It finally happened!!!!!!!!!!!

[Spatech_tuo]

I call charging $100.00 and up an hour + a trip charge making money. Thats a home run!!!

There is a big difference between warranty and non-warranty work. Dealers don't get anywhere near $100/hr for warranty work.

So do you mean that when you do a warranty call on the product you sell, you are not payed for parts and labor to repair them by the manufacturer?

Scott  

The dealer is sent the parts they need for the repair (obviously they'll stock standard parts, use them as needed and the just replace it later when the manufacturer sends the replacement). They are also given a fee for the warranty work from the manufacturer but that rate is certainly not near the rate the dealer charges customers for non warranty work. People often assume the dealer makes a good amount of $ on warranty work but when you factor in labor costs, owning the truck, gas, insurance ... its pretty much a wash to do warranty work..

When it’s out of warranty they’ll charge the owner directly and it’ll be more than they get from the manufacturer for warranty work so then they obviously make a decent profit. Even though they’re obligated to provide the warranty service good dealers make sure they provide good warranty service after the sale because they also know if they do you’ll be more apt to call them later on down the line.

There are multiple advantages to buying from a long time dealer and in some ways this is one of them. They may have a lot of spas in the field over the years and may have built up a strong clientele (and reputation) with plenty of non warranty work so they may be less apt to feel a need for a trip charge on warranty work.

[Summitman]

well said spatech, once again spot on.  

[Summitman]

I call charging $100.00 and up an hour + a trip charge making money. Thats a home run!!!

selling mercedes for a living would equal home runs

[Too Tense]

OK So trip fees charges to the customer and doing warranty work.  Lets say average trip fee is $35.00 per. if you do 8 warranty calls a day 8x 35.00=$280.00 a day. I'd say that more then covers fuel, ins, & Tec. for that day.
This is much better then having everyone setting around costing money waiing for the phone too ring.

Please if it wasn't profitable why do it.

[Water Boy]

What about the dealers like myself that dont charge trip fees??

Maybe I need to start charging trip fees after seeing those figures!

[Summitman]

OK So trip fees charges to the customer and doing warranty work.  Lets say average trip fee is $35.00 per. if you do 8 warranty calls a day 8x 35.00=$280.00 a day. I'd say that more then covers fuel, ins, & Tec. for that day.
This is much better then having everyone setting around costing money waiing for the phone too ring.

Please if it wasn't profitable why do it.

My service tech alone without gas, insurance, trucks, tools, costs me $175 a day.  To get that figure you have to figure hourly wage, benefits, and payroll taxes.  Trust me Too Tense, money is NOT made on warranty. That also doesnt figure in that at times he needs a second hand.  Dealers are charging trip fees for a reason, times are tough with fuel expenses, and labor expenses.  Its not as easy as hitting home runs.  I dont currently charge trip expenses, but hey if gas tops $5/gallon, I may have to rethink that theory.  Plus factor in that the Internet takes away lots of chemical and accessory sales that used to be a given.  Just like any business, owners have to be creative to make money.  Making peanuts dont always make up for all the headaches that business owners go home with everynight.    Great customer service is awesome, and we always strive for that, and hopefully we can always give that.  You have to factor in that gas has dang near doubled in the past year.  That means that fuel expenses for all these companies that travel to houses have doubled.  That means its that much harder to bring home a profit.  

[starsky]

As far as warranty stuff goes here is my 2 cents.

With a purchase of a hot tub, I believe the average person feels, based on decency and reasonableness that buying a 8,000 to 15,000 dollar brand new hot tub, they should be able to expect a few things.  Warranty issues will be fixed without hassle.

They should be able to expect that within a reasonable amount of time, the spa should work as designed, and described and promoted by the company to work.

They should be able to expect that if the spa doesnt work according to its design, or malfunctions, it should not cost the customer a dime to get the spa back into working order.

A new spa should not develop "union" issues, or any issues for that matter that should fall on the owners to fix or troubleshoot until the warrant expires.  

And to pay someone a trip charge to perform warranty work on said 10,000 dollar spa? You gotta be kidding..

Whos' with me!?

[D.P. Roberts]

OK So trip fees charges to the customer and doing warranty work.  Lets say average trip fee is $35.00 per. if you do 8 warranty calls a day 8x 35.00=$280.00 a day. I'd say that more then covers fuel, ins, & Tec. for that day.
This is much better then having everyone setting around costing money waiing for the phone too ring.

Please if it wasn't profitable why do it.

I'm in a completely unrelated business, which employs many part-time people at barely more than minimum wage. We have a formula we use to figure these things out, called SPH, or Sales Per Hour. When you add up the employee's salary, employee benefits, insurance, rent, utilities, product & its markup, shrink, etc., etc., we need to make about $75 per hour - or roughly ten times what our employees are actually earning per hour.

 Granted, there's a profit margin built into that too. However, most of those profits go to our stockholders, & the majority of our stockholders are never going to buy a yacht off of our stock's dividends.

