FMC authorized repair

[gbono]

Is it worth becoming an FMC autorized service center? I have talked to some folks here and they complain that FMC doesn't pay enough for the actual cost to repair their products........

[Leo_Gnardo]

Is it worth becoming an FMC autorized service center? I have talked to some folks here and they complain that FMC doesn't pay enough for the actual cost to repair their products........

FMC not the only offender here. We had a local "fix every brand" center near here, a Godsend to me because things I couldn't fix, send the customer over there & bingo it got done. BUT and a BIG BUTT it is, the repair center got paid for warrantee work not with cash but with credit. Credit they could use to buy parts and whatever else they wanted - couldn't afford to keep the lights on & pay the repairmen after a while BUT they had enough credit to buy a truckload of gimcracks and doohickeys, fat lot of good that did 'em. Yamaha was another major offender. The company's brass figure the repair center will do enough non-warrantee biz to keep the doors open, that's the way they expect it to work. But it doesn't in most cases. It must take some miracles plus the patience of a saint to keep a place like Triple-S in NJ open. They seem to keep it going, year after year.

I'm sure Stan will sound off about this, he ran a big repair center in the Bay area and I'm sure he's "seen it all."

Enzo's tales of DNR (do not repair) gear also tell you about the mindset of the manufacturers these days. "Not worth our time to talk about, throw it in the dump, we'd rather ship a new unit than fix our own DISPOSABLE equipment." Above a certain price level, not so disposable, but when you see multichannel tube amps selling $300 or less, cheap big power amps, mix consoles, etc you know what the score is.

[Enzo]

Let's be fair. If you purchased a load of Chinese guitar cords for $1 each, but sold them at $20 each. If a customer returned one as defective, would you REPAIR it and send it back? Or would you just send another? That is what the do not repair list is all about, nothing more. Those entry level amps - and this is most companies, not just Fender - cost SO LITTLE to the company, they don't want to pay me $50 to fix something they can replace for $18.

Fender pays by check each month. Who pays by credit? SOme companies credit your account, but if you get a positive balance, you simply request a check, and they send it. Peavey for example, they credit my account for warranty repairs, but my account also covers my parts, so I can leave the credit there against future or current parts invoices, or I can request a check.

Fender used to pay $50 an hour, is it still that, or have they goosed it a bit? What is your shop rate, and how far off is that? If you are in Manhattan and charge $130 an hour, then sure, Fender doesn't pay enough, but most of us are not in that situation. I charge $60 here, so they were $10 lower than that. But to me, I see more value than just the labor money. Every warranty repair brings a customer into my shop. They went to Fender and were referred to me, so they came to my shop instead of some other shop. Most of those customers had never been here before, many were not even aware of me. What does it cost you to get a new customer? I'd say $10 is cheap. Because those customers will be back with other repairs.

So you want to be a Fender shop? First, are there others in your area already? Fender doesn't flood an area with shops. If they already have one in your area, chances are they won't open you as one too. Then you need to get rated as a tech. Fender has bronze, silver, and gold levels of tech. Bronze covers just the very basics, silver is the general level for most techs, and gold is advanced level. Service centers also have bronze, silver, and gold levels, and those are based on the level of techs at the shop. What it means is that bronze shops are authorized to spend 1/2 hour labor on a repair, silver one hour, and gold two hours. Unless you call for additional authorized time.

Oh yes, tech certifications are separate for electronics, acoustic guitars, and electric guitars. For example my certificate says gold for electronics, and no rating for guitars.

So other than the labor and getting customers, your parts are half list price.

[52 Bill]

We are a Fender dealer, so a lot of what we fix on warantee are things that we have sold. We do get a lot of additional traffic, but sometimes it's questionable as to the value of the new customers that it brings in.

After you have fixed a few of the more common problems like resoldering the power resistors in the tube amps, you get to be pretty good at doing it quickly enough that the reimbursement rate is fair. Most of the warantee issues start to fit a pattern like the bad tube sockets or the bad filter caps, so you should be able to diagnose the problems fairly quickly after a while.

