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Your profits have plummeted since 9/12/16. Read further to find out why......

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  • Your profits have plummeted since 9/12/16. Read further to find out why......

    HAVE YOU NOTICED YOUR SHOP’S PROFITS HAVE PLUMMETED SINCE 9/12/16?

    HERE’S WHY, YOU ARE INVOICING AN AVERAGE OF $54.21 LESS PER JOB UNDER THE NEW NAGS PRICING SCHEDULE ON 499 HIGHLY USED PARTS.

    IF YOU ARE INVOICING 500 OF THESE PARTS PER YEAR IT IS COSTING YOU $27,100.00. IF YOU ARE INVOICING 4000 OF THESE PARTS PER YEAR IT IS COSTING YOU $108,400.00 OFF OF YOUR BOTTOM LINE ANNUALLY. PANIC TIME!! WHAT WILL HAPPEN WITH THE NEXT NAGS RELEASE???

    WHO BENEFITS? YOU GUESSED IT, THE INSURANCE COMPANIES. IT IS HARD TO ESTIMATE EXACTLY HOW MUCH OF A WINDFALL THIS IS TO THE INSURANCE COMPANIES, BUT IT IS CERTAINLY HUNDREDS OF MILLIONS OF DOLLARS ANNUALLY, ALL PAID FOR BY GLASS SHOPS.

    IF YOU ARE EXPERIENCING SIMILAR RESULTS, PLEASE CHIME IN.

    AGA has conducted an analysis of the impact caused by the NAGS Benchmark Pricing change made on 9/12/2016. In this comparison, AGA looked at the NAGS parts it had billed in the previous NAGS Benchmark Pricing period (5/9/2016) and compared it to the changes in the latest period. The comparison is made on the NAGS list price of both FW and DW parts.

    In the attached spreadsheet, you will see our analysis as follows:

    In the first tab labeled “Qtr over Qtr $ NAGS List Change’, you will see all of the NAGS part numbers we have invoiced in the previous period with the comparison of price percentage changes. For the purposes of this list, we only show those parts that have a list price decrease of 5% or more. We did this because it was reported by NAGS that list prices decreased on the top 500 parts by 5.13%. Since we have no idea what those parts are, we wanted to see what the impact would be for all parts above this range. For any part that increased in list price, we displayed them as well.

    The second tab labeled “AGA 9-12 to 10-13 NAGS Effect” shows the parts we invoiced in the current NAGS Benchmark Pricing period in addition to the loss or gain based on the list price decrease/increase. Our loss for the first 30-days, based solely on NAGS list price comparisons, is $27,048.50 or $54.21 per job.

    There are 5 tabs in red that represent our top 5 parts we lost the most on. In these tabs we show supplier pricing for the entire year, up until October 13. The reason we are supplying this data is due to the following; first, we have heard that NAGS takes into account the wholesale pricing as part of their determination in changing the NAGS list price. It is very clear to us that there is simply no correlation and this cannot be true.

    To take it one step further, we wanted to see if there were any wholesale pricing changes on those parts where the NAGS list increased. There are two tabs in green that represent the top 2 part numbers that gave us our highest gross return. You will clearly see that wholesale pricing went down over the year, did not change at all, or went marginally up.

    In the analysis of our wholesale pricing, we found the “list” price provided by each supplier to be quite interesting. For starters, they are usually much higher than the OEM/dealer list price. Secondly, the list would fluctuate greatly with little to no effect on the wholesale price. In some cases, mostly with Pilkington, the list prices were whatever the NAGS list price was at the time. We wonder if this list price is made by the manufacturer of the glass or if it is something the supplier invents. In any case, we wonder if NAGS uses this list as part of their determination in the lowering or raising of the NAGS part list price.

    http://www.glassbuzz.com/AGA%209-12%...0ANALYSIS.xlsx
    Last edited by AGAGlassGirl; 10-25-2016, 02:22 PM.

  • #2
    There are a couple problems with the latest NAGS list price reductions:

    NAGS may claim they have applied the same secret formula on every part in this update that they've always applied, and that the chips will fall where they may. If that is the case, more power to them. That's what we'd expect them to do.

    But if that is the case, they should openly admit that the latest update has resulted in a decrease of 10-25% in billable dollars for the average shop. Insurance discounts are irrelevant; if you take the discounts, you've lost less. If you don't, you've lost more. But you've still lost a lot.

    The other problem with that position is that many of the parts that experienced drastic cuts have been out for years. This was not an issue of a "first year" correction as more data came in. And, as Gary and AGA have noted, wholesale prices have not fluctuated that much on some of the parts in question. So what changed since the last update that so heavily affected such common parts? It must have been something monumental that hadn't occurred in the last few years, or the updates would (should) have reflected those changes sooner. The industry is dying to know.

    If NAGS holds the position that the list prices on these windshields were mistakenly high, that begs the question as to why it took so long for them to realize their mistake and correct it?

    Neither position seems tenable. I would hope there is another explanation, but we'll never know unless they make a public statement.

    Finally, to NAGS: Independent glass shops are your customer (we all pay the yearly NAGS fees). And customers who buy your product deserve to have some sort of explanation when your product reduces their bottom line in such a lifestyle changing way. Even if the explanation is, "We know it sucks, but we have to follow the data wherever it leads us."

    Matt
    20/20 Auto Glass

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