FROM OUR READERS:
Resisting the Body Shops
I just finished reading the article “Invasion of the Body Shops” in the July/August 2003 issue of AGRR (see page 24). I would just like to respond and maybe I can help others dealing with this issue.
My family-owned business has always had an excellent rapport with body shops, dealerships, insurance companies, etc. Even if our margins are cut close, we treat each other as if we were all making a bundle.
Give everyone great service and be fair—if you do this, body shops will not even consider installing their own glass. We also have found that by explaining what can be charged out for labor and the materials used, and also explaining the hazards of unsafe installations, body shops will have a quality glass shop furnish and install their auto glass.
Remember, be fair and put yourself in their shoes. More importantly, don’t give them a reason to even think about doing their own glass work. I am not saying this will work for everyone, but so far it has worked for us. Good luck.
John C. Bender
It’s Raining “R” Parts
In Catherine Howard’s July/August 2003 article (see page 6), she writes that the NAGS “R” part strategy made a lot of sense “in theory,” but I beg to differ.
First of all, Howard says that NAGS uses “market acquisition cost (derived from [its] research and analysis)” to determine what the “R” part prices should be.
Since NAGS is well aware of what discounts are being requested (and demanded) by our insurance company customers, and the company feels that it knows what our costs are, it is determining what our profit should be—how nice.
Howard notes that some “R” parts, using regular cost factors, will have “outrageous list prices, particularly in comparison to the published dealer lists.” So what? Fair is fair. The insurance company will not allow us to charge the dealer’s labor time or the dealer’s labor rate (about $90 per hour in the New York area), so why should we have to consider the dealer’s list price? It seems that NAGS feels the insurance companies have the right to take “one from column A and one from column B.”
As a small shop owner, I’m not opposed to selling glass at the dealer’s list if I can charge dealer labor time and rates. I just can’t make a living charging for dealer’s list price and giving labor away at less than my actual costs.
As long as the insurance industry refuses to allow us to charge a reasonable labor rate, we might as well admit the obvious ... we need these outrageous list prices to make a living.
One thing actually frightens me about Howard’s article. She says that if NAGS stops publishing labor times, “Shops would have to charge for the service of installing the glass since there will be NO margin for labor in the NAGS List Price.” Does this mean that it is going to lower the list prices to the point of pain?
My request to NAGS is simple. Please publish a fair list price based on the published pricing from the major auto glass manufacturers, and stop looking into our pockets and telling us how much we should make or how to run our businesses. We have little enough power as it is.
The “NAGS Notes” article in the May/June 2003 issue of AGRR (see page 8) really takes the cake. Now, in total contradiction to what NAGS has said/written elsewhere for years, Catherine Howard writes that every NAGS part “will become an ‘R’ part.” Previously, you blamed the existence of R parts on the manufacturers for changing their pricing after the calculator was re-done. This is belied by the fact that NAGS calls them “R” parts (code for miscalibrated pricing)—duh!
Howard now says, “This process will extend over the course of several years.” Why? Howard says this is supposed to “allow the market to adjust to this transition.”
Is this for real? Who benefits from 50-percent screwed up “benchmark” pricing? It’s kind of like being half-right and half-wrong—a benchmark? It’s a flip of a coin at a casino.
With great fanfare, NAGS instituted a Revaluation in 1998 that was supposed to result in a consistent system of benchmark pricing. NAGS obviously lied to us then in saying that it wanted consistency, because NAGS has given us the exact opposite. And, now, with its promise of many years of an ever less-consistent and less-accurate NAGS with ever more miscalibrated “R” parts, Howard is proving again that NAGS is a scam.
The very calculator itself is damning evidence—any notion that NAGS is a legitimate benchmark is totally false. Howard’s own statements in this article that contradict her previous ones would make any government spokeswoman blush. I will give her some credit for the last section, in which she refers to her article as “this harangue”—she has that right.
I have had enough. If you think that auto glass replacement shops are going to stand for this, you are sadly mistaken. We are not. You can only push people so far, and NAGS is way beyond the limit. When this issue is examined in an investigation or lawsuit, how will you defend the indefensible?
The $64 million question is, who owns and controls NAGS (and its parent company, Mitchell International)? And, who is benefiting from this situation of shell game pricing? It’s time to turn on the lights.
In Favor of MSRPs
I read Catherine Howard’s article in the July/August 2003 issue (see page 6), and I think manufacturers’ truckload prices seemed easier to work with than acquisition costs do. This is a long death march, indeed!
Center Line, Mich.
Bravo for Online Buyer’s Guide
I just wanted to say thank you. I used your Online Buyer’s Guide today (available at
www.agrrmag.com/buyguide.asp) and the way it as organized saved me $500. So, I just wanted to say thank you, and have a great day.
Glass Plus Inc.
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