If an insurer was revisiting pricing, what would you suggest? What would represent fair pricing for a shop 'not under contract' [and not receiving referrals]?


Perhaps starting with something of this sort?

____% off NAGS list or,

_____% mark up of documented shop cost

Prevailing local labor based on NAGS hours shown.

Pass thru of documented fuel surcharges.

Kits at_________

The original benchmark pricing would be fine with adjustments made in an open meeting with the IGA representing us.

Why do you ask? Is there a new devlopement or has someone finally listened to the choir?

Hal-You do have GUTS to ask a question like that, what is your motive? Is this a setup for us to discuss pricing?

NAGS is irrelevent. They have no association to our cost of goods.

Would it really matter if a shop was not under contract or not receiving referrals? You still have to get past the insured's being "directed" in one direction.

I am always looking for a better way-however,
-I think the NAGS inventory numbering system does have merit to identify glass. Agree?
-I suspect the NAGS labor time is realistic. Agree?
-We are able factor local body shop labor rates.
-Seems like any documented seasonal gas surcharge should be a pass thru item w/o markup. Agree?
-PROBLEM AREA--I have no clue about your acquisition costs and the reality of the NAGS list. I think you know where you can get the best prices for quality glass. For non-NAGS items we permit a 25% mark up thinking that was realistic. You lead me to believe that the NAGS list doesn't allow you room for a markup? Are all NAGS prices wrong in this regard, or just some? If some, how WOULD we identify or recognize those items?

I agree HAL you do have GUTS to ask, and I also wonder what the motive is. I can only speak for our shop in our area. We would be happy to submit at NAGS list on most parts, with NET or "P" parts being the only exception. Labor could be either way, per NAGS hours (accurately estimated) or flat at 115-130 per glass part, Kits are fair anywhere between 13.50 or 27.00 and 15.00 or 30.00 per w/s, with HM Non-Conductive being the exception. I'm not at this point qualified to anwser the fuel surcharge question, that would require some research on my part as to how the rates are arrived at. I have the DOE website bookmarked and I know you can use it to evaluate changing markets and prices. Again I compliment you for asking, even if your motive is just for information, it shows you're interested in our worsening situation. If you could get others in your industry to care about the plight of independents that would be a great step forward.

List price for all parts excluding net and dealer

65 hour for labor

20 for kit

33% off glass

$65 dollars per hour (That is what body shops get)

? On documented shop costs

Mirror the current fuel surcharges out there

$22 per kit used ( excluding non conductive)

I'm sorry, but did you state 33% off. That's greater than the current discount of any insurance companies we do work for, and with most jobs coming in under 3 hours, average is probably about 2.5, the current labor for most is either 100/115/120 flat, or 40 flat & 35 per hour. I think I like our current offer better than that scenario. Remember before you jump, I'm speaking of our shop only, the companies we do work for, and our territory pricing.

But the problem is that the our suppliers don't reconize NAGS. If they did then these prices are reasonable.

We will see more and more net cost prices in the future. Every new part out there is going to be a netted piece of glass. Hal, on some netted parts we turn away the job because there is no profit and now they increased another 3.5% plus a fuel charge.

Hal, what's your thoughts on addressing this?

Hal, just yesterday we were offered 10% over our cost on a glasspart, that would be $18.00 profit on glass. When was the last time you purchased ANYTHING from ANYWHERE that you think may have had only a 10% markup from the seller's cost? By the way this was not from your agency, if you work for who I think you do. I don't think you even have agencies in our area, at least not that I've noticed.

VERY SORRY I MENT 13% off "A" MARKET. The competition many be heavier but in my opinion the costs are higher in big markets too.


But after reading other posts I have to agree that NAGS is obsolete! There are way too many netted parts and the list is getting bigger

Hal, I believe, is with State Auto, if I'm not mistaken. Correct me if I'm wrong Hal.

Referencing original post from Hal.
____% over documented shop cost

When you go to purchase a new refridgerator at Sears do you get to know what they paid for it, then negotiate a price from there? Why should we have to "document" our cost, as long as they are reasonable. Insurance companies know within a certain range what the glassparts cost. And we all know most shops are paying the same for parts these day, the days of "Contract" prices based on your purchase volume are long gone.

hal,

thanks for at least opening a discussion.

you mentioned quality parts, currently nags list would represent aftermarket glass, not oem.

as you know aftermarket glass has not been crash tested or certified in any appropriate way to prove aftermarket glass is equal to oem glass.

if you are truly interested in looking at glass pricing i would maybe start by looking at the current rates in Minnesota.

kit prices for urethane should be based on one hour urethane, by the time primers are figured in, break even on a kit is about 30.00.

