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Taking in work from local shops
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Taking in work from local shops
I was recently contacted by a popular independent guitar in my town asking if I’d be interested in taking in some repair work from them. They do their own basic set-ups and electronics work in-house, but the owner is looking for someone to pass along the structural repairs, body work, restorations etc. that pass through his store. I’m not super-enthusiastic about the store taking a cut of the repair cost, but the increase in work volume would be welcome, as would the reputational bump I’d get working with a good store.
I know this has been discussed before (mostly horror stories on the Loothalong), but I was wondering what different systems/processes/agreements people have experienced when doing this kind of sub-contract work, and what kind of arrangement are generally beneficial e.g. does the store usually set the service price? What kind of percentage/cut do stores normally take? Do stores normally do the intake and evaluation?
I appreciate any help – this particular shop owner has never done this before either, so he’s open to suggestions.
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8 Replies
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Matt, I’ve worked through most iterations of these arrangements: Drop-off and pickup, straight up referrals, taking work originating from their store for a percentage, (avoiding) an “independent contractor” arrangement, and several versions of renting a spot in their basement.
In the rental arrangement concept they wouldn’t agree to all potential repairs going through me first and I would allow them to do repairs based on a scale and I even offered training of interested staff for a fee which would give me an exit strategy as I saw it as a short term option.
It was a pretty bold idea, but the percentage they were asking from repairs originating from their shop, and my need to pay my bills, looked good on paper under this arrangement -but the owner wanted to dole the repairs out as they saw fit. Fair enough.
I have a great relationship with this shop, I would describe it as ideal, since I’ve known these people for years and years and the manager and owner were open to discussing and trying these arrangements. Bottom line, I never found an an answer that didn’t require some token of exchange or one that would prevent them from taking the job outright for cheaper, or scale in a way I had enough control over to budget appropriately.
I tried baking their percentage into my pricing, which meant I was charging their customers more on a scale than if they had come to me directly. I supplied a handful of my own repair tags and had some of my customers drop off work to them and I would pay them a flat rate for each completed repair.
They want to see everything first. If they can (or think they can) do the job there cheaper, they will. I watched them struggle replacing a banjo tailpiece for two weeks. They created a pricing sheet for things like Nuts and Saddles for the cost of the part. They are the competition. Even without a proper repair department or anyone with experience or training. If anything, during my time there, they took on more band-aid repairs than they did before. I get it.
As an LLC, I think you have more options to set up a Vendor relationship that will work better in terms of income and taxes, etc., but then at best they’ll want a processing fee of some kind if they are taking payments on your behalf or a “wholesale” arrangement.
Best arrangement I came up with was drop off and pickup of my own customers where I do all the footwork and billing and they slap a tag with the customers name on it and hands them a claim tag. I pickup, and when I drop it off, they get ten bucks.
I had to be very clear with them that this is not their repair (even though it is IN their shop) but that ground is shaky since I can’t seem to get them to stop consistently pawing every instrument that comes in. Again, I get it. Best option is referrals in my experience and to push hard to get your name out there and advertise – posters, local “Shopper” publications, Craigslist – do it all if that works for you. Hand them a stack of business cards and be friendly. Buy stuff from them – they’ve helped me with some kickbacks. Nothing has beat referrals and good clean work. Good luck! You got this.
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Hi Matt,
I have some pretty strong opinions about this but each person has to decide what makes best sense based on their own situation. From my point of view in the long run its much better to approach a shop, introduce yourself, present your shop as an option for them to refer to if they find themselves with work they don’t want or can’t handle. From that approach I’ve gotten many referrals with no formal agreement at all. The best shops and music stores know the importance of having solid referral options. Those that are looking to make money on that deal are the ones I usually avoid. Its about building relationships. Good luck!
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I do work like that with a couple of music stores here in Juárez and El Paso. Also a local tech, I do all his refrets. In my experience it is very simple, since it’s just referral work, a handshake and good will works the best. I do not sell guitars, so whenever a customer needs a new guitar instead of a repair I send the over those two music stores.
Hope that helps.-
I agree with your approach. Goodwill and parnership is what its about. Engaging in a tangled business relationship always souunds like indentured servitude to me. And it is never clear what will happen when the looth eventually leaves the shop. The only scenario that I would consider is one in which all parties agree in writing that the looth can hand out his own business cards in the store and take the customers with him to his own shop for subsequent work, rather than through the store, and that the looth can leave at any time he wants with no repercussions.
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I contract with a local store (6 miles away). They send me the more complicated repairs and take 10% which seems fair to me. The biggest challenge I have is at the intake stage. I’m asked to evaluate and give an estimate on everything I pick up. I pickup and bring instruments to my shop for evaluation. Sometimes, the customer decides to not go through with the repair after my estimate. I don’t charge a bench fee, so pickup, evaluation, and return of instrument to the store is all on my time. I’ve been thinking about charging an evaluation fee. Anyone else charge a bench fee?
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You certainly wouldn’t be out of line for asking for compensation for your time. I know from personal experience that some estimates involve some pretty thorough poking and prodding before you even know what kind of repair might be needed. I wouldn’t expect a mechanic to get under my car or under the hood to evaluate an issue for free.
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Hi Matt. Since you already have your own shop, and especially since it sounds like they sought you out, I say it’s worth it to at least do a couple repairs as a trial basis. Set rates for setups, nut replacement, etc should be arranged before taking in any of their business, but if you are doing more thorough repairs, I would suggest an hourly rate. Some major structural repairs can be pretty time consuming.
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I realise this is an older thread but thought I’d just add a few thoughts from my experience working with a local shop in case it was helpful to anyone considering cutting a deal with a local store.
I run an independent home-based shop. Early in my business’ life, a local music store contacted me and asked if I was interested in an arrangement where I handled their repair work.
My original deal with the store was just a handshake, and was that I’d visit the store weekly, pick up instruments and drop off repaired instruments. I would bill the shop for the repair and they would charge the customer. In theory this made my relationship with the store that of an independent contractor and they would tell everyone who it was who they were sending the repairs to, which helped get word out about my shop.
At first the relationship was very good – they sent me 100% of their repair volume, even tiny stuff like restrings. They would pay me for all the repairs I’d completed in a lump sum once a month, and were never late paying. They’d charge customers a straight percentage markup on whatever my bill for the job was, and supply parts in most cases.
It didn’t take too long before they started to try and do the ‘easy’ jobs themselves – first restrings, then setups and finally pickup swaps and electronics repairs. As the volume of ‘easy’ jobs dropped it became less worthwhile for me to take the time to drive to the shop and pick up work vs just staying in my shop and letting things come to me. Eventually I was only visiting the music store monthly or when there was at a reasonable number of instruments piled up. As these were big / difficult jobs, they usually required an evaluation/estimate and not all customers would proceed, so in generally they were a little less profitable.
Things ended in a hurry – after an angry phone call from some guy about a guitar I’d never seen, I realised that any time a customer was unhappy with an in-house repair, the store would just blame it on me! After ending the relationship it was very difficult to get them to pay me for the outstanding final month of repairs, although they eventually coughed up.
If I was to enter an arrangement with a shop again I would insist on these minimum conditions:
1. I take 100% of the repair volume.
2. The shop pays a bench fee or deposit for each instrument prior to me picking it up, and the balance of the bill prior to me dropping it back to the store.
3. I handle either all communication with the customer, and they know their instrument is being repaired in my shop OR I handle none of the communication with the customer and operate as a ‘ghost repairer’ whose existence is completely concealed from the customer.
These three points would solve all of the downsides of the business relationship from my perspective.
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