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About this blog

General info on owning and operating a retail store, pro's and con's, life issues, observations, or whatever random things I feel compelled to write about. 

 

Entries in this blog

Lorainfurniture

This may cause a bit of a stir with you guys, but Ill discuss it anyway.   Some of you are staunch users of genuine, OE, brand name appliance parts.  I am not one of those people.  Appliance parts is an expense in my business second only to labor.  My rough guesstimate is that I spend about $50,000 a year on parts. If I used exclusively genuine, new parts that figure could easily go up 20%.  Perhaps even more. 

Control boards: 

You can go new, genuine, and pay $200 for it +$60 core, or you can buy direct from core centric (or others) for $98, no core charge.  Sounds like a no brainer eh?  Well, its more complicated than just money.  

1. The defect rate is definitely higher than new.  I have purchased hundreds, and hundreds of reconditioned boards form core centric.  I would say that 1 in 50 will go bad within 30 days, or be bad out of the box.   I can honestly say that I can't remember EVER buying a new board from Servall that was bad out of the box.  

2. You are charging your customer "new board" money.  I was having a moral dilemma with this one for a while.  I was able to find a great solution to this.  Guarantee your work parts+labor for 1 year.  Chances are that you will never hear from them again, I have only had 2 call backs that were in the 60day-1 year timeframe.  The bottom line is this: You are offering your customer MORE than what they would get with a "new" board, and you get to make more money. 

3. The core charge.  I, like many of you, have had north of $500 is core money sitting in your van.  That sucks.  Buying a refurbished board saves that dilemma.  Its all about keeping more money in your pocket!  

 

Non-complicated generic parts:

Lets talk about the Direct drive lid switch part # 3949247.  I use at least 3 a week, between COD calls and my shop.  They cost $16.29 at Servall, I get them generic for $2.20. That is a savings of over $14!  I have been using this switch for about 2 years, and I have installed a few hundred, at least.  I have had ONE fail me.  It wasn't even broken, the casting was filled on one of the mounting holes.  If you calculate $14 x the 300 or so I have used so far, you will conclude that I have saved myself over $4200.   I can apply the same thing to couplings

285753: servall: 6.89, generic $1.50.  

285785 14.50, generic  $6.50 

3363394 15.60, generic $6

Im not even going to tell you how much a complete duet water pump costs.  (hint: its less than $20) 

 

Id like to mention one part specifically, GE gas oven thermostat WB20K8.  You can get it at servall for $86, or you can buy it from ERP for about $65. I know, its only $20.  The thing is this:  Both of those parts are made by the some company, Harper Wyman  They are the EXACTLY the same part. one comes in a bag, one in a box.  

 

I have used many hundreds of these parts, and find them to be as good, or better than genuine.  Again, you will get the very rare premature failure, but its more like 1 in a hundred with this stuff.  If you are using this stuff by the dozen, it makes sense for you financially to use it.  

Electricky complicated stuff like sensors and door locks. 

Quite frankly I don't use them.  I had a bad experience with some VMW lid locks that were dirt cheap, like $16.  Problem is that none of them worked.  I don't use that many of them, so the saving is not that much to me.   Ref sensors are dirt cheap for genuine, so I would rather buy those.   I will eventually warm up to them again. It takes time. 

 

Conclusion: 

There is a time and place for generic parts. I genuinely believe that there are some aftermarket companies that truly want to make a good product, and want to end the monopoly that is OEM.   Some companies are out there selling cheap junk.  You have to try out a company, or a line of parts before you buy in bulk.  For me its worth the slight aggravation based on how much extra money it puts in my pocket every year.   Ultimately you should do what you think is best for you and your business.  

 

Lorainfurniture

Money and slavery. Why money is the burden.

Not to get too deep and philosophical on you guys, but I was/am trying to figure out the relationship between money and modern day slavery.  

Yes, I said it.  You are a slave, I am a slave, and likely everyone you know (there are some exempt from this) are enslaved.   I was free once, and at one point I believe that most of us were free, even if just briefly.  Ill get to that in a bit. 

First it was "slavery", then It was called "indentured servitude", now its  "career"

You are probably thinking "I'm no fucking slave! " but think about it like this.  What are you doing tomorrow? Probably working.  What would you rather be doing tomorrow? I can write a small novel about the things I would rather be doing other than working.  The issue is that you need money.  Why? because you have bills, and you need to eat/ feed your family.  Money today is as much of a necessity as food/water/shelter.  No work= no money= no food= no survival.   This applies more to people who work hourly or salary.  You work all week, and in return you are given X money. Wipe that taste of freedom out of your mouth.  You can not do as you please with that money (realistically), you need to pay your mortgage, car note, insurance, and food.  In the end, you are left with a few pennies to spend on something you might actually want.  You are encouraged to buy the bigger house, the nicer car, "keep up with the jones's" type shit.  Get yourself so far in debt that you literally will have to work until the day you die, and you still didn't pay your debt.   Pass it on to your kids.  Once you live within 90% of your means, you can't afford to take a single day off.  Lose your job? you are 30 days until your credit cards a maxed, and now you can't make your mortgage payment. " Not working" for this type of person is simply not an option.  

When you have no option, you are being compelled, or forced to do it.  How different is it from the whip? 

People have brainwashed themselves in to loving their "career". Its a coping mechanism. Your brain is trying to combat depression.   Sure, I like fixing shit, I get a sense of satisfaction from it. But let's not think for a fucking second that I would not rather be touring Europe, or laying on a beach somewhere. If you truly would rather do your job than anything else, Im sorry my friend, you drank all the Koolaid and I can't help you. 

