Reasonable Parts Markup?

[dr_clyde]

Bottom line, every single thing you buy in the world gets marked up in some way shape or form, usually several times. Every time there is a transaction, markup is applied because that transaction has a cost.

Industry has shown that a simple percentage markup is the best way to do this.

 

[ctandc72]

Strange how some people can't grasp that the money has to come from somewhere.

This is one of those funny topics that seems to be split between people who know how businesses work and those who think they know how they work.

The "I'll do it myself and save money" crowd always forgets that their time has value and opportunity cost, and they act as though someone charging for the time it takes to procure parts via markup is somehow not ok. Nevermind the lack of warranty or confidence in customer supplied parts.

That's a valid argument if the parts qualities are equal or OEM quality or better. Many independent shops buy their parts from local chains or have an account with local 'wholesale' parts suppliers. The same exact part their customer could go buy for $50, they buy for $40, then charge $75 for it.

Of course on the flip side, I know a few very successful independent shops that mainly buy OEM parts or better. They charge the customer a mark up, but the squeeze on OEM parts margins for most retail dealers is larger. Customer would pay $75 for a part at their local dealer. They could order it from an online OEM parts dealer for say $50+ shipping. The shop gets it at wholesale and sells it to the customer for $65.

 

[liliysdad]

Yep…if you can buy better parts than I can, then I absolutely don’t mind paying more.

When you’re shotgunning the same junk parts that I can buy at the parts house, and charging me 75-100% more than I pay, that’s an issue.

 

[HannibalLecter]

Yep…if you can buy better parts than I can, then I absolutely don’t mind paying more.

When you’re shotgunning the same junk parts that I can buy at the parts house, and charging me 75-100% more than I pay, that’s an issue.

But apparently that's not a problem for some because, simply, the money must come from somewhere.
Unfortunately though, I would assume, the average customer would always opt for the cheaper part

 

[dr_clyde]

I also find most people don't bother to specify WHAT parts they want, they just leave it up to the shop. If you want OEM, performance or something unusual, you HAVE to ask, or most shops will assume you want the cheapest option.

The shops I've worked in have always allowed their customers to specify what they wanted, and it was included on the quote. If the customer was ok with the price, we ordered the parts they asked for and installed them. If they didn't care or it didn't matter, we just get whatever the parts store sold, and we charged accordingly.

Sometimes there was significant legwork involved in chasing down specific performance or specialty parts. Lots of measuring, layout or inspection involved to determine what exactly we needed. This was just charged by the hour and as far as I know the shop just charged a flat percentage markup on the parts to cover the administrative/overhead costs associated with procurement.

It can easily take an hour or more to just determine WHAT parts you need in some cases. Especially in custom or racing applications.

In my shop, we don't work on cars, but we do procure and do purchasing for customers. There is a LOT of overhead involved with just generating a quote, not to mention actually completing the job. I've got 2+ hours into a quote for a weldment for a customer, and I haven't even gotten the job. I have to build that cost into the final price somewhere, and it's not accurate or fair to expect the labor on the floor to cover 100% of administrative costs, but the costs MUST be paid somehow. I had to generate a drawing, spec and get a quote on material, spec and quote hardware, paint, and other consumables. I physically must unload and process this material. The forklift doesn't generate any billable hours, and yet I have to pay for it, the maintenance and propane for it, and the operator somehow. I can't just put a line item on the bill for ".25 HR @$100/HR, unload steel truck" or the customer would pitch a fit. No, that stuff gets paid for with markup.

It is the same for a auto shop. Maybe it only takes a five minute phone call to NAPA to get your parts, and that may not be worth 10 or 20% to you, but that pays for the salaries of the service writer, the receptionist, the gopher kid, and the custodian.

As usual, the free market determines what is fair. If people didn't like it, it wouldn't be this way.

 

[2ndGearRubber]

Good luck. Also, you should know, perception is a thing. I don't believe you would go to a shop that charges 1000$ an hour, but says the parts are free, would you? Also, I fail to see how the cost of an all makes all models shop should fall to clients of cheaper brands for example. Specialty tools and diagnostics for a specific brand , sure, but If you charge diagnosis prices for a Ferrari in a toyota and are proud of that, yeah, great business model

Because when the guy who owns a 2020 lexus, 2000 cummins, and a 90s corvette, plus his wife's kia - and wants them all worked on by one place, that means cost to retain a tech who can do that goes up.

I don't do super cars, although I do some porsche. Labor rate is the same on your 70s mustang as it is a 2022 with stop start issues.

 

[2ndGearRubber]

Yep…if you can buy better parts than I can, then I absolutely don’t mind paying more.

When you’re shotgunning the same junk parts that I can buy at the parts house, and charging me 75-100% more than I pay, that’s an issue.

Shotgunning ANY parts is an issue.

 

[HannibalLecter]

Because when the guy who owns a 2020 lexus, 2000 cummins, and a 90s corvette, plus his wife's kia - and wants them all worked on by one place, that means cost to retain a tech who can do that goes up.

