Shane6377]

That style of flat rate doesnt address your complaint either, the tech will still be trying to flag as many hours as possible to make more money



If he is fast the shop are still "overbilling" customers in your opinion



Its no different



The fact is "book times" are here to stay

Sure it does. I don't want to put words in another man's mouth but look at Yarpo's comments. "I can stand around and polish my tools and make 40k". Doesn't sound like he's stressed to put food on the table. Also sounds like he's motivated to make more than his base so it's a win for him, his shop and his customers.

In most incentive based pay models approx 75% of an employees pay is salary/guaranteed. Most people can eat on 75% if they have a slow week. Incentives make up the remaining income. There is a lot less pressure to cut corners to make time or to tack on extra unnecessary work because only 25% of income is based on beating the book, not 100%.

Quality of work goes up and customers are happy. Techs are happier so they stay at their job and gain more experience which in turn makes them better. Shops deal with less turnover which is better for overall quality and the bottom line.


Sent from my iPhone using The Garage Journal mobile app

 

[Shane6377]

20-30% is pretty much industry standard for heavy truck shops. Even though they may not stock everything and source it locally some sort of mark up is still needed because a tech or shop office guy might spend a half hour getting the run around on the phone with a new guy at the parts store or have to call many places before they can source one for that day which eats up valuable time that they could be wrenching at anywhere from $90-$175 an hour.

I'm sure it's not normal to get a 30 min. runaround from a new parts guy. If it does you should be getting a new parts supplier. What does a normal part order phone call take? 1-2 minutes?

Also, the guy wrenching isn't making $90-175/hr. That's what his shop charges for labor. Statistically the guy wrenching is making $15-30/hr. on average.

When calculating markup you have to deal with real costs not opportunity costs.

If a shop orders a $50 part from the local Napa and it take a 5 minute phone call what's the real cost? In most cases Napa delivers the part for free and gives the shop a discount of say 15%. Assume our mechanic is making $20/hr.

5min = 0.08hr @ $20 = $1.60
$50 part at 15% discount = $42.50
Total real costs for part = $44.10

If the shop charges it's customer the original retail price of $50 the markup is just under 13%


If they charge an additional 20% markup over retail ($60) the actual markup is 36%.

A customer doesn't get the parts discount so they need to view markup from their actual costs. In the example, retail is $50 so that's a 0% markup to a customer.

"Fair" is subjective. Is it fair to pay an additional 20% markup over retail knowing the shop is making 36%?


Sent from my iPhone using The Garage Journal mobile app

 

[setfocus]

I wish I had a garrante. The shop is dead, I made $37 Wed, $55 yesterday, and $10 so far today. Haven't even cleared $300 for the week yet.

To make matters worse, corporate made some BS rule that auto techs need 48 hours at the shop or they loose vacation and the manager gets in trouble. So now when it's dead, someone can't even leave early.

Hourly employees can't have over 40 hours but they'll make the techs stay. God forbid someone has to leave a car overnight in case it goes from dead to busy out of nowhere and we can't get the work done because a tech left early

Sent from my SM-G920V using The Garage Journal mobile app

 

[protegeV]

I wish I had a garrante. The shop is dead, I made $37 Wed, $55 yesterday, and $10 so far today. Haven't even cleared $300 for the week yet.

To make matters worse, corporate made some BS rule that auto techs need 48 hours at the shop or they loose vacation and the manager gets in trouble. So now when it's dead, someone can't even leave early.

Hourly employees can't have over 40 hours but they'll make the techs stay. God forbid someone has to leave a car overnight in case it goes from dead to busy out of nowhere and we can't get the work done because a tech left early

Sent from my SM-G920V using The Garage Journal mobile app

Sounds like you need a change of scenery. I made more than your entire week before lunchtime on Monday.

 

[nicks78camaro]

Who do you work for? I'm a service manager for Pep Boys, and we offer 50% guarantee for flat rate techs. We DO NOT mess with benefits if you are below 100% productive.