When I was about 20, for a few years I was free.  I didn't really know it, or appreciated it.  I lived with my parents, I had no debt, and I was making a shit-ton of money as an antique/ furniture/ appliance dealer.(in that order)  I went to Greece every summer, usually for about 2 ish months.  I came back to a pile of cash, literally. In the early 2000's everything was basically cash or check, and I didn't really accept checks.  I didn't have to work.  I worked for the sport of making money.  I certainly was not wealthy, but my need for money was ZERO.   All of the cash I made was mine do with what I saw fit. 

Needless to say that gravy train started to come to a halt around 2004, when the recession REALLY started.  Antiques became worthless, and I had to pivot more to the appliances/ furniture.  I met a girl, bought a house, got married, had kids.   Slowly I find myself in need of more money.  I must go in to work more.    The burden started weighing on my shoulders. 

 Im at the point right know where I *think* I don't have to work, but really I do. My chains are not as heavy as most, but I am still shackled. 

When you make so much money that the thought of "paying bills" never enters your mind again. You don't have to think for a second whether you can afford to go out to a fancy restaurant and order a $100 bottle of wine to go with your steak.  The thought "lack of money" never crosses your mind.   You go to work because you like making money. Making money is exhilarating, and I can only begin to understand that.

 

So, now what?  How to break the chains? Release yourself from the burden of money/debt? Here is my easy yet impossible answer. 

 

1. Eliminate your debt.   The ultimate iron collar is your mortgage.  Borrow $200k, pay back $600k.  No shit.  $1500/ month FOREVER.  You are not going to stay at that house for 30 years, the banks figured out that you will move every 7.5 years.  Ironically that is the time it takes to pay most of the front end loaded interest they push on you with that mortgage.  8 years in to it you barely knocked a few grand off the principle.  You move and the clock resets.  30 more years.   Its not a mortgage guys, its rent, but you are responsible for all the maintenance.  Its what all us landlords hope for: A triple net lease. 

Credit card debt is just a bit worse, you can negotiate with them and change your terms.  Pay it off.  Car notes are simple interest. i.e., you pay a fixed amount of interest for the entire loan.  

If you need a bit of motivation, add up how much interest you pay every month.  it will blow your mind. 

This first step is where 90% of you will fail.  People feel the need to compete, whether its to have the nicer car, shoes, purse, etc.  The worst part is they want it NOW.  So that $800 purse you just charged on your credit card will end up costing you $2400.  Or, you will "consolidate" your debt and roll that purse in to your 30 year mortgage.  Brilliant thinking on a purse that is realistically only worth 5 bucks worth of leather.  The rest is perception.  This is a hard thing to overcome.  It took me a long time.  

2. Make more money.  The goal is to have an excess of money.  The more "extra" you have, the less it will weigh you down, and actually start opening doors.  If you work a salary job, you can't really change much.  Get another job.  Go scrapping, Uber, whatever.  Personally I can't understand how people can work for only X dollars per week, no matter how much you work? It sounds like a recipe for lazy.  Once you increase your cashflow, you can decrease your debt, and further increase your cashflow.  Its like a snowball of money.  

 

3. Adjust your lifestyle.  If you haven't made your first million by age 30, chances are you may never.  This doesn't condemn you to a life of servitude, only if you continue to ACT like you are rich.  I don't live in a rich neighborhood. I do not desire expensive clothes.  I don't care what kind of car my neighbor is driving.  I don't need to show my money to anyone to get some sort of acceptance or validation.   Everyone is putting on the facade of being well off, how many times have you been in that McMansion and they lose their mind over a $300 repair bill?  These are the same people that are a paycheck away from homelessness.  They just drive a Lexus in the meantime.  

 

You can live a really good lifestyle off of a minimal amount of money.  Think about how much money you would need if you had ZERO debt.  No mortgage, no car payment, no credit cards, no student loan.  Now imagine if you stopped buying those ridiculous Gucci bags, or Nike shoes.  Sure, buy the things you like, but don't buy things just to try and achieve social acceptance.  In the end, everyone is lying to everyone, and the only truly rich one is the guy selling the Gucci bag.  

 

 

Lorainfurniture

The eBay store, is it worth it?

This could be quite possibly the most boring entry I ever write.   The exciting world of the eBay store.   

 

So, you have a shit-ton of appliance parts, you want to turn that in to cash. How?  Sell it on eBay!  So lets start with the very basics.  You need the following:

1.internet

2. computer with printer

3. a "smart" device i.e.. tablet, iPhone, etc

4. shipping supplies, tape, boxes 

5. shipping scale

6. shelving. 

7. a fancy table with good lighting, preferably on a grid 

 

This is the BASIC set up.  No need to drop 10 grand on an operation that is making you ZERO dollars.   You can start off on eBay as a basic seller, and upgrade your membership as your business grows.   Great, so you signed up, got your fancy table, and you want to list that enormous pile of direct drive washer motors you've been looking at for ever.   First you have to sort the 2 speeds from the 3 speeds. Any that are too chipped or corroded looking, don't bother. It will turn in to a return. (more on that later) 

 

Now you have to find the most relevant part#, add that to the listing.  Take your pictures, and add any other relevant part #'s you can find.  How much to sell it for?  Just remember this: people on eBay are shopping on eBay because they are cheap.  If you are not going to list it a penny cheaper than the cheapest one currently listed, just throw it away. (there are exceptions).  Believe it or not, DD motors don't sell for much.  Worse yet, they cost a lot to ship.  A part that sells for $30 dollars will cost you $15 to ship, and eBay takes 10% off the top ($3).  Paypal will pinch off another 3% So in the end, that $30 sale really only put about a $10 bill in your pocket.  Why bother listing it? Well, if you have 10 of them, thats $100.  And that is sure as hell more than you will get at the scrap yard.  Plus, shipping costs vary, you might get a sale going one state over and the ship cost might be $6.  You really just don't know.   I send everything out free shipping. 