I don't do super cars, although I do some porsche. Labor rate is the same on your 70s mustang as it is a 2022 with stop start issues.

So, if you charged him the same for diagnosis with a specialty tool for the Lexus and the Corvette or the Kia he would be okay? The ideal client for sure.

 

[2ndGearRubber]

So, if you charged him the same for diagnosis with a specialty tool for the Lexus and the Corvette or the Kia he would be okay? The ideal client for sure.

Yeah.... the labor rate is the same. Diag is diag. You bring me an obd1 car, or a 2023, or whatever. It's $140/hour.

Be it I use a test light and a wiring diagram, or I have multiple scan tools used and a labscope with leads taped to the side of the car on a test drive. Diag is diag.

 

[HannibalLecter]

Yeah.... the labor rate is the same. Diag is diag. You bring me an obd1 car, or a 2023, or whatever. It's $140/hour.

Be it I use a test light and a wiring diagram, or I have multiple scan tools used and a labscope with leads taped to the side of the car on a test drive. Diag is diag.

Okay, if it works it works. A specialty tool obtained only from the manufacturer for a 2022 car that costs top dollar certainly isnt the same with INPA for a 2000 bmw that I can get for free, though. I wouldn't like to absorb that cost. But if I had a more expensive and new car I may would be more forgiving and maybe even appreciated getting charged the same

 

[Sumboodie]

I just looked up a Moog EV455 at Oreilly's and it's 68.99+tax. Schwab's is going to get it local and mark it up. Doesn't matter what you can order it for on the internet.

69 cost, we'd charge about $92 at work.

 

[2ndGearRubber]

Okay, if it works it works. A specialty tool obtained only from the manufacturer for a 2022 car that costs top dollar certainly isnt the same with INPA for a 2000 bmw that I can get for free, though. I wouldn't like to absorb that cost. But if I had a more expensive and new car I may would be more forgiving and maybe even appreciated getting charged the same

I have 3 scan tools that would talk to a 2022 and your bmw. Cost is cost. You need scan tools no matter what.

When I'm tracking down discontinued parts for 20yo cars, the new car people with available parts are absorbing that cost.

I have a 2012 kia I've spent 45min trying to estimate a fuel sender and lock ring. Discontinued. I think I found 1 online vendor with it. Local kia dealer I've called 5 times, won't answer the phone.


If anything, I would be inclined to charge a 2000 BMW or similar era euro WAAAAYYYY more than any other type. Most owners are not informed consumers like yourself, and budget ballers can waste a lot of time.

 

[HannibalLecter]

I have 3 scan tools that would talk to a 2022 and your bmw. Cost is cost. You need scan tools no matter what.

When I'm tracking down discontinued parts for 20yo cars, the new car people with available parts are absorbing that cost.

I have a 2012 kia I've spent 45min trying to estimate a fuel sender and lock ring. Discontinued. I think I found 1 online vendor with it. Local kia dealer I've called 5 times, won't answer the phone.


If anything, I would be inclined to charge a 2000 BMW or similar era euro WAAAAYYYY more than any other type. Most owners are not informed consumers like yourself, and budget ballers can waste a lot of time.

Cost is cost. Thats a thing to put in a quote. The fact that you have 3 tools that can do both doesn't mean the cost should be absorbed from the one which it wasn't needed. Also, I didn't speak of witchhunting of rare parts. That's of course billable, I disagree with the practice of markup. An uneducated customer that is a pain in the rear end I agree is the worst and it may even save money to oust him. Completely undersandable. I was selling a window gutter once, the guy had me one hour in the phone. I asked more for the hassle and annoyance. I would put it under consulting though, not markup

 

[dr_clyde]

Cost is cost. Thats a thing to put in a quote. The fact that you have 3 tools that can do both doesn't mean the cost should be absorbed from the one which it wasn't needed. Also, I didn't speak of witchhunting of rare parts. That's of course billable, I disagree with the practice of markup. An uneducated customer that is a pain in the rear end I agree is the worst and it may even save money to oust him. Completely undersandable. I was selling a window gutter once, the guy had me one hour in the phone. I asked more for the hassle and annoyance. I would put it under consulting though, not markup

So, you think the guy with an cheaper MSRP car should be charged less for diagnostics than a guy with the more expensive MSRP car just because they didn't use the fancy scan tool or special tool?

Should the labor rate be different if your car doesn't use the lifts? The air compressor? What about the tire machine or the alignment rack?

The price of the shop rate is a calculated sum based on ALL the capacities and abilities of the shop, not just on what you want done. The overhead doesn't discriminate, it costs a certain amount of money to keep the lights on, the equipment available, in good repair and the techs employed that know how to use it. Doesn't matter if all you want done is a tire rotation and LOF, the overhead didn't change, so why should your labor rate?

 

[HannibalLecter]

So, you think the guy with an cheaper MSRP car should be charged less for diagnostics than a guy with the more expensive MSRP car just because they didn't use the fancy scan tool or special tool?