If you have to spend a lot of time working on a real dog, then I guess that you could lose on those repairs.

[Enzo]

Point taken, but gbono sounds more like an individual wanting to get into it independently.


As a dealer, the labor is only part of it. There are intangibles. That your store evven offers warranty repairs is a selling point for your store. Mom and dad buy the kid an amp for his birthday, they might say, lets buy it here because they can fix it under warranty. For that matter, how many times have you had someone ask, do you know how to work on Peaveys? (Or fender or whatever) They don't understand that amps are amps, and working on one brand is little diferent from another, but they see the listing and they know you can.

[gbono]

Thanks Enzo - good stuff. There is a authorized repair shop 20 miles north of me and one 20 miles south. Might be an issue?

Do other companies (Peavey, Marshall, etc) have similar requirements as far as rating techs and getting certified as a service center?

[Enzo]

Fender is the only one I am aware of with the level ratings. Fender also has a tech exam you have to fill out.

It has been a long time since I applied for any, so changes may have occurred. Most of them wwill have you fill out a more or less resume, asking expeience, training, list other companies you service for. Then they will want photos of your shop area, the customer counter area. the exterior. They want to see that you ar not just someone in a basement, and ar operating from a commercial storefront. Most will want you to have been in business at least a year. Most want an equipmet list for your shop, list your scope, meters, loads, speakers, etc.

[The Dude]

It's been a while, but last I knew, they made you buy a bunch of parts inventory, too.

[Mick Bailey]

Out of interest, what's the procedure with 'No Repair' Fender amps still under warranty? If the fault is straightforward does Fender still pay the service centre, or would they ship a brand new amp for the sake of a bad switch?

[km6xz]

