A Service Department Perspective

[sled_guy]

I suppose business owners can justify it all they want and I'm not going to say some of the things being thrown around here aren't valid. But from a consumer standpoint, let's take an example of a Polaris snowmobile that has a speedo side drive shaft bearing go bad. It doesn't ruin anything, he catches it early enough because the speedo stopped working because the speedo cable end broke.

He takes it in to his local Polaris dealer.

Said dealer says it's going to take 3 hours to fix it... ok, that's what it takes. He comes back and picks it up and he looks at his bill...

$85/hr x 3 hours - $255
1 bearing - $32.13
New speedo cable key - $7.27
Chaincase oil - $6 for 12oz

For a total of $300.40 and then a line item that states "shop supplies" of 5% which is $15.02 for a grand total of $315.42.

Now said customer is a farmer or a machinist or something so he's not completely unfamiliar with things and does a little checking and finds that the local bearing house sells the same exact bearing for $4.72 retail and that $6 can buy a whole quart of synthetic gear oil and that an entire speedo cable for his 1997 Chevy truck is $12.

I'm all for people making a profit, but if someone wants to call me a democrat because I'm against obseen profit so be it. I realize the dealer isn't the one setting those parts prices, but like all product dealers the front line guy gets to listen to the complaining.

So people can complain about customers wanting it for free, but even half asleep customers can see when common parts like bearings, springs, oil, etc are as much as 10 times more than what can be bought at OTHER RETAIL STORES then surely people should understand why that customer thinks they are getting screwed.

Please, educate me... why is it that when Polaris/Cat/Doo/Yamaha put a 6205 bearing in their own package it costs $17.75 but I can walk in to the local bearing house and on retail buy a 6205 bearing (of probably better quality mind you) for $4.00? Or what is it about antifreeze in a Polaris bottle that should cost me twice as much per gallon as I can buy Preston at NAPA?

Sorry, I got a bit worked up there. But the one thing I HATE about OEMs and frankly their dealers because they are guilty by association is the friggin' price of parts.

sled_guy

 

[icr]

Sorry, I got a bit worked up there. But the one thing I HATE about OEMs and frankly their dealers because they are guilty by association is the friggin' price of parts.

sled_guy

Agreed. The rear trailing arm bolt for a polaris edge chassis is $8. Often their rivets are $.50 EACH, a box of 50 at the hardware store is $4. The smaller items are usually marked up 200-500% of cost, sometimes more. Does Polaris really need to make $7 on a bolt to justify stocking it?

 

[Boston Racing]

The problem with your numbers is the 10% profit margin. It's usually 50% on everything but the snowmachines themselves.

You grossly overestimate the margins, That is part of the problem. Consumers think the margins are much larger. The only items I have seen that type of margins on have been clothing and some aftermarket belts, but you never see them going for full retail.

I am sure that other powersports buisness owners can validate what I have been saying. I do run a small High Performance powersports buisness in Colorado and I deal mostly in atv's. My overhead is small,I provide excellent service and I always try to match whatever the customer can get elsewhere but it get to the point where it takes an hours worth of time to complete a order that makes you 5 bucks. How many of you would work for 5 bucks an hour. I cannot speak to the dealer as I have no idea what it take to run one but all dealers in every type of transportation seem to charge alot more for service, maybe there is a reason other than pure greed that they do. It drives me crazy to see guys demonizing guys trying to make a living.

 

[Boston Racing]

Sorry, I got a bit worked up there. But the one thing I HATE about OEMs and frankly their dealers because they are guilty by association is the friggin' price of parts.

sled_guy

I apologize for not being clear, I have no idea on the OEM service and parts side. I am coming from the small buisness side. I have a deal with a local dealer that sells to me for 5% over cost and the prices on some thing are inflated. Yamaha has the best markups, Polaris parts seem to have the smallest margins, believe it or not. For example a 1115 belt has less than a 10% margin where you can get an XS-809 with much more, I believe that is why vendors test them and sell them in their stores. I run the XS809 on my sled and have 5 in stock yet I have only 1 1115. I think all dealers look for great products to sell that havea good margin. If I have a choice to sell you 2 parts that I believe have the same quality and performance I will sell the one with the higher margin. Look all around in any major retail store and you will see the same thing. This is what i believe will kill the small product vendors int he future. If one guys sells 2 cool air vents for 40 bucks now everybody has to sell them for that or they appear to be "greedy". That means that 2cool will have to lower the dealer price to keep people buying them and the cycle never ends.

To tell you the truth before I saw some of the dealer pricelists I assumed the margins were higher as well, Now I wonder how people do it 70 hours a week for peanuts. I think they really care much more that you think about customer service. It also seem that the ones that do well dont play the bargain game.

