I have my own repair shop and asked if I want to do some work for some other shops in the area. I have never done this and am curious how others approach it.
I have my standard shop rate - Should I give a discount to the music stores?
Should i charge a pickup and delivery fee? some of the shops are up to 30 minutes away.
Any advice would be appreciated.
Doing subcontract work for music stores is how I operate exclusively (with the exception of my corporate tech work and a select handful of clients that started as personal friends). It makes taxes incredibly simple and easy, as I simply have a 1099 for each client.
How you charge is up to you; I allocate 15% of my labor rate to the store in exchange for several benefits I stipulate (they handle all customer interaction, process all payments, agree to never give my contact info without specific authorization, the stores may only contact me through e-mail or text, etc), and I give the stores permission to add their own service fee. If I do a $50 labor job, I collect $42.50 from the store, and I collect my tabs for the previous month at the beginning of the following month. The time saved from never, ever having to stop what I'm doing to field a phone call is, in itself, more than worth that cost. Generally stores will expect either to get a cut of the action and/or be given the freedom to attach service charges to your fee or simply add to your fee and collect said addition; I'd advise caution against the extreme latter if you are operating in a context where your name/operation is attached to your service, or else folks may mistake the store's overfluffed prices for what your personal rate is.
Pickup/delivery charges should be evaluated as part of your overhead and taken in context with the volume of business you're doing, as well as your transit schedule and the volume/skill of local competition. Charging for transportation has the benefit of helping to cover a real cost for you. It has the potential detriment of possibly deterring business by increasing the cost for the customer/client. Personally, I don't charge any such fee, but I have significant local competition (which means stores have alternatives if they think I'm too expensive/demanding) and I drive a car with decent enough gas mileage to where I can make a roundtrip to most of my clients on less than a gallon of gas. If it's costing you $10 to do a roundtrip and pick up $300 worth of work, it's your call whether that's an acceptable "cost of doing business" for you or if you expect it to be recouped externally from the income of your repair work. Keep in mind that you can also levy a charge exclusively for small pickups/dropoffs; If there are fewer than 3 instruments or less than $xxxx worth of repair work, then the fee is tacked on. That way you don't end up driving 60 miles roundtrip on your own dime & time to pick up/drop off a single restring, and you create a financial incentive for the client to batch-out pickups/deliveries.
Thanks Todd, your experience here is helpful with my planning. You have addressed just about everything that crossed my mind for benefits and pitfalls and gave solutions and strategies to overcome them. You have taken a lot of guesswork out of it for me. Thanks again.
I used to do this and the split with the store was 60/40, so I was obviously getting ripped off if Todd's rates are anything to go by! Probably slightly different as I was working off standard guide rates they have for jobs, so I'd get 60% of a 'standard setup charge' even if, actually, the job didn't take very long. Starting out, it was great as I didn't have a customer base, no word-of-mouth, no Internet presence etc.
I really disliked not having interaction with the customer, though. You want to be there when they bring in the instrument, discuss what can be done, their needs. All sorts of stuff. Where and how they use the instrument. Tunings. Technique etc. You don't get any of that. Just the guitar. If I recommend a fret dress to someone, they will normally go with it, even though they 'just brought it in for a setup'. The guy on the shop floor isn't going to do that. Nor will he manage expectations: he's not going to say, "Well, this is a load of rubbish, so don't expect too much". He'll write, "Setup: 11s" because that's what the customer thinks he wants, but actually he's playing in open D and it'll sound terrible.
Good things: lots of work, no customer complaints, no constant phone calls and emails.
Thanks Kieth, your input is greatly appreciated. I have a well established shop in my area and have the interaction you are talking about. It does enable me to get the guitar playing exactly as the customer needs.
Did you find a way to overcome the non interaction with the customers to produce the results you wanted to give?
Not really. Every now and then I'd get the customer's number and have a chat with them over the phone, but at that point you're both dancing around the fact that you've essentially eliminated the middle man (the store).