New Shop In Town

[BlueOvalFitter]

We are not being elitist. We recognize that certain areas have a lower cost of living, but there comes a point where a legitimate, full-time professional shop (with all of the necessary tools, licensing and administrative costs) cannot price services below a certain point and still be sustainable.

The prices you quoted are either:

1) New business specials
2) A shop that does not have insurance, work comp, software subscription costs, etc.
3) A shop that is really a side-business for someone and is not a long-term career.
4) Charging an outrageous amount for the real repairs being upsold.
5) All of the above.

Should I have the owner contact you to "QUELL" your thoughts/concerns?

 

[Chris142]

How much is the hourly rate?

 

[BlueOvalFitter]

How much is the hourly rate?

You are asking me Q?'s I don't know the answers to.
I will put this in a perspective that even a 5 year old will understand.........we are a poor Parish. In fact, of the 64 Parishes in La. we are the poorest. This is a farming community that just gets by. The nearest town that does the basic things this little shop does is 17 miles away. I too, at one time wanted to open a small shop similar to this one, but to do OCI's only. Look at some of my old posts where myself, my cousin, and my friend, were doing OCI's for my complex tenants, FREE! There were members here donating oil and filters to help the cause.
I just merely made a post about a small business that opened to help out the locals. I guess I should have gone into more detail explaining our living situation here and as to why this family did this.

 

[OilMagnate]

All fair points.
Just to put it in perspective, labor rates locally range from $160-$240/hr. Most are in the $190-$200/hr range. Independents are on the lower end of that range for labor, but are much heavier on parts mark-up than the dealers.

$160-240/hr?!? CA is a strange place... Our flagship dealers here don't even charge $160/hr.

 

[Job]

$12 labor is $12 more than nothing. If it was easy enough I might change someone’s oil for $12.

 

[spasm3]

I'm guessing this is a new business special. Not a bad idea. Get customers in the first time, get to know them. $12 is better than the guys standing around getting paid for nothing, until the volume picks up. I don't see that as a long term price.

 

[D60]

I understand OP's point and I really like the small-timey What's-Liability?? shops that'll still offer to throw a tube in a radial with a bad sidewall. Then again I'm the type of consumer that will understand what it means if I'm running a tube

 

[The Critic]

$160-240/hr?!? CA is a strange place... Our flagship dealers here don't even charge $160/hr.

I have a bill on my desk right now for $234.87/hr from a Ford dealer. This dealer probably bumps their labor rate (as time increases) on larger jobs, which isn't uncommon. But that's an example for you.

 

[Dave Hess]

Do you own a shop or work out of your home ?

 

[Hall]

For example, the labor for changing the oil & filter that the customer provides may start at $12. Certain vehicles may be extra cost, as we all know that some oil filter placement are in the most inconvenient locations. Or what about vehicles that need the plastic under panels removed in order to perform an oil & filter change.

And oil changes that start at $18.95 may just be drain/refill of oil w/ NO filter. And I've seen here locally, similar prices for an OCI for $14.99. But it was for a D&F and only 4 qts of oil. The filter and any additional qts of oil are extra.

And though a tire plug may be-$8 and a inside patch-$12, what about the labor in finding the leak if it's not obvious. Like dunking the tire in the water tank to find the leak. Or the dismount, proper cleaning of the inside of the tire & remount and balance of the tire after the patch is installed.

The reality is, and it doesn't matter how "poor" of an area BlueOvalFitter, or anyone, lives in, at the prices that place is charging, they simply won't survive unless it's done as a hobby. I suspect shops don't make money on $20 oil changes, let alone $10-12 BYO-parts prices - those are loss leaders jobs and they'll try and get add'l work out of a customer (even if it's just good maintenance work). Even bulk oil at $2/quart x 5 is $10. Add in a no-label oil filter for $3, that leaves $7. People will say "I can change my oil and filter in 5 minutes" and they're full of it. The clock starts when you take the keys and walk to the vehicle not once it's up in the air, shielding is removed, etc and doesn't end until it's back on the ground and the oil level has been checked. If it takes 20 minutes, paying someone $10/hour, labor is $3.50, leaving $3.50. Didn't include the "costs" related to running the business. Then, you better have (3) cars lined up per hour x 6+ hours a day to keep that person working.

 

[Chris142]

$160-240/hr?!? CA is a strange place... Our flagship dealers here don't even charge $160/hr.

That is what it takes to just keep the doors open with all the fee's permits etc.

 

[Nick1994]

That's awesome! I too am not sure how they keep the lights on, but I'd be glad to go there for some work, but I'd leave a good tip too.

 

[BlueOvalFitter]

The reality is, and it doesn't matter how "poor" of an area BlueOvalFitter, or anyone, lives in, at the prices that place is charging, they simply won't survive unless it's done as a hobby. I suspect shops don't make money on $20 oil changes, let alone $10-12 BYO-parts prices - those are loss leaders jobs and they'll try and get add'l work out of a customer (even if it's just good maintenance work). Even bulk oil at $2/quart x 5 is $10. Add in a no-label oil filter for $3, that leaves $7. People will say "I can change my oil and filter in 5 minutes" and they're full of it. The clock starts when you take the keys and walk to the vehicle not once it's up in the air, shielding is removed, etc and doesn't end until it's back on the ground and the oil level has been checked. If it takes 20 minutes, paying someone $10/hour, labor is $3.50, leaving $3.50. Didn't include the "costs" related to running the business. Then, you better have (3) cars lined up per hour x 6+ hours a day to keep that person working.

