Beware of Low Labor Rates!!!!!!!!

Just because a forklift service provider dangles a super low labor rate in front of you it does not mean that you will save maintenance and service expenditures on your forklifts!

How can a service provider offer a significantly lower labor rate? In a nutshell, they can’t….at least not in reality. You see, any legitimate forklift service provider is going to have somewhat similar costs of doing business….labor costs, benefits, service vehicles, equipment, training, workers comp costs, P&C insurance, etc. 

In many cases when a service provider quotes you a low labor rate for their service, in reality their fully burdened cost of doing service is actually as high, or even higher than the cheap labor rate they are quoting.

How can they do that? Actually, they can’t since selling for less than cost will doom a company to extinction. So….the reality is that the very low labor rate is a bit of a smoke screen for those providers that are ‘ethically challenged’ and don’t have the abilities required to sell service based on their merits.

So how do they survive with these super low labor rates?  Well, we’ve seen many ways over the years in this market place. First, there are those dealers who quote a real cheap rate and then simply bill for more time than they actually took to do the job. Effectively they may actually double their labor rate by billing for twice the time they take to do a job. How can they get away with this? Simple, they bank on the fact that the majority of people are extremely busy these days and don’t pay attention to how long a service tech was actually working on their forklift. 

Second, we’ve seen dealers who in fact charge for the proper amount of time at their very low hourly rate. The problem is that they mark up their parts as much as 4000% once again based on people not paying attention or knowing how much a part should cost. With this exorbitant parts pricing the effective labor rate jumps exponentially and you are paying the equivalent of 2-3 times the quoted low labor rate. 

Third, we often times see ‘independent’ service providers quoting very low hourly labor rates. It is true that an independent provider may well have a marginally lower cost of doing business. After all they don’t carry inventories of either equipment or parts. Unfortunately they also don’t have direct access to parts nor to factory engineers, trainers, service bulletins and important software. Additionally they may not have adequate insurance coverages which can lead to huge problems in a customer facility. Consequently, with independents you general get less trained technicians working on your equipment which leads to more diagnostic time, longer repair times, and more frequent unnecessary repairs. Additionally, independents buy parts from forklift dealers and then mark those parts up so that the customer ends up paying 20-30% or more for the parts then if the forklift dealer was doing the repair.  

With Atlantic Lift Truck you get a dealer whose level of business ethics is verified by our accreditation and A+ rating by the BBB. This assures you that you will be treated in an ethical, professional manner and you can be confident that service from our company will be represented truthfully and backed by our customer satisfaction rating of 98.2%.

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    3051-B Washington Blvd.
    Baltimore, MD 21230

    About Us

    Atlantic Lift Truck, Inc. defines itself by its exceptional and ethical business practices. One of the cornerstones of our commitment is our willingness to be transparent in our business practices throughout the entirety of business with our customers. Honesty truly is the best policy. Read More