25% markup is not enough to keep anyone in business or provide service of any kind. 2% profit for a bank is considered outstanding, with the amount of dollars they move the local bank here had a profit over 1.2 million dollars. i would assume the insurance industry profit margin operates similar to the bank type model. glass shops cannot operate on margins that are this small.

Gimme that soapbox back......


One at a time Hal:


"-I think the NAGS inventory numbering system does have merit to identify glass. Agree?"

Agree, SO LONG AS you concede that NAGS has NO relevance to OEM parts, AND that I can purchase six different mfg of glass under the same NAGS number and have six different prices, so how can you use the NAGS part when it bears no relevance to the price?


"-I suspect the NAGS labor time is realistic. Agree?"

DISagree. Many times we are able to bill below NAGS hourly figures, others no way are they accurate in that they are way too low. THey're 'funny time' just like the benchmark lists are 'funny prices'.


"-We are able factor local body shop labor rates."

We've touched on this before, the collision industry labor rates are so supressed, they are second only to the glass industry. Read the paper Fred Jennings, the ECONOMIST, just wrote for labor rates for collision in New York state, then tell me insurers labor rates are acceptable.



"-Seems like any documented seasonal gas surcharge should be a pass thru item w/o markup. Agree?"

DISagree. Every business has a right to mark up ALL of it's costs to cost PLUS. There is NO such thing as a "pass through" cost, ask any accountant.


"-PROBLEM AREA--I have no clue about your acquisition costs and the reality of the NAGS list. I think you know where you can get the best prices for quality glass. For non-NAGS items we permit a 25% mark up thinking that was realistic. You lead me to believe that the NAGS list doesn't allow you room for a markup? Are all NAGS prices wrong in this regard, or just some? If some, how WOULD we identify or recognize those items?"

This is a biggie. Problem area, you got that right!

First, what biz is it of your company to know our acquisition costs? Are you going to tell us yours when we come to buy insurance? IF so, recall, your company needed something like a 240% gross markup on cost of goods sold to net an 11% profit last year, as I recall. Why do you expect us to accept a paltry 25%? And what's with "WE PERMIT"??? Are you hiring us to repair cars, YES or NO?

Second, are NAGS prices wrong? Gee Hal, there are THOUSANDS of net priced parts, no relevance to OEM parts, no premium domestic parts, what do you need to realize this database is broken? Or do you WANT to see it?

Finally, How would you identify or recognize? Hal, this one is just too easy. THe shop's bill is PROOF OF LOSS. It represents what the insured has incurred for LOSS under the policy. Just READ IT, and stop trying to MEDDLE with it. If you feel, that in ANY way, the shop has sent in an inflated bill, go after that shop for insurance fraud. For heaven's sake, Hal, the TAXPAYER pays for those Insurance Fraud Divisions in each state, you guys don't! Take the bill at face value, pay to indemnify your insured, investigate fraud where needed, and get out of my business, and I'll stay out of yours. Deal?

Hal, I'm glad you take the time to post and try to communicate with us, but as long as the insurance industry keeps trying to pull the wool over these people's eyes, expect to have to put up with me.

The soapbox is now, again available.

