Understanding other peoples logic

[Chris142]

This just drives me nuts. Whenever I do AC work on a customers car my boss will only order one 8oz bottle of AC oil.

So lets say I'm doing a major AC job and that car needs the whole 8oz bottle of oil.

An 8oz bottle of oil costs us $8.99.

Later that day I need more oil for a 2nd and maybe even a 3rd car. So we spend $26.97 for oil.

I can order a whole qt of oil for $15.99. Yes it costs us $7 more than the 8oz bottle but we get 4x as much oil for $7 more.

I will sometimes use a qt or more a day. My boss won't let me order the qt because he can't see the forest for the trees I guess. The qt will give us more profit in 2 ways. First it costs us less and 2nd I'm not standing around waiting for Napa to bring me oil.

He's always complaining about parts cost.

I will use it that day or in 2 days...It's not like we will have oil sitting around for months. Am I confused or is he wacky?

 

[The_Eric]

You're not alone. My boss does similar dumb things...

 

[daves87rs]

He's wacky...

 

[TylerL]

Your boss doesn't make any cents. I love buying in bulk, even if it takes me 5 years to use whole package/bottle/box/jug.

 

[Shannow]

You'll find two sorts of bosses...

That type, and we've had them that you had to return your old boots before he'd let you get a new pair, and have secretaries issue pens singly.

The other type would order a 205L drum of the oil because it was a bargain compared to single bottles.

There's a third type, somewhere in the middle, but they are very rare...then a beancounter makes them into the first type.

 

[rk1407]

He also might be worried about shrink. If inventory sits on the shelf it has a tendency to disappear. It might have been a problem on the past or present.

 

[Chris142]

Originally Posted By: rk1407
He also might be worried about shrink. If inventory sits on the shelf it has a tendency to disappear. It might have been a problem on the past or present.
Well theres only 2 of us so he can only blame me if I stole oil

Even if a few ounces were not accounted for he would still be ahead with the qt price.

 

[HTSS_TR]

The cost of 1 quart AC oil at $16 to him is too high, he may think that using only 8oz for 1 repair then discard the rest is a waste.

Have to explain to him that after using 8oz, you can seal/secure the remaining for other AC repair(s).

Also the cost per repair went down to $4 instead of $9 for buying 8oz bottle at a time, and not wasting your time waiting for delivery of another 8oz bottle.

My mechanic's wife is better at saving part cost. Whenever Costco has coupon for M1, she and her husband stop at Costco on the way home every day at around 6:00 PM and each buy 2-3 cases and check out separately. After the sale ended they had more than 50 cases of M1 that will lasted 2-3 months. She said buying M1 at Costco save her about $20-25 a case compares with buying from nearby parts store. Even she had to spend more than $1000 for syn oil up front and recoup the investment over a period of 2-3 months, she's looking at saving of more than $2/qt for 500-600 quarts is a good saving.

 

[jaj]

I'd venture that the profit the shop makes selling two bottles of oil at a higher price and mark-up is more than the shop would make on two 1/2 bottles of oil at a lower price and similar percentage markup.

No mystery here.

 

[JHZR2]

What does he care? If it costs $8.99, he is charging $16 for it.

Ill bet there are multiple parts orders coming in per day, so getting more, later is no big deal.

Could he make a few cents extra profit by ordering more bulk? Yes. Would it be easy to do since storing the quantities youre talking about arent extreme? yes.

Does it really matter because it will be delivered free and he will be making a profit on it.

 

[TooManyWheels]

Originally Posted By: jaj
I'd venture that the profit the shop makes selling two bottles of oil at a higher price and mark-up is more than the shop would make on two 1/2 bottles of oil at a lower price and similar percentage markup.


His shop isn't selling bottles, but repair services. If oil appears on the bill at all it would be as ounces, or just oil or supplies. So he has every incentive to minimize his cost per ounce.

 

[MNgopher]

Most places usually mark up their costs on parts and fluids. Guessing it doesn't matter to the owner the bigger bottle is cheaper per ounce if he makes more on the markup on the smaller bottles. If there's no markup, then it makes little sense.

My 2 cents...

I get the inventory/time wasted waiting for parts/fluids arguement though.