NLA parts: The exception.  If you have it, and no one else, you can ask whatever you want, even double, triple retail.  I found a stash of these old amana fridge power boards, NOS. I sell them for around $450, which is at least double retail.  They sell slowly, but they sell.  On the other hand, sometimes the customer can be just as rare as the part.  use your judgement . 

As the volume increases, it becomes more "worth it".  When I first started the eBay store 2 years ago, I quite literally started it myself, on my iPhone, using a 20 dollar scale and my home printer.  once I realized the money, I quickly moved the operation in to my store, and hired a guy.   Now I have 2 dedicated eBay employees, almost 3,200 listings, and dozens of packages going out every day. 

I currently average about $300 a day in sales, 7 days a week. More recently it has been $200, but before its been about $500.   At $300/day I'm sending out about 10-20 packages. 

 

So here are the numbers, these are this year, YTD. 

Gross sales= $69,000

Expense= - $40,000 (this is eBay fees, shipping, paypal , returns

shipping supplies= -$1,800 ( i still have plenty of these shipping supplies, likely 6months +) 

labor/payroll=    - $16,400. 

 

Total profit this year is about $10,500.   I feel like this number could have been a lot better, however, I hired a person who was basically incompetent.  Out of my 3200 listings I would gamble that 1/2 of them are fucked up.  Nobody will buy your stuff if it has a bad picture, incomplete part #, etc.  Still, That works out to about $1300/ month, and Im not doing anything other than parting out the appliance when I condemn it.  This whole operation takes up about 600 sq feet of my shop.  

Returns: 

They suck, the people suck, and they are fucking liars.  Inevitably you will have some fucktard buy a "timer switch" because their washer wouldn't advance in to spin.  Just give them a full refund. Do it immediately.  If you don't, they will ship the part back to you at your expense, and you will end up giving them a full refund anyway.  Fuck it.  just give them a refund right away and try not to think about it anymore.  

Shipping:

Almost as bad as returns.  Its expensive, and if you actually want to sell shit on eBay, it should be on your dime.  Save yourself the complications.  Offer free slow poke shipping, offer an expedited upgrade for several dollars more.  There will be some packages that you will actually LOSE money on.  Take it to the chin like a man and move on. 

There are a couple of side benefits to this business. 

a. extra "paid for" employees. (last week I sent the eBay guy on the delivery truck because one driver called off)

b. once in a while you will actually use/need a part that you actually have, and would have never saved otherwise. (not as often as you would think though!)

c. builds value in your business via inventory and daily cash sales. 

d. You can brag about being Green, saving many tons from landfill 

e. You will get more foot traffic for parts sales, once the word gets out. 

In conclusion:

I was surprised on how small the bottom line was, I'm sure you are too.  As i write this, I consider the benefit of having that space empty, filled up with more new/ used appliances.  Is $1300/ month worth it?  I really don't have the answer for that.  Im going to continue my eBay store, at least for one more year.  Once I get all my listings corrected, then I can make a judgement on the cost / benefit.  

For those of you thinking about doing it, I say go for it.  It isn't easy, and you won't actually make any real money for about 6 months.  Its a pretty hands off operation, so it becomes like a passive income.  You can try it for a year, if its not for you, can can simply stop listing.  The stuff that you have listed will still sell, so you can still make money even after you stop working your store.  All you will have to do is ship. 

Learning everything the hard way, I would advise the following:

Don't list anything worth less than $20, unless you have a lot of quantity. 

Try and keep it to one or 2 employees, and try and get them to do other things at your store, like answer phones, clean etc.  

I feel like the sweet spot is bout 2,000 listings, with 1 employee.  Its manageable, not too much space, and you can still make nearly as much as you would make with 3000 mediocre listings.  Right now I have one full time lister, and 1 part time guy that basically just does shipping. 

 

You are not going to get rich , but if you have some dead space in your warehouse, and need someone to answer your phone, this might be a win-win.  

 

Any questions comments criticism ? 

 

 

Lorainfurniture

This little tidbit applies to basically every facet of your life.   What do you really need?  Of course, the answer is very simple.  Food, water, and shelter.  These are the 3 very basic things a person needs to survive.  When I say survive, I mean literally not dying.  This is not living, its just not dying.   The key to "living" is the first 3 a written above, and add two more: companionship and MONEY.   Money can provide you with all the material things that you need to survive, and companionship can give you your sense of love, purpose, socialization, offspring, etc. 

------Switching gears a bit.-------

 A few months ago I got a call from a lady, asked if we bought appliance parts.  She proceeded to explain that her husband was a repairman, and that his van was full of parts, as well as the basement.  I jumped in my car and got over there.   

Literally, hundreds upon hundreds of timers.  If I had to guess Id say roughly 4-500.  JUST TIMERS.  There was a huge variety of stuff.  Enough to fill up a 16 ft box truck 3/4 of the way, waist high, and still didn't touch the van.  If I had to take a wild guess, this guy had at least $50k in inventory.  Just for the record, all of my numbers are wholesale (his cost) numbers unless otherwise noted.   All of this shit was more or less stacked, kind of organized in a chaotic sort of way.  Bottom line is that I was 100% sure that that guy lost track at some point and had no real idea of what he had.  

 

This is the problem.  The guy had a basement full of parts that he paid cash for, and was now being sold for $300.   Not a good ROI.  Not one of those parts was newer than 20 years.  All that shit just sitting there getting eaten up by mice.  Imagine if he would have invested all that cash in the stock market, or a mutual fund.  How much is $50,000 in 1970's money worth today?  

His wife had to sell the house, as she couldn't afford to stay there.  The guy worked until he died.  Never saved for retirement.  Now here she is moving in to a 1 bedroom apartment. 