I stand and APPLAUD Mark1's answers! Hal, Thank you for asking, and I believe from talking to you one on one, that you truely are trying to be in tune with this industry. Again thank you! But as I have stated before, nags should ONLY be a # system, labor hours they have are long on some and short on others ,,, but close. And again I will say we should be able to make a mark-up on ALL aspects, from glass to mldgs, kits, primers, blades and all things nessasary for proper glass installation. I also believe we should not be in the same realm as body shops,,WHY?,,, because body work is much more time consuming. average body shop time might be in the 15 -30 labor hours, average auto glass is probably 2.2 hrs. If we had a reasonable mark-up on ALL materials and then added PROPER labor I think most shops would be happy. By the way we love doing work for State Auto insureds because in rural mn,Hal what you pay allows us to still make a profit. I would also like to see one more BIG change,,,, ANY shop not wanting to be on any network should have the right to #1. NOT be on it.(duh) #2. have a direct means for billing and not be getting paid from another entity. If there was legislation that would allow us unrestricted trade with our customers and the ins ind,, tpa's would have to make it worth while for us to join them, and they would have to treat us like customers to gain our alliance, there would be a value for being on the networks, gee it sound like free enterprise where you earn your valued customers! once again if we HAVE to use nags, and many DO NOT, we should use it in it's entirety or completely. FULL LIST ON ALL PARTS and components, which includes rust repair, mobile service ect ect ect and PROPER labor that allows us to pay for our PEOPLE AND OUR BLDG.
LASTLY AGAIN MARK1 I APPLAUD YOU! STANDING OVATION!

HAL - "I think you know where you can get the best prices for quality glass."

I bet everyone here can guess who it comes from. SGC has for years tried to tell insurance companies that they are "overpaying for auto glass" when SGC's glass is "like quality for a lot less money". Let me reassure you HAL, from a guy that installs glass on a daily basis, SGC glass is NOT "LIKE QUALITY" by any means. It is not the worst out there, but it is not the same. Glass fit DOES make a difference on every level. From ease of installation, to undue stresses on the glass, to increased warranty work.

Back to NAGS and the numbering system. Why is it, as Mark1 mentioned, we use several different manufactures yet we have the same part number, NAGS? When you buy brake pads do all the manufacturers use the same part number, I mean they are all JUST brake pads, and of course they are the same "quality" correct?

I think the time is now for each manufacturer to develop their own part numbers with the DOT included in that number as another poster mentioned, great idea by the way. This might even help insure you HAL, that glass shops are in fact installing good quality parts as each DOT number is registered (although PPG might not like this one), and we can even provide you with a list HAL. And with today's computers this should be fairly easy accomplish. It would simply require the importation of a few new parts databases into the sytem. Most of us already have NAGS parts, Precision parts, and Dealer part number databases in our software as it is. And most software already allows importing of other parts databases.

And lastly.... I know I know I am trying to stop...

Why is it after years of developing OUR brand name, developing good service, quality reliable employees that customers can trust, why is that the insurance industry expects any of us to sell our Lexus parts and service for Yugo prices.

BRANDING is what business is all about HAL. It is why one company can charge more for their jeans than another, it is why Cheerios cost more than Toasty Oats, and why one glass company SHOULD be able to charge more than another. The customer/policyholder is not JUST BUYING GLASS, they are buying our PRODUCT (glass, service, training, and piece of mind.) Yet the insurance companies still expect me to sell my quality products and services for the same price as someone slapping in glass in the middle of a snow storm out of the back of his rusty old pickup truck.

As Mark1 mentioned, get out of OUR business, let the consumer and the market decide pricing, and if you think fraud is being committed, PROSECUTE it to the fullest extent with the support of all of us running honest legitimate auto glass companies.

Hal,

Thanks for having the guts to ask such a question.
Is NAGS broke? Look at a DW1613
PPG list 2665.13
Dealer list 543.50
NAGS list 253.55

I shouldn't say this but......... My cost from PPG $346.47. What pricing system should I use? Discount off PPG? Dealer list or Nags with a mark up or down. I should be able to mark up to make a profit. The insurance industry makes me use NAGS. I turn away the job or loose money on the part. I agree with other posters here, why do you require us to use NAGS, but only part of it? As far as not under contract or receiving referals............. I thought the policy holder had a choice! If they call your 800# and get your TPA, then tell them they want my shop, when does that become a referral?

Applause, applause, applause STANDING OVATION for:
Mark1
xxx

Golly, people, thanks!

I can't find a smiley for this so....

(blush blush)

Now, to Hal, nothing personal here Hal, this is business. I'm simply drawing a line in the sand and saying "It stops HERE. NO further. It's gone TOO far already."