My information is 13 years old but things do not change that much year to your. Warranty repair is not profitable unless you have a reasonable volume of the same models, and have a good stock of frequently used parts. But shops, after balancing factors like growth goals, competition, relationship with stores, access to OEM, industry credibility and tech data access, warranty is possibly essential.
When I was warranty repair when still living in the US, Fender was a moderately low volume for us, about 1 warranty unit a day. But they were a snap to work on, had good schematics, and we had the parts so the Gold level authorization meant we could charge up to 2 hours labor without permission. We never needed additional time, never asked for it and in fact most were done in the 1 hour. I rated them as pretty good to be authorized for since they brought first time customers, often young people who never had warranty repairs done on anything before so w got them as long term customers. That is worth more than spending a good deal on advertising each month.
A requirement for becoming authorized was buying an initial stock of commonly used parts. I think it was around $2000 for the Gold level and we used almost all of it the first year and was worth it just for the OEM pots and reverb pans including in the kit. Smaller kits were offered for Bronze and Silver applicants.
Having factory service info and correct part numbers, and an open parts account was by far the most important reason to be authorized. There was not free access as now to schematics, nor was there a small cottage industry of substitute OEM parts for amps at the time so having access to model specific parts makes the difference between a pro shop and not.
Established shops did not like it when too many shops were authorized in an area so manufacturers only opened up new shops if there were a lot of complaints by customers and stores, or turn around times became excessive or stores requested it. Getting volume store to request that they add your shop will overcome the resistance to opening another shop in an area that already has it. I had two stores(one with a lot of locations in the area) simultaneously request me added right when I opened my big shop so got authorized by about 25 main brands in the first month and 55 in the first year. We had the gear(easily more than pro audio shop in the world according to a few companies),the techs known to the companies, and a large modern facility so we got a lot of referrals from the companies. I was often asked if they should authorize a new applicant in the region since they did not want to piss us off. If they were brands we did not get a lot of work for so had less invested in OEM parts I did not care but I did care about competitors of higher volume or more prestigious brands and said "no". Only one company turned us down, Yamaha but we already had all the excellent service manuals for them and an access to OEM parts so did not care. When we ended up with all most of the Yamaha keyboard, mixer and amp market, their shop in the area went out of business and they begged us to apply again. I refused. We wanted their customers but not the company.
For a small efficient shop that sees a limited number of different classes of product so diagnosis of the specialized-in products are done more effectively and more specific parts are in hand, or a large high volume shop where a lot of the same models are seen, it makes a lot of sense and is profitable to do warranty. My shop rate was low so many of the reinbursement rates were fine with me. Fenders for $50 labor was profitable. Peavey at $18/hour was not but we did them at a loss to support the stores and to have access to the parts. Alesis and Behringer were very profitable because they were very high volume(Behringer only had one shop on either side of the Mississippi River at the time so we were getting 10-30 units a day and Alesis paid more than our shop rate on the 5,000 ADATs we repaired the first year so eventually they closed their large factory internal shop and sent all their factory repairs to us on pallets every day). Roland, Korg and Kurzweil were pretty high volume because very few shops could handle keyboards well. Some like Studer, Drawmer, Sontec and a number of boutique outboard brands were not volume enough to be profitable but were good PR. At the time there were a lot of 24-32 channel console volume and we were warranty for all of them but Behringer, Soundcraft, Mackie, Alesis, SoundTracs, and A&H was the bulk of them and they seldom were profitable unless they had channel strips instead of the Mackie style of one large board since disassembly and reassembly took a lot of time, and then post repair full tests too additional time. So don't become dependent on too labor intensive models unless you can be assured of enough volume to make your shop really efficient at getting them out the door quickly.
Nowadays the cheap stuff gets replaced but soon everything with be replacement because the number of competent shops that can do warranty repair at a profit is shrinking in some product categories. Every shop seems to focus on the very easiest, tube guitar amps, so every town has a few shops that can only do tube amps or older solid state. But few have anyone qualified for keyboards or any digital electronics. With an industry average of less than 5% warranty repair rates, any product selling for less than $150 probably is not worth repairing at all by manufacturers and in 5 years, that will probably be any unit selling for less than $500 will get replaced.
A depot maintenance style shop like we were for Behringer and Alesis could be set up to do contract refurbing for specific models for manufacturers and make a profit. Say, $25 per $150 throw away guitar amp or effects processor so there ARE opportunities in repair for those wanting to create such as service. There is very little future in general all brand MI and pro audio repair, except as subsistence level one person shops. You can see how inefficient they are now, many shop owners say they have to charge over $100/hour for repairs. Some much higher. They are purposely limiting their market and by charging far more than the service, if done as efficiently as most services, should be. That is killing the demand for repairs and their own future. I say, if you want to be more than just one guy working out of a garage or barn, a shop owner needs to think about efficiency and why they have to charge so much for what is really a pretty simple process. Would they be happy about paying $12 for a cup of coffee or $8 for a loaf of bread? Both require more investment in equipment, facilities and staff than a repair shop, yet make a profit. But a business that has very low overhead, almost no capital investment, can't make a profit for less than $100/hr? You have to be kidding me.....That is an industry that is trying to commit suicide.

[g1]

Out of interest, what's the procedure with 'No Repair' Fender amps still under warranty? If the fault is straightforward does Fender still pay the service centre, or would they ship a brand new amp for the sake of a bad switch?

No means NO! They will ship a new unit for a loose fuse clip . The dealer or service center disposes of the original unit as they see fit, but they are not to be re-sold.

[J M Fahey]

With an industry average of less than 5% warranty repair rates, any product selling for less than $150 probably is not worth repairing at all by manufacturers

That's the point, and to put it into what numbers really mean:
5% failure rate within a year (easy to achieve unless you are overtaxing parts or a very "cheap" designer) means 1 in 20 , say, amps will fail.

Simply sending another instead of keeping a Service Network, staff for accounting, shipping, etc. plus actually paying for the servicing itself means that for every 20 amps that you intend to sell, you will need to actually manufacture (or buy from an OEM maker) 21 .