 

To all you technicians: What is the point of hoarding parts in you basement? if its not in your van, your got to go back anyway.  No FCC.  Most appliance parts stores can get you your part in a day or 2.  I can completely understand the fast moving parts, like the 341241 dryer belt, ignitors, etc.  I usually buy in bulk if there is a deal to be had.  Last year I was able to buy 20 of those common ge boards for around $80 each.  Things like that are perfectly ok.  Timers, on the other hand, not so much.  Most will only cover 1 or 2 models, and they rarely go bad to begin with.  I do not stock a single timer, anywhere.  

 

The bottom line is this.  You can do a lot better things with your money than investing it in a depreciating asset that is appliance parts.  If its not in your car, you might as well let servall hold that depreciating bag.  They also have more space than you and can do a lot better job of keeping inventory.   You don't need a huge parts hoard to survive.  In fact, its just bad business. 

----------

I used to own a lot of things.  At one point I had 5 cars, a basement full of parts, and other stuff, a garage that was almost impassable.  Even my closet was full of clothes that I never wore.  All of these things exist in your mind just as much as they exist in real life, in the sense that if your garage is cluttered, your mind is as well.   One of the most dramatic changes in my life was the day I emptied my garage.  Just threw it all away.  I kept my tool box, lawn mower, and about 3 other boxes of "stuff".   Throwing all that stuff away made me feel sick. Sick like when you know you are throwing valuable things away.  That kind of sick.  Now the stuff is gone and my mind is clear.  I feel better. 

"What if I threw away something that you needed?" , Good question.  Ill just buy it again.  

Instead of having 5 shitty cars, I have one that is "good", and one that is "great", both Mercedes.  I had 5 cheap suits.  Now I have one tailored suit.  

 

Think about how much junk you have laying around in or around your house.  Pretend you die tomorrow.  Your wife/son/daughter is going to deal with your mess.  They don't know that control board is NLA and worth $550.  They are going to sell it to me for $5.  Or worse ,throw it away.   Further, you are burdening them with the responsibility of dealing with something you should have dealt with a long time ago. 

 

As an estate liquidator I can tell you this.  Im coming in your house, and with one sweeping motion I will empty your entire china cabinet in to a garbage bag. I will continue to do that until your house is empty, at which point I submit your children a bill for the cleanup.   Your children don't want your stuff.  They have their own lives, their own stuff.   Get rid of your junk and leave your kids a bank account full of money instead. 

Lorainfurniture

This part is a little bit more "food for thought" than sound advice.    I have been a shop owner for 15 years, and for the first 13ish years the only type of "service calls" I would do is warranty repairs on the units that I sold.  Officially, I can say that I have 15 years experience fixing appliances, but the truth is, I have been serious about service work for about 2 years.  I really put my try-hard pants on about a year ago.   Why am I telling you this?  Its because you need to understand that I have bias towards being a shop owner.  Its essentially all I know.  

At some point I got a little bored playing shop owner and decided to build up the service end of things.  I bought a car magnet, a few pairs of dickies, shubee's. Now Im a professional, right?  

I have a vivid memory of walking in to my first VMW washer and having absolutely no idea what I was looking at.  I told myself never again.  I finally stumbled upon this little gem of a website and finally started learning something.  Now I like to think I am proficient at most appliances, and what very few pose a challenge I can easily work through it with the help of this site, and my ability to somewhat read a wiring diagram.

Pro tip: If you can't read a wiring diagram yet, stop reading this and start learning how to read a wiring diagram.  It really is that important.  Go on, shoo.  

 

So now I find myself a couple of years later moderately busy doing service work.  I do about 6 calls per day, one or two of them are warranty service from my store, 4 are cod.  Out of the 4, maybe one or 2 will be a return trip (have to order parts).  At the end of the day, I usually walk home with 2-3 calls complete, cash in hand.  My average ticket is about $225, with my net profit being around $150 ish.   Somedays I make $1200, other days I make $0.  this is the nature of the business.  So by my very, very rough calculations, I make roughly $1000-2000 per week doing service.  Its a decent living.   If I wasn't burdened with my own "warranty" work from my store, I could do better .  I am also kind of lazy, in some crazy hard-working sort of way.  I take a lot of breaks.  Hunt for Pokemon? 

Today I made 2 trip charges at $60 each.   Yesterday I pulled in $900. 

 

Doing service work is very appealing in the fact that I get to drive a lot ( I drive a Mercedes as a work vehicle), I make CASH, and best of all,  I can essentially run this entire shin dig out of my car, and cell phone.  No rent, employees, advertising.  Truth is, as a one man show, you don't really need anything.  Just a phone number and a good reputation.  Workers comp is optional, you can have some minimal bullshit insurance policy. You can make a really respectable living with essentially no overhead.  No bullshit. No drama.  Other perks include: Days off, go home for lunch, working in nice, air conditioned homes, and more.  

 

Service work drawbacks: You simply can not work an 8 hour day.  Sure, you can do service calls for 8 hours, but what about scheduling? ordering parts? Blogging on Appliantology at 11 o'clock at night?  Appliance repair requires you to be "all in".  you have to keep up with the service bulletins, the ever fucking changing way of how a washer washes clothes.   At the end of the day (week), you worked 40 hours, but in your mind it was more like 70.   In case you were wondering $2000 divided by 70 is $28.50 per hour.   Sure, you just pinched $200 profit off of your last job, but really, how much time did you actually spend on that call?  Initial call, scheduling call, model research, pregame diagnosis, executing the repair, driving to and from the job, follow up call?  Thats a lot of time.  And when you take that time and divide it on your NET profit, its not as lucrative as you would think.  

Number one drawback of being a servicer: You don't work, you don't get paid.  This is a serious problem for me as I really enjoy NOT WORKING.  

