Yet Another Reason Why Sears Has Lost My Business

[Uncle Cracker]

My comment had nothing to do with a service call -- I understand there are lots of expenses there. I just would expect that in a $350 mower, two small clutch parts deep inside the transmission should cost less than $280. In fact, the entire transmission assembly (consisting of several dozen parts) cost $250. Explain that one?? Again, this was parts only, no labor (save for the people employed to stock, ship, etc the parts).

Add up the list price of all the parts in your car. This reality is not just reserved for Sears to exploit.

[dkerfoot]

Just for clarity Tim, I wasn't really replying directly to you or anyone else for that matter - just sort of at the collective...

I am not actually trying to defend Sears on the charges for the parts, but my guess would be that the mower you bought had a limited production run. Perhaps because of a high failure rate. A product that has a long production run will have cheaper replacement parts.

I owned a 1960 Comet for a number of years in the 90's. Most parts were either unavailable or horribly expensive but I could get certain engine and gear box parts very reasonably because they happened to also be used in some 1965-1968 Mustangs.

I could point to several Brand Name computer manufacturers that deliberately use slightly customized motherboards, so that when they fail they can charge $300 for them instead of the $30 that the equivalent two year old MB would cost if it was the non-customized version built in the same plant by the same manufacturer in Taiwan.

My point is that sometimes this is deliberate, which makes me mad. Sometimes it is just bad luck (like I suspect is the case with your mower) which is irritating (and still expensive).

[tfischer]

Add up the list price of all the parts in your car. This reality is not just reserved for Sears to exploit.

Oh, I'm aware of the fact that parts go for magnitudes more as replacements. But this takes the cake and eats it too.

[tfischer]

I am not actually trying to defend Sears on the charges for the parts, but my guess would be that the mower you bought had a limited production run. Perhaps because of a high failure rate. A product that has a long production run will have cheaper replacement parts.

Still doesn't explain why the entire transmission assembly (which was second only to the engine in complexity) was cheaper than the two clutch parts inside that I really needed. Also doesn't explain why the CS people acted as if there was nothing unusual about this.

Sad thing is I sold the mower and the person who bought it was intending to fix it again. I didn't exactly do my best to talk him out of it, but did tell him I looked into it and it wasn't worth it to me...

-Tim

[cgallery]

It is pretty clear most of the people commenting think that the cost of a service call is the hourly wage of the person who shows up. That is in fact a small fraction of the actual cost. Consider:

1. The people and systems required to receive and schedule the trouble call. These people require management (direct management plus HR), office space, supplies, furniture, heating, cooling, electricity, taxes, accounting, vacation, health insurance, sick days, worker's comp, training, etc...

2. The local repair center that actually handles the call. They need management, office space, warehouse space, parts inventory, supplies, furniture, heating, cooling, electricity, taxes, accounting, vacation, health insurance, sick days, worker's comp, training, work vans, gas, liability insurance, background screening, tools, etc...

I am not even getting into the people and travel required to manage and maintain the various systems, credit card fees, charge backs, collections, etc...

Right, the burdened cost (or overhead) of a tech. So local service centers, national dispatch centers, warehouses and warehouse employees, etc., accrue to this value.

I will note, however, that Sears and GE have both eliminated many, if not most of their local service centers. Techs drive their vehicles home (I have one living above my shop) and are dispatched electronically. Parts are shipped via UPS/FedEx to the tech's home and sometimes directly to the customer's location. They've (Sears and GE) been doing anything and everything to reduce those burdened costs.

To put it in perspective, I was a self-employed computer tech for a number of years. I charged $100/hour and was busy "working" an average 14 hours a day, six days a week. Best Buy charges an average of $165/hour for its Geek Squad on location service and can only handle a very limited set of pre-defined services. I was right in the middle for this area regarding my hourly charge and was capable of handling 100% of the needs for residential through businesses of up to 75 employees. I don't want to get into a resume, but I have excellent communication, business and technical skills.

My goal was to have 4 BILLABLE hours per day - reality was more like two. Remember - I was always busy - working with a focus that only a business owner has.