 

[Jeepster_nut]

Originally Posted By: Chris142
This just drives me nuts. Whenever I do AC work on a customers car my boss will only order one 8oz bottle of AC oil.

So lets say I'm doing a major AC job and that car needs the whole 8oz bottle of oil.

An 8oz bottle of oil costs us $8.99.

Later that day I need more oil for a 2nd and maybe even a 3rd car. So we spend $26.97 for oil.

I can order a whole qt of oil for $15.99. Yes it costs us $7 more than the 8oz bottle but we get 4x as much oil for $7 more.

I will sometimes use a qt or more a day. My boss won't let me order the qt because he can't see the forest for the trees I guess. The qt will give us more profit in 2 ways. First it costs us less and 2nd I'm not standing around waiting for Napa to bring me oil.

He's always complaining about parts cost.

I will use it that day or in 2 days...It's not like we will have oil sitting around for months. Am I confused or is he wacky?

He's just justifying his job. If he agreed with you it would make him more of a peer than a superior. I see it all the time at work. Its what bosses do...

 

[bradepb]

It could possibly be for some reason you are unaware of. I manage a shop and get certain "favors " for dealing with parts vendors in certain ways. Nothing unethical or illegal but there are certain perks.
Perhaps he gets points or something for every parts order over a certain dollar amount. I have seen a lot of promotions over the years that if you meet a certain criteria the vendor hands you a gift catalog to pick something out,common business practice.
I have gotten baseball tickets , Buck knives,food coupons, all kinds of stuff and my boss knows about it btw.

 

[Shannow]

Nothing unethical or illegal ???

Check your ethics at the door, as that sort of stuff gets you centre chair at the Independent Commission for Corruption down here.

 

[bradepb]

Its called a promotion here. All kinds of manufacturers do it and there salesmen. Monroe shocks, Bendix, Gates etc. If your shop sells certain products in certain amounts you get gifts, sometimes just the fourth shock free or something like that but often it is some sort of prize out of a catalog.
I am not talking about cash slipped in your pocket or flat out bribes, That would be severely frowned upon.

 

[The_Jeff]

Originally Posted By: rk1407
He also might be worried about shrink. If inventory sits on the shelf it has a tendency to disappear. It might have been a problem on the past or present.


This. Or "just in time delivery" or some other MBA horsehockey.

My wife's former consulting job never owned equipment; they rented everything they needed for one gig and billed everything to that one project. If they owned/ leased a pickup truck they'd have to bill it out at 3x its cost just like they would an employee's salary. Then when the truck sits idle it gets billed to "office overhead" and this looks bad, in suit-and-tie DB world. So they rent from Budget/Enterprise whenever they need wheels, and pass the cost plus bookkeeping on to the client.

I just started working at a tire shop and we have all these half quarts of Mobil 1 sitting on various horizontal surfaces. Obviously a customer paid for the whole quart but only used half. We're all too honest to embezzle them, apparantly, as they're building up dust. Wonder what charity case will eventually consume them.

We also have these throttle body cleaning kits all shrink wrapped with a little throwaway brush/swab thing and a couple different chemicals in little "shooter" sized bottles. Buy kit, use kit, toss that plastic in the trash. Yaaaay.

To the extreme, if you got a tylenol in a hospital they wouldn't just pull one out of a walmart sized jar of 300. There'd be a lengthy and expensive chain of custody for *your* pill.

 

[Tom NJ]

Most automotive aftermarket AC oils are polyol esters than have been dried to extremely low water levels, usually under 50 ppms, which is very dry for an ester. Once the can is opened, the dry esters will absorb water from the air pretty rapidly, although resealing within a few minutes will have no meaningful effect.

Some industrial users prefer to use an entire can rather than worry about storing an open can, although it is not really a problem for automotive use, and I suspect this is not what is driving your boss.

Tom NJ

 

[Chris142]

Theres no Spiffs or anything like that from our suppliers. Infact they often ask me why I bought 4 bottles in a day instead of a qt. Costs us less to buy a qt and costs them less to make 1 run to us instead of 4.

I seal the bottle up as soon as I pour out what I need(if theres any left)so moisture isn't much of an issue plus I'm in the desert with very low humidity.