HAL,
I DON'T WANT TO BE RUDE BUT I HAVE SEEN MY BUSINESS DROP BY OVER 60% IN VOLUME AND OUR PRICING HAS DROPPED BY AT LEAST THAT .
OUR COST HAVE GONE UP OVER 100% IN IN THE LAST 7 YEARS WITH MOST OF THAT RISE IN THE LAST 2 1/2.
I THINK BY ASKING A QUESTION LIKE YOU DID WAS N'T HELPING BUT MORE LIKE POURING GAS ON A FIRE.
I USED TO SUPPORT NGA, IGA, AND MY STATE CHAPTER AND I FEEL AS THOSE ORGANIZATIONS TURNED THERE BACK ON ITS OWN BY ALLOWING NETWORK AND INSURANCE COMPANIES TO GET A FOOT HOLD IN OUR INDUSTRY.
I THINK ITS TO LATE FOR MANY OF US AND I THINK THE INSURANCE INDUSTRY WILL FALL AS WELL SO ENJOY THE RIDE. WHEN YOU PUT YOUR CUSTOMERS OUT OF BUSINESS THEY CAN NO LONGER PAY THE BILL.
I'M AFRADE ITS TO LATE.

I really wish people would not post what they pay for glass. It's nobodies business but your own and should be protected as such.

I don't like posting prices, but in this case how else do you get your point across? Prices on products our no one elses biz. Profits are our biz also! I am trying to get across the NAGS system doesn't work is all.................

St. Farm/Lynx/PPG are one entity basically, they all know what we pay for glass in a given geographic location.

Funny you say that glassgod, see my thread NET PRICED ITEMS where a LYNX rep told me to demand a better price on a part even knowing we bought it from PPG.

We all know LYNX/PPG know our pricing for their parts at least, but it amazes me how LYNX will try to tell you they know NOTHING of the sort.

Mabey it's a language barrier across one of those 'chinese walls'.

The actual csr you talk to knows nothing of pricing, I kinda meant the persons that control everything.

Certainly generating some good dialog-

HAWK-
My motive is simple. I run the glass program for a regional insurance company. I want to get my Insureds a competitive price for quality goods and services. I would like to try to work with everyone.
I want to satisfy myself that I am paying a fair price. The majority of the glass universe accepts our pricing--but a small [and vocal] minority do not.
I want to satisfy myself that I understand the issues.
Markets do evolve, and business must evolve as well.
You compete with Safelite and others, I compete with State Farm and Progressive.

Sb-
If your suppliers don't recognize NAGS, or you cannot buy at a wholesale NAGS price, we allow a 25% mark up. I simply ask for proof of purchase so I don't look stupid spending. I prefer to have variances documented, that's all.

Glass Lady-
I work for State Auto, a mid-West/Southern States regional company.

ralph-
The issue of OE and OEE can generate a lot of debate, since many companies that manufacture OE [Original Equipment] glass for a specific car also manufacture OEE [Original Equipment Equivilant] glass for other cars.

I am not sure your comments about aftermarket glass are accurate. How do you know they are not in compliance with FMVSS 205 - 212?

Sure, it would be nice if there was an indep certifier such as CAPA for auto crash parts.

Mark1-
Always good to hear from you. I need some way to audit claims to satisfy myself that what I am paying for glass replacement is fair. If there is something other than NAGS, kindly point it out. I was trying to justify getting glass labor up to what we pay body shops.

Sorry, but I cannot accept bills at face value. Most are within limits--but some are not.

xxx and ccc-
Must get back to work now-

best wishes

Hal you are a gentleman, and thank you for all the direct responses. I have to however strongly disagree with you on he statement that the "MAJORITY" is ok with the pricing, OK I do not know what your discount structure is but I do know that the majority of shops are not happy with anything less than list on parts, and a minimum of 50% over cost on *NET *RV *DEALER. Just like an auto repair shop marks their parts up, we must do the same where else is our profit to come from. We're not going to make it on labor. Thanks again for starting this thread and your personal responses.

Hal, I will add my thanks also. I was pretty sure that was who you were. Most of us, I think, were a little leary of responding to you because we just wern't sure what your purpose was. Thank you for the info.

Sorry, Hal, but I've got my red pen in hand.....so.....


"My motive is simple. I want to get my Insureds a competitive price for quality goods and services."

Then do post work inspections to SEE what you are getting.



"I would like to try to work with everyone."

Indemnify your policyholders, that's your job. Until you contract for repairs, it ends there.


"I want to satisfy myself that I am paying a fair price. The majority of the glass universe accepts our pricing--but a small [and vocal] minority do not."

