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View Full Version : Hourly rates for mechanics not in line with supply/demand


DFW Area Landscaper
01-20-2006, 10:07 AM
I am scratching my head because the laws of supply and demand don't appear to working within this industry.

About a year ago I replaced the high pressure line on my Nissan and I took it to a local garage for an evacuation & recharge. The mechanic who did the work & I were talking and he is paid on a commission basis. Basically, if the "book" says a job should take an hour then he gets 40% of the hourly rate for that task. If there is no work to do, which he indicated was the case a lot of the time, he gets nothing.

Last summer, we had a break down. I noticed one mechanic was sitting around with nothing to do. He was just sitting there for nearly two hours while another mechanic worked on my truck.

Last night, I was dropping the '98 F-150 off for some work and the manager of the place indicated that it was slow and they would have no problem getting my truck finished the next day.

So my question is, with all this extra capacity on the supply side of the equation, why is a mechanic able to bring in $93.50 per book hour????

I decided to buy a new F-150 rather than another used one and the repair costs were a major factor. If mechanics rates were something closer to say $50/book hour I may have leaned towards another used truck.

What is going on within this industry?

Later,
DFW Area Landscaper

kirk brown
01-20-2006, 01:49 PM
i`m a ford tech in ontario.
the door rate is 95$ per hour and they pay me 21$ per hour on flat rate.
the whole sys. is bad hence my switching to lawn care.
flat rate only encourages rip offs and customer disatisfaction.

lawnmaniac883
01-20-2006, 07:33 PM
Ok, a good friend of mine has been a mechanic for his entire life and I will attempt to make this explanation clearer for you. In some shops, they have a repair price book of sorts, this is like the kelley blue book of repairs if you will. Now, lets say the book says the repair should take X amount of hours and the mechanic completes the task in Y amount of hours, he gets paid for the X amount of hours regardles. Say a transmission servicing in the book says it will take 1 hour, the mechanic completes this task in 20 minutes, he gets paid for the one hour the book said it will take.

This is how most mom/pop shops operate and it is fair to everyone, the mechanic gets the money he should and you get back on the road faster.

Hope this is a better description for ya.

DFW Area Landscaper
01-20-2006, 10:28 PM
Dude, I understand the way they work with book hours. That is not my concern. My concern is that there are mechanics all over town sitting around with nothing to do but yet, they want $90+ per hour. Why don't they do what the lawn boys are doing and start dropping prices for fear of the customer taking the work to the next garage?

How are these small operators able to all stand so united on this hourly rate when they all need more work?

Later,
DFW Area Landscaper

CLARK LAWN
01-21-2006, 01:12 AM
because they are flat rate it does not cost the owner anything if the employee's are just standing there for 8 hours a days.and if all the dealers know they need to make $90/hr they know you will pay it or not get your car fixed. and remember most dealer work is warrenty so the manufacurer pays it.if the lawnboys would all get together and do this we would all make much more money

Shadetree Ltd
01-21-2006, 01:47 AM
I wasn't going to respond, but...

It is the same with almost all other tradesman. You will find that plumbers, electricians, carpenters and so on VALUE themselves, their tools, education and experience and usually charge going rates that are similar to each other. "lawn boys" are a dime a dozen that don't value themselves. There are thousands of landscape companies, horticulturalists and arborists that make good money by charging what they are worth. Your concern is that your entire business plan is the exact opposite of this model. Devalue your service but make up for it in volume.

Scott

PROCUT1
01-21-2006, 01:35 PM
Mechanic - Skilled trained schooled professional

Lawn boy - Someone laid off from one job with a few bucks to buy a mower and is now a "contractor"

lawnmaniac883
01-21-2006, 04:09 PM
DFW, if you know you are worth 90$, and someone is only willing to pay lets say 50, why work for them? These guys work hard when they have work, and get paid as they should. After all the training/tools they have paid for, why would they want to go push a mower for 1/8th what they deserve.

CLARK LAWN
01-21-2006, 04:44 PM
DFW, if you know you are worth 90$, and someone is only willing to pay lets say 50, why work for them? These guys work hard when they have work, and get paid as they should. After all the training/tools they have paid for, why would they want to go push a mower for 1/8th what they deserve.
thats what is happening in the lawn service all over people will work for no money just so that the guy down the street wont get the job for what it should cost.alot of us on her have been through alot of training and seminars and have alot more invested in equipment. if more people got the attitude of either i make a livable wage on a job or im not going to do it we would all be better off

YardPro
01-21-2006, 07:58 PM
the reason why is becuase they figure they will work X hours per year... they need to bring in X dollars per year... that leads to the $90.00/hr rate...

ie..

they need to gross $90K/ year per employee...
they average 1K hours billable per year per employee..... that means they get to charge $90.00/hr...

alo t of this comes from that " book" you are refering to... it is the factory warranty work reimbursement book.... and those figures are also for areas up north where labor unions have the wages up very high... so that's where a lot of those rates start.

