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Shop costs and rates

To: triumphs@Autox.Team.Net
Subject: Shop costs and rates
From: RJUC40A@prodigy.com (MR SEAN F JOHNSON)
Date: Sun, 10 May 1998 14:31:52, -0500
[Caveats: This isn't directed at anyone in particular, and I'm not an 
accountant, mechanic, or business owner. ]

Something I see from time to time on these lists is an assumption 
that if a business wants $60 or $100 to do something a DIY'er can do 
for $5, it means the business is somehow "ripping you off."

While occasionally you do see shops trying to take advantage of the 
hobbyist, for the most part shops are simply trying to cover their 
costs and make a little profit.  Seen many mechanics or shop owners 
driving Mercedes?  I didn't think so.

The DIY'er only has to cover the cost of materials, and as any 
accountant will tell you, the materials are the least expensive part 
of most products.  Labor is usually what costs in most processes, and 
as anyone will tell you, painting is a LOT of labor followed by a 
short paint process.  Mechanical work on older cars with rusty bolts 
is also uncertain and difficult to estimate, as my wife will tell you 
["honey, it'll only take two hours, honest!]

Don't believe me?  Ask your employer about their "overhead rate" or 
"burden rate" .  These rates average in pay, insurance, benefits, 
heating/cooling, rent, etc. into a single per hour rate for 
estimating business costs.  I work in a manufacturing business that 
has an average burden rate in the $50's, and that is cheap!  I worked 
for an aerospace manufacturer with a rate over $100/hour.

The point is, most of the time businesses don't want to rip you off; 
some simply can't make money on small jobs, particularly if they are 
in a highly competitive market.    The amount of bookkeeping in a 
small job is the same for a big job, and as I've already mentioned, 
labor is the big part of the costs.   That doesn't excuse lousy or 
unethical businesses, but it should give you a little different 
perspective as to why hobbyists sometimes aren't welcome. 

 Anyways, you as a DIY'er can always do a better job than a 
professional if you have the equipment.  Why?  Because you have the 
luxury of time, something no professional can afford.

regards,
Sean Johnson
'75 Spitfire


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