Pricing for "what" exactly? And, there's that contracting for repairs issue again. And you've already admitted that you change the price in exchange for referrals, but still don't recognize the differences of materials and workmanship.


"Markets do evolve, and business must evolve as well."

Yes, and.....this is relevant....how?



"You compete with Safelite and others"

No I don't, I operate on a totally different level, a higher one, thank you. I don't sell what they sell.


"I compete with State Farm and Progressive."

That's not our problem, frankly. I do hope you're not suggesting that we subsidize you in your efforts?


"If your suppliers don't recognize NAGS, or you cannot buy at a wholesale NAGS price, we allow a 25% mark up. I simply ask for proof of purchase so I don't look stupid spending. I prefer to have variances documented, that's all."

What is a wholesale NAGS price? Allow markup? What regulatory agency did you say you work for again? Proof of purchase? Inspect the car for the parts installed.


"The issue of OE and OEE can generate a lot of debate, since many companies that manufacture OE [Original Equipment] glass for a specific car also manufacture OEE [Original Equipment Equivilant] glass for other cars."

Yes they do, and they have proven that they can pass OEM specification by BEING a supplier to the car manufacturers, and PASSING THEIR crash testing. More in the next reply....and by the way, OEE is a Safelite created oxymoron that 'isn't in the dictionary'. How can one stamp a product as 'equivalant' when no one has tested it to determine that it is? Tell me that Timex is OEE to a Swiss watch? How about telling a customer that a Timex is 'functionally equivalent' to his Rolex when you write the check for his stolen watch?


"I am not sure your comments about aftermarket glass are accurate. How do you know they are not in compliance with FMVSS 205 - 212?"

How do you know they DO MEET any FMVSS? And so what if they do? THose standards are 37 years old, apply only to car manufacturers, and car manufacturers have been exceeding them for more than two decades. When your liability neck is on the line with ours for the repairs, then you may speak to what parts are used in the repair.


"Sure, it would be nice if there was an indep certifier such as CAPA for auto crash parts."

Hal, everybody knows that CAPA is an insurer funded, insurer created, insurer goverened joke. Gillis is gasping for air while CAPA circles the drain. Their latest failure was trying to legislate AM parts as being equal to OEM. How about MQVP? No...wait, they just filed bankruptcy, they won't do either...

"I need some way to audit claims to satisfy myself that what I am paying for glass replacement is fair. If there is something other than NAGS, kindly point it out."

Well, how about invoices from the marketplace? More on that below.


"I was trying to justify getting glass labor up to what we pay body shops."

Up to what you pay body shops? Why wouldn't they be 'up there' already? Also, I take it you didn't have time to read the economist's evaluation I mentioned yet?



"Sorry, but I cannot accept bills at face value. Most are within limits--but some are not."

Sorry Hal, but the courts disagree with you. The measure of fair and reasonable is the open market. Like it or not, that's the way it is, has been, and will be. The courts have already ruled on this, and the singular scene in Minnesota is just a prelude to what's coming.


Enough, my red pen just ran out of ink.

Keep trying Hal, one day, perhaps you'll really begin to see what's happening on this side of the fence. I appreciate that you're just doing your job, but you're (as in your industry) taking priveledges from this industry that aren't yours to take.

Now, please do have a great weekend, Hal.

Mark1

I just voted for you and sent a donation....

Mark1 for President! One Great independent!

KEEP UP THE GOOD WORK!

first of all hal do you have the power to make a difference?

hawk is right.
if i can negociate a better price than my competition, why do you deserve to reap the rewards. i did the work.

aaa glass buys dw xxxx gbn $100.00 gets 25% mark up nets $125.00 profit $25.00

crack up glass buys dw xxx gnb $10.00 gets 25% mark up
nbet $10.25 profit $ 00.25

does that seem fair to you?

you tell me what a reasonable price is for my insurance, and i have to pay or go some where else.

in the last month i have redone 3 jobs for a national chain that they couldn,t get right. they were all three at body shops for paint repair and w/s reinstall i saved all three w/s and charged my body shops a fair price for the r and i,molding,and urethane. wich they in turn marked up 25%. the chain glass co. payed the bill.

so you see i set a fair price, did a great job and fixed the hack jobs done by national chain slashers. then chain glass payed a fair price.