GIVE ME, BUY ME, TAKE ME!!

By:  Don Erwin –Summer of 1991 (does it still apply)???

 

 

Any parent will recognize those famous words.  Most employers must recognize those same words.  Now as warranty servicers, it seems that we also take the manufacturers to raise!  OH NO!  Enough is enough!

 

Point at hand is warranty parts profit.  When the vendor manufactured the parts and sold them to the manufacturer, they made a reasonable profit.  When sold to the distributor they made a reasonable profit, and when the distributor sold to the warranty servicer they made a reasonable profit.  Now I’m expected to stock, sell, hold, ship and wait for credit memos, just to break even and receive zero % profit.  The Song Beverly Consumer Act says, “I should also make a reasonable profit”.

 

As a large warranty servicer with approximately 50% of my service as warranty, and approximately 50% of my parts sales were warranty, which means 50% of my parts department staff time is spent on warranty parts.  (You have got to be kidding).  With parts research, plus processing, shipping, handling, debits memos, and making sure all credits are received for parts used in warranty repair, it’s about 70% of the time.

 

Facts:

 

1^st Quarter 1990 taxable parts were                         $40,300

1^st Quarter 1991 taxable parts were                         $43,000

1^st Quarter 1990 (warranty) taxable parts were       $24,000

1^st Quarter 1991 (warranty) taxable parts were       $42,500

 

That means more ordering, more stocking, more work on the employees in that department, still zero profit.  Wrong!!!  It’s really a loss, but when I try to figure a cost of doing business in order to renegotiate a rate for labor I’m told you cannot figure hat profit or (lack of it) on parts of the cost of doing business to figure warranty labor rates.  So who says give me, buy me, take me, doesn’t pay?

 

We keep hearing from most manufacturers those famous words “Red my lips”.  You are part of the team – this is a partnership between manufacturers and servicers.  You are part of the family!  Well, it’s a partnership I for one am no longer willing to be a silent partner.

 

What about your feelings on this subject?