 

[Mandic]

Please, educate me... why is it that when Polaris/Cat/Doo/Yamaha put a 6205 bearing in their own package it costs $17.75 but I can walk in to the local bearing house and on retail buy a 6205 bearing (of probably better quality mind you) for $4.00? Or what is it about antifreeze in a Polaris bottle that should cost me twice as much per gallon as I can buy Preston at NAPA?

sled_guy

I cannot say for certain, but one thing comes to my mind. Warranty. At least at the auto dealership I worked at, parts carried a 1 year parts warranty, at the minimum. Meaning if you paid that extra amount for that bearing and for some reason it failed in a few weeks, we'd replace it and the labor on it would be free to you. Sometimes items are bad, it happens. Now if you sourced the bearing cheaper at a bearing house, install it, and it fails, what happens? Can you go back to the bearing house and say, "This failed, give me a new one and reimburse me for my time, please.". No way.

Also that bearing house, sells bearings. That is what they do. Quantity COUNTS. They probably buy those bearings by the pallet, where as your dealer is getting them one or two at a time. If they could afford to buy them buy the pallet I am certain the price would be better. But it is a matter of, are they going to sell $1000 of them? No, because all they do is sell that bearing for its specific purpose. The bearing house is selling it to anyone who walks in, for whatever purpose. That same bearing could be in every John Deere tractor that rolls out, but your Polaris dealer doesn't know that. And a John Deere owner isn't going to go to the Polaris dealer looking for that bearing.

Quantity always makes a difference. If I could afford to stock 100 of everything I sell, the prices would be lower. That is why you will find random items at "big box stores" cheaper than I can even buy them for. When they buy more of them in one shipment then I sell in my entire time of being in business, of course their price will be cheaper.

Walk into Napa and buy anti-freeze. They likely have a pallet in the back, and the warehouse 20 minutes away probably has a room dedicated to it. They go to Prestone and buy thousands of pallets of the stuff. That is what comes with being a large organization. Buying power means discounts. It is the exact reason that Walmart, Lowes, and Home Depot are taking over. They are big corporations that buy thousands and thousands of products at a time. If you walk into your local Lowes and they have 10 drills on the shelf, think of how many Lowes there are. Now multiply those 10 drills by those Lowes. The number is big, and that means the company went and bought all of those, likely at the sametime. That is how they get the killer deals. Now your local Tool distributor(like me), or your local Powersports dealer are independently owned. They buy a few items at a time. Of course they won't get the price breaks they would if they were like someone like Lowes going direct to the manufacturer for items.

 

[icr]

You grossly overestimate the margins, That is part of the problem. Consumers think the margins are much larger. The only items I have seen that type of margins on have been clothing and some aftermarket belts, but you never see them going for full retail.

No, I don't. I worked at a dealership and every thing I sold came up with 2 prices, ours and retail.

 

[Wade]

I've been known to mention that I bought the sled used, from a guy that then bought a new sled from this very shop. Another words, he wouldn't have had that new sled sell without me.

 

[rmk2112]

I cannot say for certain, but one thing comes to my mind. Warranty. At least at the auto dealership I worked at, parts carried a 1 year parts warranty, at the minimum. Meaning if you paid that extra amount for that bearing and for some reason it failed in a few weeks, we'd replace it and the labor on it would be free to you. Sometimes items are bad, it happens. Now if you sourced the bearing cheaper at a bearing house, install it, and it fails, what happens? Can you go back to the bearing house and say, "This failed, give me a new one and reimburse me for my time, please.". No way.

Also that bearing house, sells bearings. That is what they do. Quantity COUNTS. They probably buy those bearings by the pallet, where as your dealer is getting them one or two at a time. If they could afford to buy them buy the pallet I am certain the price would be better. But it is a matter of, are they going to sell $1000 of them? No, because all they do is sell that bearing for its specific purpose. The bearing house is selling it to anyone who walks in, for whatever purpose. That same bearing could be in every John Deere tractor that rolls out, but your Polaris dealer doesn't know that. And a John Deere owner isn't going to go to the Polaris dealer looking for that bearing.

Quantity always makes a difference. If I could afford to stock 100 of everything I sell, the prices would be lower. That is why you will find random items at "big box stores" cheaper than I can even buy them for. When they buy more of them in one shipment then I sell in my entire time of being in business, of course their price will be cheaper.

