Why do appliance repairs (dishwasher, laundry, fridge, etc.) seemingly cost as much as the appliances themselves?
In: 5618
BECAUSE GE AND SAMSUNG WANT YOU TO BUY A NEW ONE. I can design something to be easy to repair or impossible to repair. If I don’t get paid for repairs, why would I make an easily repaired appliance?
Tldr ; it’s expensive to run a business, and if you do the cost analysis exercise, you’ll quickly see that it costs money to simply exist as a business.
Because of labor cost. Driving a truck/van is not cheap on gas. Time to travel costs money.
Let’s say you’re an owner operator. A new Ford Transit F150 is 50,000 CAD, which works out to about $850/month for the financing. You also have to consider insurance, so another $300/month. Your contractor likely does a lot of driving, 2 tanks a week, (moderate), 8 tanks/month, so approximately $800 in gas a month. So, without even including actual practice insurance, warranties, parts, labour, taxes, maintenance, your owner operator is out $1950 CASH. So, a reasonable call of 30 minutes of driving/parking time, 1 hour diagnostic, that’s going to be about $30 for the COST of running that vehicle. Okay, but the owner needs to make some money too? So how much does he charge? Most trades in Ontario run about $40-50/hour. Let’s say he’s experienced, and he’s even saving you money by running solo. He doesn’t have a 2nd or an apprentice. So for him to just show up is $80. A typical new appliance is between $500-1000. Okay, for every hour he spends there, that’s another $50. The business likely needs a storage space for typical parts, so he’s leasing space in Toronto at $30/sqft (very reasonable). His annual cost is 30k for storage, which means his tiny (and I mean tiny) shop is running a other $16/hr in overhead. So we’re now $96 for the first 90 mins. The part, sometimes you can find them cheap, sometimes they cost a bit. Well, typically parts are sold at 200% cost. So a $50 part will cost the customer $100. You need to charge more because you have to have money to purchase additional parts, you can’t be using a part, getting paid at cost, then waiting for it to service the next customer. So, now we’re up to $146/for 90 mins for a common part swap, and this still doesn’t include the other things I mentioned. Tools, batteries, work clothes, PPE, website payment, business telecommunication, advertisement, and % of customer conversion. Sometimes you go out, give the quote, and the customer shops around. Even if your conversion is quite high, 70%, that puts the cost up to $208…. now think about future proofing the company. Are we thinking about adding a second work truck? Are we thinking about having a 2nd employee? Are we going to get small business benefits for our employees? Do we offer emergency repair (middle of night/holidays)? Do we need some savings in the business account for unexpected expense? Additionally, a corporation operating at exact cost isn’t likely to be considered successful by the bank, and that company revenue is important for future loans and financial flexibility.
BECAUSE GE AND SAMSUNG WANT YOU TO BUY A NEW ONE. I can design something to be easy to repair or impossible to repair. If I don’t get paid for repairs, why would I make an easily repaired appliance?
Tldr ; it’s expensive to run a business, and if you do the cost analysis exercise, you’ll quickly see that it costs money to simply exist as a business.
Because of labor cost. Driving a truck/van is not cheap on gas. Time to travel costs money.
