Tuesday, August 18, 2015

"Wheeler Dealers" guys really bad at math

The cable show "Wheeler Dealers" aired on The Discovery Channel's affiliated 'Velocity' channel features two Brits, a tall skinny guy (Edd China, the mechanic) and a short fat guy (Mike Brewer, the used car salesman) buying classic cars that need work, fixing them and flipping them 'for a profit.'

I haven't missed an episode, and "Wheeler Dealers" has been around for over a decade now.  And each and every episode, I end up yelling at the screen once they start adding up their costs on each project to figure their 'profit.'  Their math is so rotten, it drives me nuts.

A typical episode has Mike flying over to the U.S. from the U.K, kicking the tires on several candidates on, say, a Chevrolet Camaro.  He then beats the guy down to a low ball price, and ships the car back to merry old England.  Edd gets his wrenches out (or 'spanners', as loyal British Subjects call them), does his thing on the clunker and presto, chango: the car looks like it just rolled off the show room floor.

Here's the rub: when calculating the profit, there are just so many large costs that are completely ignored when adding up what they spent.  They only include the cost of the car, the cost of any parts they purchased, and any vendor costs such as chroming and specialty work, and if purchased from a foreign country, shipping costs only, that's it.  What they DON'T add in are the following:

* Labor.  This is a biggie.  Edd works his butt off putting these pieces of crap back into working order, and not a dime of his massive efforts are calculated. Some of these jobs Edd takes on take him weeks and weeks.  He is an accomplished mechanic, and should bill his time out at approximately $80 and hour or so, but he works for nothing, apparently.  And then there's Mike's time and energy spent running around finding these cars, tracking down parts, and never including a dime of his efforts.  This line item is huge.

* Overhead.  Edd has quite the nice shop, with every imaginable tool needed for virtually every obscure job, to include computers for tuning, an overhead hydraulic lift, and all manner of hand tools and often expensive systems.  Not a dime of the rent, mortgage payment, maintenance, etc. or any other cost of this is included in their "profit." And advertising, nothing is mentioned of the cost of marketing these cars. Not one penny of any of this huge overhead these guys have invested in their operation is considered at all.

*Additional labor.  Edd at almost every job calls over his mate (or 'friend,' as we say across the pond) Paul to give him a hand on some of the more cumbersome efforts, or when more than one guy is required.  Paul apparently works for free as well, I never see an invoice from Paul when it comes to adding up the costs.

*Travel costs, shipping costs, etc.  Lots of plane tickets, hotel bills and gasoline/trailer costs are completely ignored.  Edd carts cars off to the paint shop about every other episode, returns to the shop with his trailer and truck.  Once the car is done, he drags the trailer and truck back to the paint shop, picks up the finished car and returns to the shop.  Not a dime of all of this is recorded. These thousands of dollars per car can add up to big money, but these lunkheads never account for a penny of it.

So when comes time for Mike to boast and crow of a huge profit, don't believe a word of it.  Just double the costs they have admitted to, and you will have a more accurate idea of what it costs to bring a piece of crap that was heading for the crusher back to life.

And I still look forward to every episode.  So that I can yell at Mike and Edd some more.  

I love this show.  I know it certainly doesn't sound like it, but I do.

9 comments:

LL said...

Maybe the TV program pays those other costs so that they can have a profit? Therefore, the voodoo bookkeeping shows the madness to their method.

I haven't seen the show but I'll look it up.

Ed Bonderenka said...

Suspension of disbelief is often a prereq.

Kid said...

Fredd, I agree but I've never seen the show.

Fredd said...

LL:

Of course the TV show proceeds enable their 'voodoo accounting' to work out to a 'profit.'

I am in a similar business, and I can guaran-damn-well-tee you that if you ignore all of the labor, overhead, etc. that these Wheeler Dealer bozos ignore, your business will fail in a matter of weeks.

Still love those scalawag Limies, though.

Fredd said...

Kid:

Watch this show, and if you don't you'll die.

Just giving you the heads up.

Fredd said...

Ed: I don't get it.

Ed Bonderenka said...

I couldn't think of a better way to phrase it.
It seems sometimes like a good movie with a fantastic plotline, you've just got to ignore the details that might detract from your enjoyment.

Woodsterman (Odie) said...

I've never heard of the show or the channel. Sounds like you're really into it. Welcome to the world of self employment. In my business we're lucky to make $5.00 an hour after everything is added up. I try to explain that to customers when they want to pay less. My words are usually, "So, you want me to work or less than $5.00 an hour? Would you work for that?" That's when they usually leave my booth, a little wiser but with no piece of my work ... alas.

Fredd said...

Odie: In my business, I am all over the place when it comes to calculating my hourly earnings: on some deals, I actually lose money per hour, and others I make $400/hour.

Nothing like being self employed.