Walk into Napa and buy anti-freeze. They likely have a pallet in the back, and the warehouse 20 minutes away probably has a room dedicated to it. They go to Prestone and buy thousands of pallets of the stuff. That is what comes with being a large organization. Buying power means discounts. It is the exact reason that Walmart, Lowes, and Home Depot are taking over. They are big corporations that buy thousands and thousands of products at a time. If you walk into your local Lowes and they have 10 drills on the shelf, think of how many Lowes there are. Now multiply those 10 drills by those Lowes. The number is big, and that means the company went and bought all of those, likely at the sametime. That is how they get the killer deals. Now your local Tool distributor(like me), or your local Powersports dealer are independently owned. They buy a few items at a time. Of course they won't get the price breaks they would if they were like someone like Lowes going direct to the manufacturer for items.

I've been reading this post for a few days with interest and trying to decide what to post and how to get my opinion across. I dont have to now, I couldn't have said it better myself.

FYI: I am a business owner myself. (Construction Contractor)

 

[AZ800]

It's jsut a matter of luck or maybe finding the right person, otherwise I have terrible luck with service departments (we won't even talk about Big O Tires).
My locl Cat dealer, small shop in Eagle. Guy is always very friendly. Thought service would be good. Took my sled to him for some warranty work (first time I've ever taken a snowmobile to a shop for work), minor stuff. Speedo not working and had some moisture in the DD last spring when I changed it.
Now I'm not looking for anything for free (except warranty) or even discounted, but I do expect good service. Especially since this is a small town shop. Bought most all my parts there. Have given them some stuff that I didn't need that they could sell/give to someone who needed those parts (decent set of skis, M seat). Personally responsible for the sale of 3 of their new sleds and they know it.
So after my sled sits outside for almost a month because the owner is hunting and his kid is a stoner, they finally work on it. The speedo works for them, just like it works for me, about 1 out of every 20-30 miles, so they say it's fine. The DD, told them about the moisture in it and also warned them it didn't have Arctic Cat DD oil in it because I didn't want to waste $17 of good oil just to have it drained out in the fall because I was planning on bringing it in to them to look at why there was water in it. Oh and I asked them to pop the primary clutch off for me.
So, after a month, and me calling like once a week, "it's done". Cool I go pick it up. Sled is dirty as sh!t! And I keep my stuff clean and they charge me $58 to change the DD oil. I never requested it and they didn't do sh!t to find the leak! And didn't pop the clutch, but they did remove the belt, so when I started it to go into the trailer, it revved up like a mofo.
Now these are nice people, but their service (repairs) SUCK!

 

[Loudisfast]

this is a great opurtunity to give quality input to dealers to make things better for us...I have given negative rep to two peeps on here..you just became #3..

OH,
man that really hurts when you give me a bad rep, NOT. Who cares Y don't you give me some more.

 

[SmokeyBear]

OH,
man that really hurts when you give me a bad rep, NOT. Who cares Y don't you give me some more.

Thanks to all who contributed to this discussion. Almost 100% useful information and only one jackass posting. Very good ratio. I apologize for having to be away from the forum for a few days, but it appears that it carried on nicely without me. I will compile the info and present it to the Dealer Principals and we'll see where it goes. In the near future I will post again and look forward to your opinions and advice.

 

[Norway]

www.cheap-a$$/no service.get lost

Smoekybear: great thread! might open some eyes

I do not agree that dealers must "get with it" on the internet sales. Forgive me for generalizing, but online sales in Norway could be performed buy 1 dealer/company, but it takes 2 days straight driving from one end of the country to the other. Compare it with a state.
Now, how do you combine online sales with service/warranty repairs/updates/other repairs/trading in sled/looking at new sled/getting riding gear etc. ???

At the dealer they have to buy the part, ship it to their shop half-way across the country and put it on the shelf, and update the puter on inventory!

The online store buys directly from wholesaler, stocks in a warehouse (that can be located in a chitty back-ally with no front window and 90% of the space used for storing parts.

I for one just have to admit that I cannot see how a shop can compete with prices from a online store, and still turn a profit with all the extras they have to offer.

And about some parts beeing insanely $$$... I'm as pissed about this as the next guy, but I dont know how to get around it??

The bearing is coming from a bearing mfg, so to compete with him on pricing is just a pipe-dream! The big-4 have to test it, buy it, bag it and ship it through X numbers of "links" in their supply chain. And last I checked no one wants to work for free, so..

I firmly believe that the mfg should set a minimum price, but agree that this is difficult to enforce. Sleds AT THE LEAST should have enforced minimum pricing, with some system for discounting sleds that have sat for x months.
We've seen it here; new guy loves sleds/atvs/boats etc. starts selling from his garage. Cant beat his prices, but he hardly has any space or money for stocking parts/tools etc. He just undercuts the bigger dealers on sled sales, riding a demo himself all year long, and sends you to the bigger guy when you have a problem!

Ok, I'll stop ranting and summarize:

I wont stand for poor customer service or bad quality work, but around here the stayers are NOT the cheapest.

RS