I think he and his wife make their money on detailing. He worked for an AWESOME shop in Baton Rouge. That shop is ULTRA high end. Their basic wash starts at $75 (hand wash, vacuum, and FOO FOO juice on the tires)! I brought my truck their for an estimate on removing some basic swirl marks and they quoted me $500 +! All I saw in their shop were BMW's, Mercedes, Jags, a Ferrari, and a helicopter on a trailer! Yes, they were detailing a trailered in helicopter!
Their kids are in school during the week and help on the weekends.

 

[Timmastertech]

****, a 5 quart oil change on a GM, Ford or Chrysler with a spin on filter and conventional oil costs me 17.25 in materials. Imports are a couple bucks more

 

[OilMagnate]

I think he and his wife make their money on detailing.

This. And if they cut expenses while still getting quality product like us, then both.

 

[OilMagnate]

****, a 5 quart oil change on a GM, Ford or Chrysler with a spin on filter and conventional oil costs me 17.25 in materials. Imports are a couple bucks more

Out of curiosity, why are imports more? My guess would be the filter cost. All of mine cost almost the same except for one or two select filters (NAPA Gold 1358 and 100283).

 

[OilMagnate]

This dealer probably bumps their labor rate (as time increases) on larger jobs, which isn't uncommon.

See, this is yet another example of why the industry isn't respected. The job is pre-calculated. They don't pay technicians any more for bigger jobs (assuming no overtime). That's why flag hours exist. Time literally never changes. An hour is an hour everywhere on Earth. If anything, the labor rate should decrease when charging for a larger job due to higher volume of work hours (more total dollars in the shop's pocket versus a simple job for anyone confused). You don't go to Costco or Sam's expecting to pay more because you want to give them more money than the average shopper. So why would you pay a shop more for a larger job?

Don't get me started on "shop supplies" extortion...

 

[Timmastertech]

Out of curiosity, why are imports more? My guess would be the filter cost. All of mine cost almost the same except for one or two select filters (NAPA Gold 1358 and 100283).

We use OE filters only. Delco, Motorcraft an Mopar spin ons cost me 3 bucks a filter. Toyota filters cost me 3.74, Honda costs me 5.84, Kia/Hyundai spin on costs me 4.99, Nissan costs me 5.53

 

[The Critic]

See, this is yet another example of why the industry isn't respected. The job is pre-calculated. They don't pay technicians any more for bigger jobs (assuming no overtime). That's why flag hours exist. Time literally never changes. An hour is an hour everywhere on Earth. If anything, the labor rate should decrease when charging for a larger job due to higher volume of work hours (more total dollars in the shop's pocket versus a simple job for anyone confused). You don't go to Costco or Sam's expecting to pay more because you want to give them more money than the average shopper. So why would you pay a shop more for a larger job?

There are a few reasons.

1) The larger the repair job, the more inefficiencies there will be. For example, it is much more difficult to consistently meet book time on an engine replacement versus a brake job. The bump in labor rate with each hour (e.g. first hour $100, second hour $105, etc.) should help absorb some of this.

2) A large 10 hr repair job has a fixed amount of revenue. In the 10 hrs (or more) that the service bay is tied up, there could have been a few maintenance tickets (30/60/90 service, T-Belt, etc.) with more opportunity to find additional revenue. Again, the bump in labor rate helps absorb some of the opportunity cost.

3) In theory, a long repair job is usually a more complex job that requires an A or B level technician to perform the work. Those technicians are paid more. The bump in labor rate may absorb some of this.

 

[OilMagnate]

There are a few reasons.

1) The larger the repair job, the more inefficiencies there will be. For example, it is much more difficult to consistently meet book time on an engine replacement versus a brake job. The bump in labor rate with each hour (e.g. first hour $100, second hour $105, etc.) should help absorb some of this.

2) A large 10 hr repair job has a fixed amount of revenue. In the 10 hrs (or more) that the service bay is tied up, there could have been a few maintenance tickets (30/60/90 service, T-Belt, etc.) with more opportunity to find additional revenue. Again, the bump in labor rate helps absorb some of the opportunity cost.

3) In theory, a long repair job is usually a more complex job that requires an A or B level technician to perform the work. Those technicians are paid more. The bump in labor rate may absorb some of this.

We'll have to agree to disagree here. Your reasoning makes sense if you think like a predatory dealership, but none of the above can be justified if you're trying to do the right thing and make honest money. If I ever go to a shop that has increased rates over longer time periods, I'd ask them if they knew the Burt Reynolds quote where he asks if two letters mean anything to you...

If you can't make ends meet charging $240/hr, you just need to hang it up.