Which to boot at list price cost means extra $150 , but probably has a real cost (OEM + shipping from China) half that.

So for a sales volume of 20*150$ = 3000$ factory has to spend $75 (which are already included in the bulk order cost) to be able to offer "full 1 year warranty" which is a good sales argument.

Notice that I didn't care to analyze what kind of failure knocks said amp down; slightly loose fuse holder or power transformer nuked is the same, all that matters is that "1 in 20 fails within a year".

So that apparently crazy system works very well for the Company.

[Enzo]

The days of $18 at Peavey were long ago, They pay average rates these days.

I don't recall having to order a parts kit from fender, but it was along time ago. I did have to buy $400 of parts from QSC.

Yamaha made too many demands, so I got a parts account and left it at that.

Roland wanted to require I go to California for a week for training seminars. Not remotely worth it for the occasional keyboard repair.

Kustom? In however many years the listing was valid, I never saw a single repair nor any referrals from Kustom.

Kawai? I think one or two came in from area schools.

Samson/Hartke? A small but steady volume for me. Payment was a reasonable rate, but took forever to see a check.

Loud? You know, I am pretty tired of fixing powered Mackie speakers, they suck. Don't mind Crate repair.

[g1]

5% failure rate within a year (easy to achieve unless you are overtaxing parts or a very "cheap" designer) means 1 in 20 , say, amps will fail.

And I think they do even better, plus a certain amount of defects don't get returned. So it's only actual claims they have to deal with. I believe one of the major mfgr once said around 2% claims.
Now from this number, only some of the models are on the "do not repair" list, so the actual percentage of replacements becomes quite small. With the cheap cost of the products (usually the offshore lines), plus cheap corporate bulk shipping rates, it ends up working out in their favour.

[km6xz]

5% was returns at the worst, some like Roland were less than 2%, Alesis in the ADAT era was 75% needed shop work at some time in the warranty period, often just for cleaning the head or installing one of the dozens of factory hardware mods required.
A warranty system is expensive. Printing costs, manual writing,publishing to disk or printed requires a staff. The stocking of individual parts, shipping and receiving parts that make no profit, warehouse space, office staff for the parts department. Techs and phone consulting techs, a service manager, and a whole level of middle managers for departments, processing warranty payments to shops, resolving problems created by shops, training programs. Customer service complaints and resolving them. All this and much more is paid for out of sales and sales departments never look kindly on repair, they would rather not know about it.
If a dealer can resolve the issue by just handing the customer a new unit every single person in the transaction from customer to shareholders are better off.
The one real weakness is the high volume of units returned because of pilot error or because so few shops have models sold on-line that there is a common fact of on-line sales is for a large number, millions, of customers who see or touch that model for the first time when UPS delivers it. As we know, feel in the hand, or ease of use are not something that we can ignore in evaluating future purchase. The result is a high percentage of units bought are returned for no reason other than the customer wanted to try it or hold it and THEN decide f they wanted it. They might buy 4 units of competing brands and keep the one that suits them most. That is a fact of life in on-line sales. In some fields like cameras, 20-30% of perfectly good units are returned but can't be sold as new.The go to repacking as new and sold as Refurb. If a model is more complex the number of returns is higher. If an important gig is coming up and the band wants a backup unit, the odds are high that they are going to buy instead of rent, and return it after the gig, since it is cheaper.
Digital gear, guitars, effects etc are very commonly test driven and returned for full refund if they find another they like better. Back in the old days when there were stores in every town, that did not happen because people could try it or learn from a knowledgeable shop owner but those mom and pop stores are disappearing all over, and being replaced by on-line sales. Simply having a no questions asked return policy makes or breaks a store and means a big advantage in sales for the stores that offer it.
So actually defects are low now, but returns are higher than ever. That is one way to get rid of returns that are in perfect condition, exchange broken units.