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Just wanted some opinions on labor rates. The management teachers always say to charge an uneven amount like 82.74 so it is harder for the customer to figure out. How many use this method and is it a good idea? Dealerships do not do this and they have no problem making lots of money.

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Many don't know this, but in New York, you do not have to post a labor rate. So, I don’t post it. All I am required to do is to let the public know how I calculate my labor prices. My sign in my customer waiting area states:

 

“Labor rate may be computed by either hourly rate, which is multiplied by clock hours and / or flat rate manual.

 

Most labor costs are charged by method of menu pricing only. E.g.: oil service, wheel alignment, wheel balance, tire mounting, or diagnostic analysis.

 

You, as the consumer, have the right to additional information and explanation on labor costs upon request.”

 

I don’t know what the laws are in your area, but my opinion is to get away from talking about time. Many of the jobs we do are menu prices and don’t fall into an hourly labor rate. For example: a brake job that takes you 30 minutes you may have a menu price for 1 hour.

To answer your question, having a number like $82.74 is harder to calculate, but do you really need that to avoid confrontation by the customer? There must be a better way.

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I use an odd number both for my labor rate ($59.97) and my shop supplies amount (8.01%). The example that was used for me was what Walmart does. They won't use even numbers and they also only use 3, 7, 9 price number endings if I can remember properly.

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I don't know that it really matters a lot. Very rarely do I get asked what our labor rate is. Your labor rate needs to be what you need to be profitable and in line with your market. Our is currently $78. CARMandP where are you at in Tennessee. My daughter and son-in-law live in Cleveland, TN.

 

 

Hey I am in Cleveland, TN. It is a nice town. Where do your daughter and son-in-law go for auto service?

Cleveland is still a small town, I might know them.

 

Tony Gobble

www.gobblesauto.com

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The only time I have been to Cleveland was to visit a friend at Lee University. That has been more than 10 yrs ago but that campus was very nice. I saw a program put on my the drama team that was probably one of the funniest things I have ever seen.

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My son-in-law is a minister so they don't have a lot of money. They come to dear old dad for almost everything that will wait until they get to Indiana but I should hook them up with you. There names are Craig and Janna Jones. Craig works for Norvel Hayes Ministries. Craig and Janna even have their own web site. They are both tremedous singers and musicians. They met at Lee University in Voices of Lee Craig Jones Ministries Worship

 

Hey I would love to meet them. I understand wanting Dad to take care of things. If I can ever help them I would be glad to. I will make sure they are well taken care of. Lee University is a great school and a lot of talented folks come from there. Have a great week.

 

Tony Gobble

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  • Have you checked out Joe's Latest Blog?

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      It always amazes me when I hear about a technician who quits one repair shop to go work at another shop for less money. I know you have heard of this too, and you’ve probably asked yourself, “Can this be true? And Why?” The answer rests within the culture of the company. More specifically, the boss, manager, or a toxic work environment literally pushed the technician out the door.
      While money and benefits tend to attract people to a company, it won’t keep them there. When a technician begins to look over the fence for greener grass, that is usually a sign that something is wrong within the workplace. It also means that his or her heart is probably already gone. If the issue is not resolved, no amount of money will keep that technician for the long term. The heart is always the first to leave. The last thing that leaves is the technician’s toolbox.
      Shop owners: Focus more on employee retention than acquisition. This is not to say that you should not be constantly recruiting. You should. What it does means is that once you hire someone, your job isn’t over, that’s when it begins. Get to know your technicians. Build strong relationships. Have frequent one-on-ones. Engage in meaningful conversation. Find what truly motivates your technicians. You may be surprised that while money is a motivator, it’s usually not the prime motivator.
      One last thing; the cost of technician turnover can be financially devastating. It also affects shop morale. Do all you can to create a workplace where technicians feel they are respected, recognized, and know that their work contributes to the overall success of the company. This will lead to improved morale and team spirit. Remember, when you see a technician’s toolbox rolling out of the bay on its way to another shop, the heart was most likely gone long before that.
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