Retail Observer

RETAILOBSERVER.COM MAY 2022 56 T he warranty service seminar at the recent BrandSource Summit event in Las Vegas kicked off with "The Professor" (AVB service consultant Paul MacDonald) who candidly shared his thoughts on the merits of warranty service. Paul's key point: There are many pros and cons that members need to consider before deciding just how much, if any, warranty service they are willing to perform for manufacturers. THE PROS: • Steady stream of service work • Fills gaps in your schedule during slow periods • Access to manufacturer training classes • Manufacturer-provided technical support THE CONS: • Low pay compared to C.O.D. (collect on delivery) work • No pay if the call isn't processed correctly • No profit on installed parts • Often requires multiple trips to complete the repair Paul gave the members a lot to think about, right off the bat. And then he threw them another curve, when he suggested that the ratio of C.O.D. to warranty service calls should be no less than 70 percent C.O.D. to 30 percent warranty. Any more than 30 percent warranty, and you're very likely to see both revenues and profits decline, he advised. Having previously owned an appliance sales and service company, I believe Paul knocked the ball out of the park with everything he said. No dealer can ultimately run a profitable service department if most of the calls they do are warranty calls at the less-than-break-even rates many manufacturers are willing to pay! As Paul and I have both repeatedly said over the past year or two, your service department should be a profit center and not a cost of doing business. Fortunately, there's a ray of sunshine in the cloudy skies of warranty service, and that is AVB partner JustPressOne. Founder Janice Salmon spoke to the service session audience about the advantages of allowing her company to process all warranty and extended warranty calls for members. She explained that they are experts at the process, and that for a discounted fee for BrandSource members, they will cut through the red tape and handle any headaches for servicing dealers. Specifically, JustPressOne will ensure that claims are submitted correctly to assure faster payment, and they will intercede on a dealer's behalf if there's a payment issue with the manufacturer or warranty provider. But even with JustPressOne on their side, independent dealers still need to consider a range of issues before deciding to perform warranty service: • Who should my company provide warranty service for? • What brands should my company offer warranty service on? • Which products should we offer warranty service on? • If my company doesn't do the warranty service on the products we sell, who will? • What percentage of my calls should be warranty service calls? • Who's going to handle the processing and administration of my warranty service calls? As you can see, there are lots of factors to consider before determining your company's warranty service strategy. Think long and hard on it, because it will have a huge impact on the profitability – or lack thereof – of your service department. Want more information? You can email Paul MacDonald at info@pmdgroup.ca, or contact JustPressOne by calling 877-311- 6602. And you can always reach out to me at the email address below. Rich Lindblom Service Trends Longtime BrandSource member Rich Lindblom sold his business after more than 40 years as an independent dealer. He now shares his retail experience in a popular best- practices column and as the POS point man for BrandSource parent AVB. Contact Rich at egvrich@gmail.com. RO WARRANTY SERVICE IS A TWO-EDGED SWORD– DON'T CUT YOURSELF! BrandSource Summit session weighs the pros and cons of warranty work

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