 

[nicks78camaro]

I wish I had a garrante. The shop is dead, I made $37 Wed, $55 yesterday, and $10 so far today. Haven't even cleared $300 for the week yet.

To make matters worse, corporate made some BS rule that auto techs need 48 hours at the shop or they loose vacation and the manager gets in trouble. So now when it's dead, someone can't even leave early.

Hourly employees can't have over 40 hours but they'll make the techs stay. God forbid someone has to leave a car overnight in case it goes from dead to busy out of nowhere and we can't get the work done because a tech left early

Sent from my SM-G920V using The Garage Journal mobile app

Who do you work for? I'm a service manager for Pep Boys, and we offer 50% guarantee for flat rate techs. We DO NOT mess with benefits if you are below 100% productive.

 

[Yarpo]

Sure it does. I don't want to put words in another man's mouth but look at Yarpo's comments. "I can stand around and polish my tools and make 40k". Doesn't sound like he's stressed to put food on the table. Also sounds like he's motivated to make more than his base so it's a win for him, his shop and his customers.

In most incentive based pay models approx 75% of an employees pay is salary/guaranteed. Most people can eat on 75% if they have a slow week. Incentives make up the remaining income. There is a lot less pressure to cut corners to make time or to tack on extra unnecessary work because only 25% of income is based on beating the book, not 100%.

Quality of work goes up and customers are happy. Techs are happier so they stay at their job and gain more experience which in turn makes them better. Shops deal with less turnover which is better for overall quality and the bottom line.


Sent from my iPhone using The Garage Journal mobile app

I'm being a bit hyperbolic, as I can't just stand around and do nothing for weeks on end. I'd be fired eventually. **** even after two bad weeks in a row the service manager gets a little anxious and starts asking whats happening. He wants you producing so he can be paid. Everyone here wants you to produce, we all make more money that way. That said it's great for slow weeks or the odd week with a bunch of new/tough jobs. I'd say most techs can produce more than ~38 hours and if you regularly cant, they're going to find someone who can. I've been here 6 months and its my first dealership so there was a step learning curve coming from an independent shop and I produce ~75% of the weeks and that'll only improve.

I wish I had a garrante. The shop is dead, I made $37 Wed, $55 yesterday, and $10 so far today. Haven't even cleared $300 for the week yet.

To make matters worse, corporate made some BS rule that auto techs need 48 hours at the shop or they loose vacation and the manager gets in trouble. So now when it's dead, someone can't even leave early.

Hourly employees can't have over 40 hours but they'll make the techs stay. God forbid someone has to leave a car overnight in case it goes from dead to busy out of nowhere and we can't get the work done because a tech left early

Sent from my SM-G920V using The Garage Journal mobile app

I'd recommend a new shop. Lots of places with a guarantee, and lots of places with steady work. Find one with both or at least one or the other. We've been so busy we've had mandatory overtime (only 2 hours a week, 1 before or after your shift, two days a week) 50% of the time since I started.

 

[jacked_72]

I picked up a 2002 Honda Civic that had some Kwik Kar service records in the glove box. They replaced the catalytic converter with an aftermarket cat that just bolts in. That's five bolts. $1,299 for the part and 2.5 hours at $110 per hour. The cat can be had on line for about $100. Figure it was $300 from O'Reillys. What's that markup? 4.33 time. That seems incredibly excessive since at that price you're in the OME range. Oh, and $35 for shop fees.

They also changed out cam and crank seals. Labor 5 hours. Part price $51 per seal. Probably around $10-12 if you bought them at the dealer. Another nice markup. The 4 spark plugs for $71 and 1.4 hours seems like a bargain in comparison.

 

[richfinn]

Sure it does. I don't want to put words in another man's mouth but look at Yarpo's comments. "I can stand around and polish my tools and make 40k". Doesn't sound like he's stressed to put food on the table. Also sounds like he's motivated to make more than his base so it's a win for him, his shop and his customers.