 

This is the part where I tell you you should be a shop owner, sell used appliances, make millions, right?  Not exactly.   Owning a small business is fucking hard.  70 hours a week is an easy week.  I wake up in the morning and I'm thinking about my store, and I'm going to sleep thinking about my store.  Dreaming about one's business is somewhat normal as well.   A retail store becomes somewhat of a prison in the sense that someone MUST be there when you are open.  That person for the first many years is likely YOU.  No lunch breaks, no shit breaks (unless you are some record setting speed shitter), you must answer the phone by the third ring.  You must be pleasant, ALL THE TIME.  You must be present ALL. THE. TIME.  Your duties include: Cleaning appliances, fixing, ordering parts, loading delivery truck, calling deliveries and scheduling, taking service calls, scheduling replacements.  Don't for get to pay your sales tax in time, they only send you a reminder AFTER its late, and penalty is assessed.  Pay lights, gas, phone, (don't forget to renew the contract annually) insurance, calculate hours and wages.  Deal with the pleasant customers, deal with the asshole customers.  Deal with the stinky customers, the ANGRY customers.  You essentially have to do it all.  Not essentially, you really have to do it all. Oh, and the delivery guys lost their drill.  Make sure you pick one up on the way home. 

It gets easier.  about 7 years in to it, I got rid of my partner, ( this should be another blog on how BAD it is to have a partner, or at least, the wrong partner) and things started to get easier.  I started making more money.  I found out about this wonderful feature vendors offer called AUTOPAY.  I started making more money.  I embraced Square software, started delegating more work to employees.  I started making more money.  Most of the day to day operations become automatic.  Not like it handles itself, but you do it automatically.  

Today My store made $1400, +$480 on the Ebay store.  yesterday was $580 + $450.  Some days I lose money, other days I'm too busy counting it. 

By year 11 or 12 I finally started to reap the fruits of my labor.  I was making very good money, and not working very hard at all.  It was shortly after that brief stint of boredom that I decided to become a servicer.  

 

I have taken both professions seriously at this point and I have the following observations:  

1. Doing service work will put cash in your pocket next week.   Running a store will put ALOT of money in your pocket in 10 years.  

2. As a servicer, you will work until you die.  I don't see retirement in this field.  How many of you self employed servicers are putting money away in a 401k? Property?  Answer is probably very few.  At the store, your brand starts to build value, inventory, reputation, sales figures. etc.  Ultimately, I don't think even this will be enough, so I bought many rental properties to augment my income, and secure my retirement.  I just don't see how this is possible as a servicer as there simply is not enough money to go around.  

3. In some sort of fucked up way, I find being a shop owner LESS stressful than servicing appliances in home.  I always fear damaging a customers home, or messing up a repair in some sort of dramatic fashion. Or plain old looking like a dumbass.    People are fucked up, and when it comes to money, they'll cut your throat for that dollar.    If I fuck up an appliance in my shop,  its my appliance so who cares.  I paid $40 for it.   

4. Being a servicer allows you a lot of freedoms.  You are not tied down to a single location.  You can go pick up your kids from school in between service calls.  This is not an option as a store owner.  

5. The money:  As a servicer, I just can't see one making more than $120k a year.  Even that I believe is a stretch.  If any one can give me some good hard data on this, I would love to know.   A well run shop can make  double that.  Im talking NET, take home, bottom line cash profit.   

 

Like I said in the beginning, take this in for its entertainment value only.  You do what you think is best for you, or what you prefer doing. After all is said and done,  I like being a shop owner, with servicing in a close second place.   There is no right or wrong answer, you do what feels right to you. 

 

Anything else you want to know? comments? criticism? funny jokes?  Reply! 

 

 

 

 

 

 

 

 

 

 

Lorainfurniture

Warranty, returns, and replacements.

Warranty:

Do whatever you want with this one, but think about this:  I can go buy a new washer with a 1 year warranty for $400.   Why would I pay $200 for a 20 year old washer with a 30 day warranty? My recommendation is a minimum of 90 days, with a maximum of 1 year.  I currently sell all of my pre-owned appliances with a 6 month warranty.  I also have a "refurbished appliance" section which is the same exact merchandise, tested in the same manner as my pre owned stuff, just they are always 100% complete, and typically less than 10 years old.  I give a 1 year warranty with those products.  

"1 year warranty!? are you crazy?! You are going to put yourself outta business!!"

 Ive heard that shit so many times, I literally laugh all the way to the bank.  Adding more warranty is the only way you can add VALUE to your merchandise without adding dollars.  A dryer with a 30 day warranty is $100, 6 month warranty is about 175, "refurbished, with 1 year, now you can compare to new, and ask $250+.  So what if you got to go out there once and put a $6 thermal fuse in.  That extra $150 you made off of the same unit just paid you for your service call.  All those extra $150's will cover that occasional $200 control board you get stung with. 

The bottom line is this: You should be fixing, and expecting these units to last your customers a minimum of 3- 5 years, so whats the problem? 

 

Your warranty should be basically unconditional. You can put a clause for flooding, roach infestation, commercial use, but you can't tell your customer that their warranty is void because you suspect a power surge, or because you think they are over loading/ over using it. That sounds shady, and there is no real way you can prove it.  After you pull the sock out of the pump, tell the customer " this time ill cover it under the warranty, but if it happens again Ill have to charge you".  The customer will understand, and be grateful.  Same thing goes with a thermal fuse.  Tell the customer the vent is clogged.  Fix the unit, leave the vent disconnected and tell them not to use it until they get the vent cleaned.  You never want to give the customer the impression that you are trying to weasel your way out of your warranty.  As far as I'm concerned, the hard/ expensive part is driving to the customers house and diagnosing the problem.  You would really lose your customer over a 5 dollar thermal fuse?  A 3 dollar coupling? Fix the shit and move on with your life.  