So, I really don't begrudge techs their hourly charges. Figuring out how much to charge per hour isn't about adding a certain amount to the employee's wages - it's a matter of multiplying it several times.

[Tailhooker]

As far as warranty stuff goes here is my 2 cents.

With a purchase of a hot tub, I believe the average person feels, based on decency and reasonableness that buying a 8,000 to 15,000 dollar brand new hot tub, they should be able to expect a few things.  Warranty issues will be fixed without hassle.

They should be able to expect that within a reasonable amount of time, the spa should work as designed, and described and promoted by the company to work.

They should be able to expect that if the spa doesnt work according to its design, or malfunctions, it should not cost the customer a dime to get the spa back into working order.

A new spa should not develop "union" issues, or any issues for that matter that should fall on the owners to fix or troubleshoot until the warrant expires.  

And to pay someone a trip charge to perform warranty work on said 10,000 dollar spa? You gotta be kidding..

Whos' with me!?

Well said!!

[Swell-Tub]

So to help this thread to the 24 page record level.

I took my Toyota Avalon in for some warranty work. It needed a belt tensioner and a new joint in the steering column. The cost to Toyota was $1300.00 for the labor and parts. I talked to the service writer and they love warranty work and make a good profit on it. So using that as an example I can't figure out why you spa dealers don't work out a better arrangement with your manufacturers. It would be an incentive for the manufacturers to do a better quality check before the tub leaves the factory floor.

Inquiring minds want to know...

Scott  8-)

[Swell-Tub]

What I like about this dead horse thread is that the buyers want the large ticket item supported like the cheap TV they bought at Best Buy. The dealers want to do the right thing and make the customers happy but the manufacturer won't support the dealers to the level that makes customer service profitable for them. So the manufacturers will next say that they need to raise the price of a tub to 20K so they can pay for their factory mistakes in the field. This whole thread tells me that the problem is the manufacturers not standing behind what they produce or the dealers who sell them.

I have a great deal of respect for many of the hard working dealers on this site but I'm less than impressed with the level of support for the warranties from the manufacturers. I had a guy come out last week and tweak the sound on my 9 month old 52" flat screen. It didn't cost me a penny and the TV didn't cost 12K either.

Scott  8-)

[Too Tense]

Scott

Most manufactures use a formula that works very well for there dealers, and if the dealers follows this formula they will stay in the black. In most industries like the spa industry they used what is called number+10. Nunber is the profit, 10 is the shipping cost. This allows the dealer to sell and service and make a profit on each unit they sell. If the dealer chooses to discount  more than the recommend manufactures guide lines, then yes it will affect there bottom line. So most not all spa manufactures have built in to the cost of their spas a profit margin for there dealers. Sure their will be that one spa that will require more service then the rest, lets say 1 in every 100 spas soild. This is why the manufacture only pays a flat warranty repair rate. Its all numbers.  So the Arctic Dealers that are saying on this thread that they make a little profit on each sale are full of.... If you go into 3 different Arctic stores they are all using the same retail price sheet. They also say the same thing don't let these prices scare you the price is......... most will be within $100.00 of each other. Now if there prices are  over inflated on there retail price sheet to begin with and they discount the same percentage points +/-$100.00 then you must ask yourself are they really offering a discount or is this their every day price. I have not experience this pricing game on other upper end brand name spa retailers, only seen this on the cheaper low end spas.


Now as for the other non Arctic dealers on this forum Great Job on helping the public whether it is your brand or the competitors answering simple to complex questions without taking jabs at  us. Thanks

[Water Boy]

You might take your time, and go slow, and re-read the post. Not one Arctic dealer said they dont make money on a spa sale. That was never said. If it was, please point that out to me.

What was said, and backed up by non Arctic guys, is that dealers don't make profits on warranty calls. Please dont twist the words Too Tense! Thanks!

Since your such an expert in the spa business, maybe you should just start a spa store of your own, and then you can buy that spa and see how much money you make on it!

[Too Tense]

GEE!!!!!!!! Did I hit a nerve.

[Swell-Tub]

Well I've only had my spa 3 months so I'm no expert. Some people buy a new car every 3-5 years. You buy a TV and other electronic gear every 5+ years. I'm guessing people don't replace their spa very often, mostly because of expense and how hard it might be to unload the old one. That said when dealers take care of their customers they do it because it is the right thing to do and word of mouth will bring additional sales. If warranty work isn't as profitable as non-warranty work my guess is they make up the difference with additional sales. It is kind of like money spent on marketing. Radio and newspaper advertising are great but a great reputation and happy customers was always the best kind of marketing for me. I have owned 7 businesses and I have no desire to be self employed any longer. It was very hard work.

BTW one of the busiest spa dealers in my area buys and picks up old spas as a trade-in. He doesn't give a lot for the used ones but he also sells a lot of used ones to first time buyers. Maybe he makes good money on servicing the older ones. He also gets people hooked with a used one and then gets them back for the new one.

Scott  8-)