In most incentive based pay models approx 75% of an employees pay is salary/guaranteed. Most people can eat on 75% if they have a slow week. Incentives make up the remaining income. There is a lot less pressure to cut corners to make time or to tack on extra unnecessary work because only 25% of income is based on beating the book, not 100%.

Quality of work goes up and customers are happy. Techs are happier so they stay at their job and gain more experience which in turn makes them better. Shops deal with less turnover which is better for overall quality and the bottom line.


Sent from my iPhone using The Garage Journal mobile app

Not in my experience of that system

The less able techs get all "the gravy" to keep them busy and pay for the salary guarantee, they then end up making the most money selling work thats not required to avoid the tough jobs and stay on the "gravy train"

The more able technicians who can do engine/gearbox work and electrical diagnosis efficiently get screwed sorting out the "problem jobs"

The former group get promoted to management and quickly dump any pretention of being "technicians" and the shop rapidly becomes a money grabbing sales target hell hole

The latter group leave the business in disgust to set up as independent brand specialists and clean up fixing the sh*t the dealer is no longer capable of fixing

That is basically how socialism works, the talent subsidize the lazy (I cant believe I'm even having this debate with Americans!!!!!!)

I can think of a better system for a business to reward honest loyal productive technicians in a fair way

Make them junior partners/shareholders and give them a percentage of profit with a view to taking over the business when you retire, or selling the shares back to the business to fund their retirement

Thats an incentive, that promotes quality and performance and avoids bad management because you have a workable career progression

This never happens of course because the nice honest shop owner from the 1970s leaves the business to his obnoxious money grabbing spoilt brat kids, who promote the unskilled gravy suckers and destroy everything that the old guy with morals stood for when the shop was truly "flat rate" and everybody had to pull their weight.

Coincidentally we have the National Minimum wage which is mandatory and ensures everybody gets paid a minimum salary, this has created a massive recruitment problem for the trades, because a kid straight out of school can get the same money at McDonalds or ASDA (Walmart) without having to spend £££££££ on tools or spend 3 years at our equivalent of trade school

Salary plus incentive is how you pay salesmen!!!

You pay a tradesman for his time/knowledge/skills

 

[czgunner]

Pretty normal to get 50-400%. Larger cost usually has a lower markup.

 

[richfinn]

I picked up a 2002 Honda Civic that had some Kwik Kar service records in the glove box. They replaced the catalytic converter with an aftermarket cat that just bolts in. That's five bolts. $1,299 for the part and 2.5 hours at $110 per hour. The cat can be had on line for about $100. Figure it was $300 from O'Reillys. What's that markup? 4.33 time. That seems incredibly excessive since at that price you're in the OME range. Oh, and $35 for shop fees.

They also changed out cam and crank seals. Labor 5 hours. Part price $51 per seal. Probably around $10-12 if you bought them at the dealer. Another nice markup. The 4 spark plugs for $71 and 1.4 hours seems like a bargain in comparison.

This is the problem, no way are those factory book times thats just some indy or chain shop pulling numbers out of a hat!!!

It would of been way cheaper at a Honda dealer on real flat rate!!!!

 

[Shane6377]

Not in my experience of that system

The less able techs get all "the gravy" to keep them busy and pay for the salary guarantee, they then end up making the most money selling work thats not required to avoid the tough jobs and stay on the "gravy train"

The more able technicians who can do engine/gearbox work and electrical diagnosis efficiently get screwed sorting out the "problem jobs"

The former group get promoted to management and quickly dump any pretention of being "technicians" and the shop rapidly becomes a money grabbing sales target hell hole

The latter group leave the business in disgust to set up as independent brand specialists and clean up fixing the sh*t the dealer is no longer capable of fixing

That is basically how socialism works, the talent subsidies the lazy (I cant believe I'm even having this debate with Americans!!!!!!)