 

    I require the customer to keep a copy of their receipt.  I TELL THEM WHEN THEY BUY THE APPLIANCE that they need to keep the receipt for the warranty.  This does give you an out, if they lost their receipt.  Occasionally you will get a real ass-twat, and you can say " Ma'am, you need to find a copy of your receipt, and as soon as you find it, give me a call and ill come right out.".   This is not really something you should be doing, as you will lose this person as a customer, and they will talk bad about you and your company as long as they can remember.  I can honestly say I pull this card maybe once every other year. 

 

You don't need to verify the warranty before you go out.  Simply ask them: What does the date say on your receipt?  If they say they bought it X months ago, they are likely telling you the truth.  In my experience , about 95% of the people who call for warranty work are completely honest about it. Reciept or no receipt, fix the unit, make the customer happy. 

 Remember that date you wrote on the back of the appliance? This is how I know how honest people are.  Now you know roughly when they bought it, if its reasonably within your warranty, receipt or no receipt, fix the unit and move on.  You will earn that customers business for life, and that is worth a hell of a lot more than that $3 coupler.  Even if its a few months out of the warranty. If the part is in your car, fix the customer's machine.  Its not fair that you sold someone a machine for a few hundred dollars and it only lasted 8 months.  I understand that legally you don't have to do shit, but morally speaking, you should do it.  That customer will be your customer forever, and their kids too. They will also tell all their friends/ neighbors about you.  They will become your best spokesperson for your store.  

You will find that most of your warranty work is going to be a result of misuse, neglect, improper installation, or other issues with the house that would prevent the appliance from working properly.  About 70% of my service calls are tripped breakers, reverse polarity, rotted floors under the front load washer, you get the picture. You have to SHOW the customer the problem, and offer to come back after the problem is solved.  They will never call you back.   About 20% is stuff that I missed at my shop, and the other 10% is legitimate failures.   My usual Defect rate on all of my appliances is about 10%.  Thats 10 in every 100 appliances that I sell.  Lately I have been really slacking, so my defect rate jumped to 20%.  That works out to about 5 calls per week.  It doesn't seem like much, but they never come in that consistent.  Its more like 1 month with no warranty calls, and then the weather gets warm and you have 30 in 1 week. 

 

Replacements:

Inevitable part of business.  Sometimes that Atlantis trans will agispin, the fridge compressor poops out.  Alway replace the unit with a BETTER unit than what you sold them, Even if only by a little.  The customer will be pleasantly surprised, cementing your relationship with them.  Further, replacements become priority.  Making the customer wait 1 week for their replacement washer will only succeed in pissing them off, and this has no benefit to you.  Replace it quickly, apologize, and forget about it. 

Returns.  

If a customer buys a machine cash and carry, and returns it for whatever reason the same day, take it back.   I have an " all sales are final" policy, but sometimes its better to just avoid the conflict.  This applies a bit more for when people put deposits on stuff, or when they buy something and haven't taken possession of it yet.  Just give them their money back.  After they take possession for more than 24 hrs, the warranty applies.  

Asshole customer from hell that keeps breaking every appliance you send them:

You will get one of these people once a year, for sure.  After the second replacement, the only way out for you is to pick up ALL of your merchandise, and give the customer a FULL refund, including delivery.   Im convinced that some people are cursed, and are destined to never have working appliances.  You don't have to be in a relationship with them.  Some people are so ignorant with the use of their units you wonder how they survive in life.  Give them their money back and never do business with them again.  You walk a way the good guy, they can't say anything bad about you because you did the right thing.  

 

In conclusion, Warranty/ replacement/ refunds should not be looked at as terrible.  Look at it as an opportunity to prove to your customer how reputable of a business you are running.  Some of my best customers are the customers that I sold defective appliances to.  When you do the right thing, your customer will see it, and appreciate it.  You can go home and sleep well at night knowing that you haven't screwed anyone over.   There are a lot of hack, hillbilly appliance dealers.  They will always be able to sell an appliance cheaper than you.  When the warranty calls come in , thats when they run away and you get your time to shine. 

 

-Eugene Pallas

Lorain Furniture and Appliance 

 

 

 

 

Lorainfurniture

So you found the perfect space, now is the time to fill it up? But how?  First, and best choice, find the guys who deliver for new appliance stores.  You see them on the side of the road, pull over, give them your phone number.  These guys are the lifeblood of your business.  There is no better resource for appliances than these guys.  Often you will get stuff that just works, where the customer was simply upgrading.  Needless to say you still need to go over them, but you save huge on the parts department.   Sometimes it becomes a nuisance, you are overstocked, cash poor, etc.  You still need to take care of your good trucks, as they will never come back if you screw them once.  

Sometimes you need a bunch of appliances all at once, especially if your sales floor is woefully low.  There are wholesalers out there, but keep in mind that all of that stuff has already been picked over at least 2 times.  Once by the delivery truck, and second by the wholesaler.  Nobody will sell you a gem for $30 when they can plug it in real quick and flip it for $350!

Other options include craigslist, etc, but requires a lot of leg work as you will need to pick all of the items up.  

 

Fixing, testing, cleaning. 

The appliance needs, must, be 100% functional.  You should test by hooking the washers up to water, and washing your dirty shop towels.  Towels not dirty? Go outside and get them dirty.  Typically you don't need to add soap as the machine will be so gunked up that you may have to run it 2x just to get all the residual soap out. You should dry your towels in the dryer.  Dryers should also be vacuumed, lubed, and belt inspected. If the belt has any cracking, replace it.  