Gilla Gorilla
01-21-2006, 08:25 PM
DFW I cannot spead for the independent shops, only about the dealerships. This being said the service departments float the whole operation these days, that is just where the money is being made to pay the bills for the whole dealership in this day and age. The dealership that I worked for before had a lot of overhead and said that they only made .01 per $1 that was taken in. How true this is I could not tell you.

Like it has been said already on this thread, these guys value there technicians skills and ability to make them money. Some shops pay you hourly with a little bit of a bonus plan for turning a certain amount of hours, most shops just pay straight flat rate. The hourly shops are nice to work at in the winter and slower times so you know what you are going to bring home every week versus the flat rate shop just depends on work coming through the door and what kind of work it is. Plus the owners of dealership and indepent shops generally give themselves and technicians raises every year. The dealership that I was at had a $91 an hour labor rate last year and now is $95 as of the first of the new year. If everyone in the lawn care industry would do the same as car shops, plumbers, HVAC shops and electrical companies then there would be a ton more money to be made from the lawn care industry and you have to juggle half as many customers to make the same if not more money.

dwc
01-21-2006, 11:41 PM
I wish we had a book like that in the lawn industry. When you know your competition is going to charge 90/hour then why would you want to do it for 20/hour? Thats the bad part of it the way it is though, you never know how many of those 20/hour (or less) guys you are bidding against.
With the sorry job many of these lawn boy's do, I guess the only way they can stand out in the crowd is with thier next to nothing price.
One thing about it though, when Billy Bob gets canned from his job, he can't run to Sears and buy him up $100 of tools and start a mechanic shop! He can buy up a $100 mower and mow the neighbors yard though.
I think sometimes it's like a game with some people, just to see how low they can actually go just to break even. Some day they WILL understand just breaking even doesn't pay the bills!

When I had my sewer rootered a while back, the going rate was 60-65, and this was from 4 different plumbers! Just couldn't believe one of them didn't say 30. :)

PROCUT1
01-22-2006, 10:17 AM
I wish we had a book like that in the lawn industry. When you know your competition is going to charge 90/hour then why would you want to do it for 20/hour? Thats the bad part of it the way it is though, you never know how many of those 20/hour (or less) guys you are bidding against.
With the sorry job many of these lawn boy's do, I guess the only way they can stand out in the crowd is with thier next to nothing price.
One thing about it though, when Billy Bob gets canned from his job, he can't run to Sears and buy him up $100 of tools and start a mechanic shop! He can buy up a $100 mower and mow the neighbors yard though.
I think sometimes it's like a game with some people, just to see how low they can actually go just to break even. Some day they WILL understand just breaking even doesn't pay the bills!

When I had my sewer rootered a while back, the going rate was 60-65, and this was from 4 different plumbers! Just couldn't believe one of them didn't say 30. :)

Good post,

The scary part is not so much the cheap "mower in the station wagon" guys.

The real problem is the guys that are mid sized or viewed as pretty big that are working dirt cheap. I have a few of those guys in my area....I was one of those guys for quite a while..... They are still charging the prices that they were when they were solo and have no clue how to adapt and charge now that they have crews and overhead. Theyre barely scraping by afraid to raise their prices and " lose work"... Theyre on the balls of their ass and everyone else thinks theyre huge

General Landscaping
01-23-2006, 01:10 PM
One thing that comes into play with shop rate (for dealers) is that the manufacturer will pay XX% of shop rate for warranty repairs. The more you charge for "customer pay"; the more you can charge for warranty. (up to a point, the max. $$ is weighted for your area.)
That leaves the independent shops able to charge 70% or more of the dealers inflated labor rate.

As said before, it does'nt cost the shop much money to have a mechanic at work; so they load up the shop with as many people as it will hold. The plan is to keep more people than work, so the guys will stroke every ticket that comes through to make a paycheck.
Around here, a dealer will have a labor rate of $80-90, the mechanics will generally be paid $18-23 per flat rate hour. What happens to the other $60? If expenses are watched and dead weight is cast off; there should be room to make both sets of numbers more reasonable.

