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Re: Shop costs and rates

To: MR SEAN F JOHNSON <RJUC40A@prodigy.com>
Subject: Re: Shop costs and rates
From: Justin Wagner <jmwagner@greenheart.com>
Date: Sun, 10 May 1998 12:03:03 -0700
Cc: Triumph News Group <triumphs@Autox.Team.Net>
Organization: J.M.Wagner Sales, Ltd.
References: <199805101831.OAA11328@mime3.prodigy.com>
This is all true. And it's very important for enthusiasts to consider
this when they take their car to a mechanic. 

Nevertheless, there's not much mystery in sandblasting that control arm
John Doe brings in... but he has to respect that the shop has to have a
minimum, to cover the costs of the paperwork, and transaction time with
the client, etc....  So John Doe used to be stuck...  He either had to
try to find more items to bring in... or maybe get them to go under
their minimum... at which time... the shop owner says, "Ok, we'll do it
for $60.00."  And John, happy to hear he doesn't have to pay $100.00,
goes for it.   Fortunately, John now has options.  And since the Pro
shops can't afford to do these little jobs... they should be happy to
see less and less of them come in... thanks to the home process... on
the other hand...a lot of them kind of liked those little cash
transactions that they slid into the production line... and let them
take $60.00 here and there... on a conrol arm, etc.

Those pro powder coating shops that used to find a significant part of
their business was the home hobbyist... is now going to find that they
will either have to lower their prices and try to cater a little more to
the small jobs... OR... they will have to accept that they're going to
see less and less of that supplemental income! No mystery  here.  No
conspiracy... Just supply and demand... and competition.

I'm glad to hear that you have confidence that DIY'ers can do a better
job, as they have the luxury of time... and, of course, their heart is
in the product...   This might off-set those "industrial processes"
mentioned earlier...  and the idea that they're more likely to just
"botch" the job. 

--Justin 


R SEAN F JOHNSON wrote:
> 
> [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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