Stoves are pretty simple, 4 burners should work fine, oven should be brought up to 350 to check accuracy. Gas units: Oven should ignite in less than 1 minute, if not, change ignitor. 

Refrigerators are the most challenging, there are a lot of things to test/ verify.  Freezer must be 0-10, fridge side needs to be about 38*.  You need to check the defrost cycle, also clogged drain.  Gaskets need to be inspected as well.  Ideally, you would be running the unit for a few days.  Don't forget the ice and water.  After it tests ok, mark your initials and the date you okayed it on the back. 

 

What brings the demise of most appliance shops around my neck of the woods is the quality of product.  They put out shit, then complain about too many warranty calls, then stop honoring their warranty, = The End.   Your appliances need to be working. Period.  Its great when you find the dryer with the bad element, you know why the person got rid of the unit, and therefore, you know that the unit should be 100% after the repair.  It gets tricky when you can't find anything wrong.  Test it twice.  After it checks out, mark your initials and the date you okayed it.  

Another thing worth noting. 

DONT STORE BROKEN APPLIANCES!  I can't tell you who many dealers I visit boast their mountain of scrap (untested) appliances.  Its like "wow, you have 100 broken appliances, you really are going places!" FIX the stuff, clean it, THEN its ok to store.  Instead of storing scrap metal, you now have valuable inventory.  

Its important to sell ALL major appliances.  Stoves, fridge, washer, dryer, dishwasher, microwave, built in appliances, etc.  Don't limit yourself to any specific brand, style, etc.  I know of a outfit that only sells direct drive washers.  I can understand, they are easy to fix, parts are cheap. Go to HH gregg and see if they only sell LG's. 

 

Ideally all of your appliances should be 100% complete.  This applies mostly to refrigerators, as you can't sell a stove with missing burner caps etc.  You can sell a ref if its missing a shelf, or the kick plate.  Ask yourself:  would you put it in your kitchen ?  You can live without the kick plate, but if it only has one shelf its not a very usable unit.  I know this sounds silly, but you should go check out your "competition"  Its ridiculous. 

Clean and Priced:

This is the difference between making it, and just getting by.  Refrigerators should be stripped, and cleaned. Warm soapy water for the shelves, and cleaner with bleach for the liner.  You don't need to strip the doors out, but it should be squeaky clean.  All light bulbs should be working. The fridge should be bright, SMELL CLEAN, and look clean.  Washers should be scrubbed, especially at the lid.  I use a gong brush.  When done, the washer should SMELL CLEAN, be without rust ( spray paint!!!) All of the hoses should be in the tub, ready to ship.  Dryers should be vacuumed, lint filters washed, and should be rust free.  Also, all legs should be attached and somewhat functional.   Stoves need to be grease free, look, I know it sucks cleaning a greasy stove.  I go by this principle: If I am not willing to clean it, I shouldn't buy it.  

When you go to a used car dealership (a successful one), you don't see dirty cars for sale, do you? Your popular restaurant: is your table dirty? You get the picture.  There are people willing to buy dirty appliances at a discount.  Ill leave that decision up to you.  Sure, I have done it before, but I would rather sell a immaculate clean machine for top dollar than sell junk, at junk prices.  

All of your machines should be priced.  No exceptions.  For years, I would just "quote" the customer a price when they walked in.  People always suspect foul play.  How could the customer know if you are charging them more than the last customer? You go to the sporting goods store, and see a nice coat on the rack, no price.  Is is $50? $200? $500?  Chances are, after looking for a price, you don't find it, and you put it back on the rack and don't buy it.  People are shy, and don't want to bother you.  They will go somewhere else where the items are priced.  Price it at the maximum you think you can get.  You can always talk down, its hard to talk up.   Your price tags should have your name, A box for a brief description of the appliance you are selling, and a box for price.  If its missing a kick plate, or door bin, put "missing kick plate".  Be upfront about it.  Better they know about it now then after its installed in their kitchen.  

Delivery:

Delivery is mandatory to success.  It sucks, is expensive, and you typically have to subsidize the delivery.  I charge $20 for curbside drop off, and $50 for full installation.  Full install includes all connections, dryer vents etc. and haul away.   One way to cut costs is to deliver only a few days a week.  Its cost of doing business, get over it.  Your delivery guys should know how to deliver correctly, hook up and install the units professionally, and be courteous to your customer.  The delivery guy is the last face the customer sees that represents your company, it needs to be a happy face.  They should be wearing dickies, work boots, and uniform tee shirt.  Buy shubees, moving pads, dollies.  Just like you need the correct tools for your job, delivery guys need their tools.  If they wind up missing, make them pay for it. 

The customer's unit should be fully installed, in ready to go condition.  What good is a washer if the customer still can't wash? 

 

 

Lorainfurniture

Location, Location, Location

I thought I would expand a bit more on some of the points in my first entry.  This part will focus strictly on location, and set up of your space. 

 

First, Ill tell you where my store is located.  My place is located on a main corridor; you can drive clear through town on my street.  I am about 50 blocks away from downtown, in a poor/working class urban area.  15 years ago when I started, it was a proper ghetto, however, in the last few years my neighborhood has begun to gentrify.   Ideally you want to find something in a similar area.  Don't forget who will be your main customer, people who can't afford to buy new!   Of course, no two cities are alike, and your situation may be completely different.  Use your best judgment.  Its obvious that you don't want to be in the middle of nowhere, regardless of how cheap the rent is.  Cheap rent means nothing if you can't generate sales.  You also want to avoid getting on the hook for a lot of money every month, whether it be rent or mortgage.  

1. Highly populated area

2. prefer on a main corridor with good traffic, but avoid roads that seem like mini highways. Your customer many never see you!