One thing to look at and learn from the auto industry is the relation between body shops and insurance companies. The insurers have driven the rate lower by taking advantage of weak body shop owners. The insurer will direct their claims elsewhere unless you agree to $XX shop rate. The insurer driven pricing has really wrecked the body repair industry's quality. This is an example of what happens when too many fold in on price and quality just to get work in the door. If 80% of the green industries work was bought by a handful of customers, we would be in the same condition or worse.

DFW Area Landscaper
01-24-2006, 03:41 PM
Right now, there is no comparison between the body shop industry and ours. My brother-in-law works for a large body shop in Tulsa and these guys are making a killing.

It is clear that "the book" is the differing factor between us and them. If we all had a book that told us the clean-up at 1247 Maple street will require an average green industry laboror 3.5 hours to complete, our industry would not be in nearly as bad a shape as it's in now. Our hourly rates would all be a lot closer together.

Heck, just look at the shrub trimming rates in my area. One landscaper is charging $25 per man-hour with no minumum, another is $33 per man-hour with a $100 minimum and I am at $36 with no minimum. Then there are literally hundreds of guys who will drive out to look at the shrubs and beds for free and then quote a firm price to do the job.

Our rates and terms are no where near as cohesive, in terms of percentages, as the auto industry's.

Later,
DFW Area Landscaper

Soupy
01-24-2006, 05:45 PM
Mechanics have more overhead and have to charge more or go out of business.

The problem in our industry is the lack of knowledge. New LCO's start up every year without putting any real thought into it. Lawn care was a good thing until about 5+ years ago (depending on market). People started noticing the growth in this industry and decided it was an easy way to make a buck. They didn't/don't realize that by the time the idea smacked them in the face it was a flooded market. Newbies just don't look at the supply and demand factor before jumping in, but will be the first to complain about it after it's to late.

UNISCAPER
01-24-2006, 10:01 PM
I'm going to side step the topic for one second here. Forget about mechanics, blue books or flat rates. Look at your services. For the past 10 years I live by the fact that if a plumber, electrician, carpenter or painter can charge $90.00 an hour and get away with it, so can a landscaper. And we do. And, we don't get every person who calls looking for quotes, nor do we want them. WE simply want to profit on every single job we do, and if someone has a problem with that, I don't mind if they shop elsewhere.

Back to auto mechanics. I personally believe that this book that has been created also is in sync with new car/truck sales. Manufacturers realize that they need to keep you buying new products in order to keep profiting themselves, so, the repair rates are such that when those nickle/dime items begin to occur, and escalate into $500-$1,000 items, you say enough and buy new. The real meat of the auto sales racket is not in manufacturing. It's not in repairs. It is in finance of the units. For the past 10 years all three of the big auto makers have made more net from selling juice, leases, Lojack systems, bed liners, plastic paint coatings and extended warrantees than they ever dreamed they would make from a car sale. For every line of juice sold, they get back 7-10%. For every extended warranty, they get back 30% give or take a little.

So, the auto mechanic is entitled to make a good fair living. Having had a father who was a mechanic, and being a back yard mechanic myself playing with our race cars, my tool investment could pay a sizable down payment to a new house. The real deal at a dealers shop is with the numbers and getting that person to get so fed up with repair bills they just trade their ride in and go new so they can sell them all that junk I just listed..

Roger
01-24-2006, 10:39 PM
Mechanic - Skilled trained schooled professional

Lawn boy - Someone laid off from one job with a few bucks to buy a mower and is now a "contractor"

The best explanation ....

Mowing lawns is not a skilled position requiring training and education, and a heavy capital outlay. We can sit here and discuss/debate what great stipes we lay down, how great the edging job looks, etc, but the general population doesn't put much significance to the matter. To be sure, some customers are picky, but they recognize no skilled training, education, large outlay of capital is required. People understand specialized services are worth more, but the run-of-the-mill grass cutter does not get very high on the value scale. People know that getting started in grass cutting can be done by many, many people, so it is nothing unique.

Having business acumen is something apart from a skilled, trained technician capabilities. Somebody's value may be much higher because good business wisdom is being demonstrated. Another's value may be high because that person brings good technical skills to the job, well trained and educated, much experience, able to solve problems or perform certain tasks well.

Our business requires some mix of both those components. If we were great business people, we would undoubtedly be running a business far greater than an LCO. Good business leaders and managers rise to larger and larger businesses through their career, often crossing business disciplines in the path. And, they are compensated for their business compentence.