T Mack 1 - FSO wrote on 12/28/08 at 14:15:48:So.... do you realize that sometimes you can have that kind of Parts mark-up (100%??) and they could still be loosing money.
That mark-up pays for many things. Mortgage (or rent), wages of the administrative staff (mechanics get paid by the service fee but the secretary, parts counter guy & the accountant gets paid from the other charges), the money the Gov wants for each employee (unemployement insurance fee), Business Insurance, the electric company, the Phone comapny, Advertising.... etc etc.
It's one of the reasons I don't go into business myself. You need to be an established business or live at porverty level until the business takes off.
$1300 for a engine rebuild isn't too bad.
The Prev. Owner of my bike was given an estimate of over $2000 for rebuild because it needed a new psiton & new head. They tore it down and then gave the estimate.... He opted to sell the bike and cut the loses. I got a great looking bike with bad enmgine for $500.
All correct again! But OTOH, I've (briefly) worked for rip-off shops who did all kinds of underhanded things to increase their "markup."
The first when I was about 16yo, I went to work at an independent VW repair place. The guy had me pulling parts off of one persons car, cleaning them up, and installing them on someone else's car; then charging them for a "new" part! He even had me do it with complete engines!!! Pull an engine, hose it down with de-greaser; maybe touch it up with some rattle can paint: Instant rebuilt motor!!! He was shameless. If any of us employees were caught talking to a customer without sending them to him, we risked being fired. I didn't last a month there before I told a couple of people they needed to get their cars out of this guys lot before he messed them around as such. Then I went in the office and demanded my paycheck. He cheated me to of course!
Another HVAC company I worked for did the same thing with old furnace and A/C parts. Clean up old pulls from equipment salvaged from change-outs, and charge top-dollar retail for used parts! That outfit also "adjusted" the bill according to the neighborhood the job was in. Big fancy house = jack the bill WAY up somehow. Sell them a compressor they didn't need or something. Once again, conscience wouldn't allow me to work there for more than a couple of weeks...
But the "Overhead" of which you speak is also what has prevented me from pursuing my life-long desire to open a combination music and motorcycle store. I think the two adult toy stores together are a natural fit! But the mortgage/lease, insurance, utilities, more insurance, low margin from fighting on-line discounters etc... has stopped me for years. That, and the fact that I see, and sometimes attend closeout auctions of music stores pretty frequently. With so many mom-n-pop music stores going under, some old enough to have the mortgage paid, I figure: "What chance would I have?" I do know a couple of small town stores in well-to-do bedroom communities who make a decent living; but it is almost entirely on selling beginner instruments to parents, and then having a whole staff of drum, bass, and guitar instructors working from small studios in the back. If it wasn't for fleecing mom and dad to teach Johnny and Suzy to play, they wouldn't stand a chance of making a go of it. And even at that, the "teachers" are usually their own kids or nephews etc... and then mom does the books while the old man runs the storefront. It takes a whole family and their friends to keep the doors open. And they're lucky if they can afford workers-comp and health insurance after all the aforementioned expenses. And as if all that weren't bad enough, the current struggling economy has "Luxury" items like Music Instruments, and "hobby" cycling down for the count!
Had I jumped into a combo low-end music instrument, and 50mpg+ moped/scooter business when the gas was sky high; the new lower gas prices would be putting me out of business now as we speak! (An idea that I seriously considered!)
ADDITION to this post:
To get back to the original issue (ie, the op's "valve job") I still say if it was done right, it may not have been that bad of an investment.
But as with T-Mack, I got a heckuva deal on my "chopped" 99 savage by buying someone else's troubles. The Alt/Gen Stator winding was bad, and his shop wanted some $650+ for a brand new one and labor.
He sold me the bike at a bargain so he could go on about his business.