Clearly, many people think that I would be really easy and lucrative to run a small appliance service business. All you need to know is "Lefty Loosie" right? I encourage you to give it a try and see how that works out for you.

I think you're taking what I said out of context. I said that they're looking for people that know "lefty loosie," because all they're going to do is write estimates that will make the customer's eyes pop out of their heads. Then they disappear with the $100 estimate fee. But the reality is, fixing appliances isn't rocket science.

One final note. There was a criticism that Sears had changed its service model so that they can make more money. Um... That of course is the only reason there is a Sears - right? To make money?

Again, I think you're taking what I said out of context. I said the MBA's work everything to increase short term profits. An MBA's entire compensation package is based upon increased profit, in the short term. Nobody ever gave an MBA a bonus for making changes that may result in increased profits down the road. It is all now now now. Stockholders need to see immediate results.

And yes, someone will say "They'd make a lot more money if they provided better service." Perhaps. If that is true, there is an excellent opportunity for someone to makes lots of money running an appliance repair center in our area, right? It is easy to say, but hard to do. Good luck.
.

Locally, no. There are quite a few locally-run service organizations that get it done every day, and have a happy customer base.

The problem, which I touched on above, is doing the same on a national scale. Doing so w/ Wall Street money may well be impossible. But that doesn't excuse Sears for charging $100 for an estimate that is half the replacement cost of a refrigerator when a $35 part would have done the trick.

[eezlock]

why Sears has lost my business....

I won't buy any major appliance from them ever again! Thirty or more years ago,my wife and I bought a new Kenmore washing machine from Sears. At that time,the appliance salesman was a life long friend of my family and I trusted him at his word. We decided to buy the extended warranty on that machine at the advice of my "friend"....a bad decision that I still regret to this day! Well, nothing doing but to have the machine break down after the normal warranty and it was in the extended warranty period where we were caught up. I called Sears for the repairs to be made....they informed me that the repairs needed would not be covered under warranty....I told them that I had an extended warranty plan they still refused to budge from their position. I went to the store where I had bought the machine, talked to my so called "friend" the salesman, told him of the dilema, he threw up his hands and said " I can't do anything" and Sears would NOT fix the machine. So, needless to say being young and dumber then, with no help I had it fixed at my expense and vowed that I would NEVER,NEVER, NEVER again would I ever buy any appliance from Sears! And I still haven't either....eezlock

[sscherin]

I must be a cheep SOB..

When my mower needs parts I make my first stop the scrap yard.. spend 10 minutes flipping over movers and yard out the parts I need.. 80% of the time I get what I need and sometimes it's nearly new parts.

I just finished up playing riding mower parts swap..

I had an old MTD rider but the deck was rusted and it had a few other issues.
I picked up a 42" Crafstman rider with rear bagger and hydrostatic drive but a blown Kohler 15.5hp motor for $125.. Swapped in the 12hp Tecumseh from my old MTD, swapped in the kohlers engine drive pullys, lubed up the moving parts and went for a spin around the lawn....

I'm really surprised just how many parts will swap between mower models, even different engines just bolt right in. It took some fiddling but even the Kohler muffled bolted onto the Tecumseh.

[woodturner]

I just would expect that in a $350 mower, two small clutch parts deep inside the transmission should cost less than $280. In fact, the entire transmission assembly (consisting of several dozen parts) cost $250. Explain that one??

Oh, oh I know that one!! ;-)

The transmission is built and sold as an assembly, so in the inventory system it is one part. When a part within the transmission fails, service people typically replace the whole transmission. Thus more transmission assemblies are sold than the parts within the transmission, and thus the transmission is a higher volume product than the individual parts. As a result, the inventory cost is much, much lower than that of the individual parts.

The parts within the transmission are rarely sold - it's not cost effective for a repair person to repair the transmission, given labor costs. Thus, they sell realtively few of the clutch parts, and exclusively to DIYers (which seem to be a dying breed). So maybe they sell one clutch part every two years, so the inventory costs are HUGE.

So the inventory costs on the transmission might be in the range of $10, while the inventory cost of the clutch part is more likely to be in the range of $220. So you are buying a $30 part with $220 in inventory costs.