I can think of a better system for a business to reward honest loyal productive technicians in a fair way

Make them junior partners/shareholders and give them a percentage of profit with a view to taking over the business when you retire, or selling the shares back to the business to fund their retirement

Thats an incentive, that promotes quality and performance and avoids bad management because you have a workable career progression

This never happens of course because the nice honest shop owner from the 1970s leaves the business to his obnoxious money grabbing spoilt brat kids, who promote the unskilled gravy suckers and destroy everything that the old guy with morals stood for when the shop was truly "flate rate" and everybody had to pull their weight.

Coincidentally we have the National Minimum wage which is mandatory and ensures everybody gets paid a minimum salary, this has created a massive recruitment problem for the trades, because a kid straight out of school can get the same money at McDonalds or ASDA (Walmart) without having to spend £££££££ on tools or spend 3 years at our equivalent of trade school

Salary plus incentive is how you pay salesmen!!!

You pay a tradesman for his time/knowledge/skills

Sigh... tough to know where to begin with this one.

You clearly don't have a very good understanding of some basic economic principals.

A socialist economy is built on the principal that a workers worth come from the time they work not the value of what they produce. It distributes wealth based on need and since everyone's fundamental needs are the same everyone is compensated the same.

In a socialist economy all techs would get paid the same no matter what skill level or how much they produced. It doesn't matter if they're a lube tech or a master tech or if they do hard jobs or easy jobs. If they work the same amount of time they get the same amount of pay.

In a base+incentive pay system, base pay varies depending on skill and experience and incentives vary on productivity. This directly opposes socialist principals.

You are correct that an ISO is a proven effective incentive model... for corporations with stock. Lol. Your nice shop owner from the 70's isn't running a corporation and the value of his business doesn't grow enough over time to support shareholders. When he retires he's giving the fruits of his labors to his family, not his employees. It has nothing to do with flat rate pay. Smh.

The minimum wage- it's a fundamental law of economics that to stimulate one group (workers) you have to suppress another (businesses). It's not surprising as a business owner that you are opposed to a higher minimum wage. Other than that, I'm not really sure what point you're trying to make. This has nothing to do with any of the topics being discussed.



Sent from my iPhone using The Garage Journal mobile app

 

[czgunner]

Sigh... tough to know where to begin with this one.

You clearly don't have a very good understanding of some basic economic principals.

A socialist economy is built on the principal that a workers worth come from the time they work not the value of what they produce. It distributes wealth based on need and since everyone's fundamental needs are the same everyone is compensated the same.

In a socialist economy all techs would get paid the same no matter what skill level or how much they produced. It doesn't matter if they're a lube tech or a master tech or if they do hard jobs or easy jobs. If they work the same amount of time they get the same amount of pay.

In a base+incentive pay system, base pay varies depending on skill and experience and incentives vary on productivity. This directly opposes socialist principals.

You are correct that an ISO is a proven effective incentive model... for corporations with stock. Lol. Your nice shop owner from the 70's isn't running a corporation and the value of his business doesn't grow enough over time to support shareholders. When he retires he's giving the fruits of his labors to his family, not his employees. It has nothing to do with flat rate pay. Smh.

The minimum wage- it's a fundamental law of economics that to stimulate one group (workers) you have to suppress another (businesses). It's not surprising as a business owner that you are opposed to a higher minimum wage. Other than that, I'm not really sure what point you're trying to make. This has nothing to do with any of the topics being discussed.



Sent from my iPhone using The Garage Journal mobile app

Very well said.

 

[Shane6377]

This is the problem, no way are those factory book times thats just some indy or chain shop pulling numbers out of a hat!!!



It would of been way cheaper at a Honda dealer on real flat rate!!!!

Book time = the estimated time a repair should take an average tech.

Flat rate = a payment method in which an employee gets paid by the job not by an hourly rate for the actual time a job takes. Flat rate uses book times to set a value for a job.

What you mean is that it would have been cheaper using a Honda dealers book time to figure the bill vs. an Indy or chain pulling numbers out of a hat.

An employees compensation has no direct correlation to how a customer is billed.

I hate to keep correcting you but this thread isn't going to go anywhere if you keep posting this misinformation.


Sent from my iPhone using The Garage Journal mobile app

 

[richfinn]

Sigh... tough to know where to begin with this one.

