Justa word on this.

Our labour rates do not cover the upkeep of our stores department.

We have customers who run large fleets who need us (and is one of the reasons why we have the contract in the first place) to keep parts in stock but don't want to pay an increase in labour rates. But for us to keep the amount of parts in stock that we need, we need another unit, then it needs racking out and parts bins, then the administrative costs of logging these parts in and out and onto jobcards as they are used, and logging surcharged units to go back to the dealers (goods returns notes) and returning parts that are not required. Then of course there is staff required to do all this.

The customers agree a discount on the parts on a contractual level. Usually along the lines of retail less 10% or cost plus 30% or similar.

We then need the parts invoice processing for payment which is done by a girl in the office.

So that little 30% that is added to parts goes towards the cost of a full time bloke in the stores, the administration costs of having to input the parts into the stores, onto job cards and the payment of the invoice, the racking and bins, the rent and rates of the unit the stores is in and all the equipment like phone, fax and PC.

It's a bit different from having someone turn up with a truck and dumping it in the customers garden.

I know this is probably a little more complex that Christian's operation but he is still having to pay rates on a section of the unit to hold parts in stock etc. Whilst the stock is in the unit, that part of the unit isn't making any money (he can't park a car there and work on it) so he will still have to put a percentage cost on parts to cover the costs of keeping them in stock in the first place.

Hope that helps.