Let’s say you’re an owner operator. A new Ford Transit F150 is 50,000 CAD, which works out to about $850/month for the financing. You also have to consider insurance, so another $300/month. Your contractor likely does a lot of driving, 2 tanks a week, (moderate), 8 tanks/month, so approximately $800 in gas a month. So, without even including actual practice insurance, warranties, parts, labour, taxes, maintenance, your owner operator is out $1950 CASH. So, a reasonable call of 30 minutes of driving/parking time, 1 hour diagnostic, that’s going to be about $30 for the COST of running that vehicle. Okay, but the owner needs to make some money too? So how much does he charge? Most trades in Ontario run about $40-50/hour. Let’s say he’s experienced, and he’s even saving you money by running solo. He doesn’t have a 2nd or an apprentice. So for him to just show up is $80. A typical new appliance is between $500-1000. Okay, for every hour he spends there, that’s another $50. The business likely needs a storage space for typical parts, so he’s leasing space in Toronto at $30/sqft (very reasonable). His annual cost is 30k for storage, which means his tiny (and I mean tiny) shop is running a other $16/hr in overhead. So we’re now $96 for the first 90 mins. The part, sometimes you can find them cheap, sometimes they cost a bit. Well, typically parts are sold at 200% cost. So a $50 part will cost the customer $100. You need to charge more because you have to have money to purchase additional parts, you can’t be using a part, getting paid at cost, then waiting for it to service the next customer. So, now we’re up to $146/for 90 mins for a common part swap, and this still doesn’t include the other things I mentioned. Tools, batteries, work clothes, PPE, website payment, business telecommunication, advertisement, and % of customer conversion. Sometimes you go out, give the quote, and the customer shops around. Even if your conversion is quite high, 70%, that puts the cost up to $208…. now think about future proofing the company. Are we thinking about adding a second work truck? Are we thinking about having a 2nd employee? Are we going to get small business benefits for our employees? Do we offer emergency repair (middle of night/holidays)? Do we need some savings in the business account for unexpected expense? Additionally, a corporation operating at exact cost isn’t likely to be considered successful by the bank, and that company revenue is important for future loans and financial flexibility.
This started changing many years ago. There used to be TV repair shops. The technology and marketing changed all of that. The technical knowledge for electronics understanding and repair diminished as single components became integrated circuits with multi layer circuit boards that make it fast and easy for manufacturing but hard or even impossible for trouble shooting and repair.
The electronics technicians became circuit board replacement technicians and appliances became additional landfill. Marketing, interest rates and sales are great contributors to this and maybe the question should be, “Why is my dish washer so cheap?”
We’ve become a throw away culture.
Mostly because appliances are stupid cheap nowadays, and labor is very expensive.
A dishwasher costs $500 (everything is done outside the US where labor is cheaper). Labor is roughly $100 per hour most places in the US right now (this is for a licensed and bonded trained professional though a business, not a handyman on craigslist wage). So anything that takes more than 5 hours work is a wash. You’re looking at at least a 1/2 hour in transportation, then a half hour taking the thing apart and another half hour putting it back together, and another hour to test it. That’s half the price of the dishwasher baked right into the repair estimate and it’s not counting the cost of even fixing anything.
This started changing many years ago. There used to be TV repair shops. The technology and marketing changed all of that. The technical knowledge for electronics understanding and repair diminished as single components became integrated circuits with multi layer circuit boards that make it fast and easy for manufacturing but hard or even impossible for trouble shooting and repair.
The electronics technicians became circuit board replacement technicians and appliances became additional landfill. Marketing, interest rates and sales are great contributors to this and maybe the question should be, “Why is my dish washer so cheap?”
We’ve become a throw away culture.
Just an FYI that replacement parts and their prices are available online. You can check the cost of the part. I find when repairs on appliances are expensive, it’s because the part is expensive.
You can usually estimate the labor cost because appliance repair people tend to have a service charge just to come out. If you pay for the service then they charge is applied to your balance. I’ve rarely had to pay an additional amount for labor over that amount—and cheaper parts are usually covered under that service amount.
Mostly because appliances are stupid cheap nowadays, and labor is very expensive.
A dishwasher costs $500 (everything is done outside the US where labor is cheaper). Labor is roughly $100 per hour most places in the US right now (this is for a licensed and bonded trained professional though a business, not a handyman on craigslist wage). So anything that takes more than 5 hours work is a wash. You’re looking at at least a 1/2 hour in transportation, then a half hour taking the thing apart and another half hour putting it back together, and another hour to test it. That’s half the price of the dishwasher baked right into the repair estimate and it’s not counting the cost of even fixing anything.
Just an FYI that replacement parts and their prices are available online. You can check the cost of the part. I find when repairs on appliances are expensive, it’s because the part is expensive.
You can usually estimate the labor cost because appliance repair people tend to have a service charge just to come out. If you pay for the service then they charge is applied to your balance. I’ve rarely had to pay an additional amount for labor over that amount—and cheaper parts are usually covered under that service amount.
Latest Answers