3. Be close to your target group of customers. 

Great! so you found which neighborhood you want to be in, now time to look for the actual space.  Having a 1k sqft space is just not going to cut it.   You have to understand that operating a store incurs a lot of FIXED expenses.  Rent, lights, gas, insurance, licenses, phones, internet, and employees.   All of this stuff is called overhead ( ill discuss this in more detail in another post).  A smaller store may be a bit cheaper to rent/buy, but most, if not all, of the other expenses will be just about the same.  The amount of merchandise you have on the floor will directly affect how many appliances you sell per week.  

You can make a living selling out of a 1k sq ft store, but at that point, you will likely make a better living just doing service work.  ( less stress too!)

My store is around 5,500 sq ft. 2300 of it is actual showroom, about 800 ft occupies my ebay store, another 600 for my testing area,  and about 1500 is storage.  I have a small office, and a few utility closets/ bathrooms.  My store has physical walls dividing it in to those four quadrants, so I can't really change much about it.  In a perfect world I would have 4000 ft of showroom, 500 for testing/ fixing, and 1k for storage.   

The store you are looking for should have 1 LARGE showroom. You can't be walking customers upstairs and around the corner.  You should be able to have several rows of appliances, every 20 appliances there should be a small isle.  

Refrigerator section: 

I have about 20-25 refrigerators on the floor and they are all plugged in and running.  They seem to instill a lot of confidence in the customer when they see it, feel it cold.  That said, you need to have a double outlet every 36" .  You should try and run as many separate circuits as you can.   You also need to have access to water to test ice/water function.  

Stove section:

Needs to be near (arms length ) to fridge section.  Dishwashers are also displayed here, along with otr microwaves,  table top microwaves. 

Washer/ dryer section:

I like to have stack units in one area, and match set washer and dryers in a section by themselves.  The odd stuff/ budget models are in another area.  

 

Generally speaking, you are looking for a store that is well lit, large space, and has/ is a legitimate storefront with large display windows in front.  Wide doors are a must, a 36" front door is doable, but some of these larger units won't fit unless you strip the handles. Ideally commercial double doors, or a 40" door would be great.  A garage door would be a blessing.   Your location should have easy access to parking, it doesn't matter whether street or parking lot.  If a customer can't easily pull over and browse your store, they won't.  Your location should be easy to find, and have the ability to put a fairly decent size sign up.  

 

Once you find your building you should figure out if the building is for sale.  More often than not, a property owner in the ghetto will bend over backwards to sell a property. They will often finance you, with little or no interest.  The nice thing about buying is that eventually the payment will stop. And then you actually own something equitable.  Rent will continue for eternity, and will go up every year based on your level of success. ( you think landlords are stupid?) 

 

 

 

 

 

Lorainfurniture

Intro

1. Location:  Probably one of the most important decisions.  You must think about who buys the most used appliances.  Typically you want to seat yourself in an urban area, ideally in a poorer community.  This has 2 benefits: A: rent, or purchase of space is cheap, B, you are near most of you clientele.  Most of your customers will be lower income, nearing poverty level.  Finding a location that is generally around other retail stores is a bonus.  

In order to make a decent living selling used appliances, you need space.. The more the better.  Your showroom should be minimum 1500 sq ft, and you need another that much for testing/ storage etc..  Ideal case would be around 5000 sq ft, one level.  

2. Merchandise:  Where does one find an ample supply of decent used appliances?  Hopefully you will be in a location where the "trucks" (appliance delivery trucks) will just find you.  Take care of the good ones.  When you see a truck on a street doing a delivery, STOP, give them your card with your cell #.  These guys work late, and its not out of the question to meet them at your place at 8pm to unload some treasures.  Another option is the companies that "wholesale" used appliances.  I personally don't care for it, as you are buying stuff that has already been picked over at least 2 times.    Final, and least effective option is to buy the crap off of craigslist.  You run the risk of buying utter junk, and potentially buying something full of roaches.  

Some of the stuff you get will be beyond repair.  Either missing too many parts, or so damaged that it is unsellable.  You need to part those machines out and list the parts on ebay, or amazon. etc .  The common stuff you should be keeping in inventory.  Further, you don't need 100 direct drive motors, thats just hoarding.  Keep 5, sell the rest. Money fits a lot nicer in your pocket then electric motors.  

DONT STORE BROKEN APPLIANCES!  I can't tell you who many dealers I visit boast their mountain of scrap (untested) appliances.  Its like "wow, you have 100 broken appliances, you really are going places!" FIX the stuff, clean it, THEN its ok to store.  Instead of storing scrap metal, you now have valuable inventory.  

Its important to sell ALL major appliances.  Stoves, fridge, washer, dryer, dishwasher, microwave, built in appliances, etc.  Don't limit yourself to any specific brand, style, etc.  I know of a outfit that only sells direct drive washers.  I can understand, they are easy to fix, parts are cheap.  They would leave the red LG steam washer, which I would in turn buy, clean out the drain pump, and sell for $400. I must admit, GE laundry kind of sucks, but you already know that.  

 

3. Operations: Ok, so you are already a technician ( I hope), How can you sit in a store all day and still get service calls done? If you don't have a spouse, or family member to watch the store while you are out, hire someone.  This is the tricky part, and truth is, the hardest part about being a small business owner.  People are lazy, stupid, and worse, you could hire a thief.  Hiring the right people is difficult. Just remember, the next one is always better than the last one.   

 

You need to manage your time effectively.  When you first open, you aren't making enough money to quit your day job, so you continue to do that.  You have to juggle running a store, keeping your day job, and still finding time to fix appliances. ( and still exist to your family too)  The thing lis this: your store will fail if you don't put enough time in to it.  If you are not willing to work morning until night, 7 days a week, (initially) don't bother.  

Delegating responsibility is paramount.  You can't do it all.  

 

Respond, comment, question. I will make a part 2.