You clearly don't have a very good understanding of some basic economic principals.

A socialist economy is built on the principal that a workers worth come from the time they work not the value of what they produce. It distributes wealth based on need and since everyone's fundamental needs are the same everyone is compensated the same.

In a socialist economy all techs would get paid the same no matter what skill level or how much they produced. It doesn't matter if they're a lube tech or a master tech or if they do hard jobs or easy jobs. If they work the same amount of time they get the same amount of pay.

In a base+incentive pay system, base pay varies depending on skill and experience and incentives vary on productivity. This directly opposes socialist principals.

You are correct that an ISO is a proven effective incentive model... for corporations with stock. Lol. Your nice shop owner from the 70's isn't running a corporation and the value of his business doesn't grow enough over time to support shareholders. When he retires he's giving the fruits of his labors to his family, not his employees. It has nothing to do with flat rate pay. Smh.

The minimum wage- it's a fundamental law of economics that to stimulate one group (workers) you have to suppress another (businesses). It's not surprising as a business owner that you are opposed to a higher minimum wage. Other than that, I'm not really sure what point you're trying to make. This has nothing to do with any of the topics being discussed.



Sent from my iPhone using The Garage Journal mobile app

1. Your confusing socialism with communism

2. I'm not a business owner, which I have made clear
you obviously dont read what people have to say
because your opinion is the only one that
matters (seen that before in certain managers )

3. It's quite common for small businesses to make
employees partners or stakeholders you dont have to
be a listed corporation, it was in fact commonplace in
Europe for an apprentice to eventually become the
master when his boss retired, also popular amongst
the legal and medical professions

4. I have a great understanding of Economics, but thanks
for your concern

5. You pay a tradesman for his time/knowledge/skill
paying him a "sales" incentive because you dont want
to pay him correctly for his time does not promote
quality, it promotes Brake Rotor Sales and flushing
services (usually when targets need to be met to
achieve the incentive)

7. Seriously, dont give anything to your kids apart from a
decent education, it will absolutely ruin them, make
them work for it (flat rate preferably so they can
understand how economics really work)

Question: are you a union shop??

 

[richfinn]

1. Economically speaking, socialism and communism are very similar. The difference is the ideology on how to achieve the economy. Communism suggests an violent uprising of the lower class is needed to achieve a communist state while socialism believes in a democratic reform of government... not it's overthrow. Base+incentive pay supports neither of these ideologies. That's getting dangerously close to talking politics so that's all the more I'll say on that.

2. What? When did you post that you're not a business owner? That does explain a lot though.

3. You realize that ISO's are different than partnerships right? Legal and medical professionals buy into a business. It's not incentive pay for their performance. When you're invited to be a partner in a company they don't just give you half... you pay for it.

4. Clearly. Lol.

5. Not sure what point your trying to make here. Yes you pay a tradesman for his time/knowledge/skill. That's the objective of all compensation. Incentive pay rewards an outcome or objective but that isn't necessarily sales. So we're clear, flat rate is an incentive based pay system.

6. Hello... number 6 where are you?

7. Umm... ok? I don't really want to get into telling people how to raise their kids. I've got my hands full here.

No I am not a union shop. Nor do I work for a union. Why do you ask?



Sent from my iPhone using The Garage Journal mobile app

Sorry, I deleted number 6 i

I'll do you a deal

You keep posting how great you are at business and "basic" economics (whatever that means) and how you can cure the "Automotive Industry" with your awesome new pay system (where you cant or wont actually explain how you arrive at the Labour costs without using approved book times) but your going to guarantee me 75% of my current earnings to slow down and if I'm nice to you and dont make you feel sad , I can have the other 25% of my money as a bonus if I'm lucky (or something, its a bit hazy)

And I wont bother reading it, because I've heard it all before from people wearing cheap suits with name tags on who couldn't pass a doughnut shop let alone a Master technician certification

With that, I will gracefully bow out of this engaging but ridiculous debate