Should the labor rate be different if your car doesn't use the lifts? The air compressor? What about the tire machine or the alignment rack?

The price of the shop rate is a calculated sum based on ALL the capacities and abilities of the shop, not just on what you want done. The overhead doesn't discriminate, it costs a certain amount of money to keep the lights on, the equipment available, in good repair and the techs employed that know how to use it. Doesn't matter if all you want done is a tire rotation and LOF, the overhead didn't change, so why should your labor rate?

No. I definitely know of shops that charge differently if the lift is used for sure. And for expensive diagnostic tools.Diagnosis is billable. And for a tire machine.And the alignment rack. And no the overhead did change,because someone invested in these tools. If you agree to get charged indirectly for a work that wasn't done on your vehicle my hats off to you. I don't. So If I understand correctly, usual shop rate $120 , suddenly goes to $130, you ask why and they say to you, eh, you know, we put an alignment rack. And you were here there for unrelated work. And that wouldn't sit wrong with you? Let's agree to disagree. I'll leave it here

 

[toyotadriver]

I don’t have a problem with shops making money by marking parts up over their cost. I don’t even have an issue with shops choosing which brand part to use. Where I come off the rails, however, is when that part is marked up beyond retail.

Shops get price breaks from parts suppliers for a reason. Anything between that jobber vs retail price is unacceptable to me.

That being said…I know I’m wrong and this is why i refuse to use shops for anything not absolutely necessary. In those rare cases where I have to, I grin and bear it while being pissed of the whole time. Parts stores are parts stores, mechanics should be mechanics.

Tell me which shop you would pick. You need a repair on your vehicle that you are unable to do.

Shop 1: Retail price on the part is $100. Shop quotes you $100 for the part and $200 for labor.

Shop 2: Retail price on the part is $100. Shop quotes you $125 for the part and $150 for labor.

Both are well regarded shops and you know either can do the job well. Which shop do you pick?

 

[2ndGearRubber]

So, you think the guy with an cheaper MSRP car should be charged less for diagnostics than a guy with the more expensive MSRP car just because they didn't use the fancy scan tool or special tool?

Should the labor rate be different if your car doesn't use the lifts? The air compressor? What about the tire machine or the alignment rack?

The price of the shop rate is a calculated sum based on ALL the capacities and abilities of the shop, not just on what you want done. The overhead doesn't discriminate, it costs a certain amount of money to keep the lights on, the equipment available, in good repair and the techs employed that know how to use it. Doesn't matter if all you want done is a tire rotation and LOF, the overhead didn't change, so why should your labor rate?

Or which tech you get?

I'm much more expensive than anyone else in here. But I might do an oil change, just an oil change. Sometimes I'm all that is available and I'm doing work "below my pay grade". Does the oil change cost more? What if another tech starts working on a diag, cant figure it out, and I come over? Did the bill just go up? Are they paying for the first guys time?

Euro car needs brakes, canned job. Pads, rotors, wear sensor. Do we charge a higher rate because it's a euro over the GM with CAN network issues? It's a euro, but it's a gravy brake job. But the diag is just a chevy truck?

I'm confident someone could come up with a program to not socialize costs within total overhead and instead quantify a legitiamate gross labor cost per ticket. Which would then be converted into the "retail" labor cost you would see on an invoice. I'm also confident the level of documentation and metric gathering, plus the extra support staff to do so, would result in a much higher labor rate than the typical method.

 

[liliysdad]

Tell me which shop you would pick. You need a repair on your vehicle that you are unable to do.

Shop 1: Retail price on the part is $100. Shop quotes you $100 for the part and $200 for labor.

Shop 2: Retail price on the part is $100. Shop quotes you $125 for the part and $150 for labor.

Both are well regarded shops and you know either can do the job well. Which shop do you pick?

Not entirely sure that scenario washes, but I see where you are going....and I completely understand the way they game is played.

If presented in that manner, only a fool would choose the higher priced option. That reality has no bearing on whether or not I like the way its done, and all the more reason to keep doing my own work whenever feasible.

 

[bb29510]

every shop i know does 100% markup and wont use customer parts

 

[toolenthusiast]

The price of the shop rate is a calculated sum based on ALL the capacities and abilities of the shop, not just on what you want done. The overhead doesn't discriminate, it costs a certain amount of money to keep the lights on, the equipment available, in good repair and the techs employed that know how to use it. Doesn't matter if all you want done is a tire rotation and LOF, the overhead didn't change, so why should your labor rate?

Lol. Walk into any bodyshop and look on the wall:
Body labor: $**
Paint labor: $**
Frame labor: $***
Mechanical labor: $***
Body materials: $**
Paint materials: $**
Outside storage: $**/day
Inside storage: $***/day
Aluminum body labor: $***
Aluminum structural labor: $***
Tesla body labor: $***
etc, etc, etc…

Or my buddy’s shop. He’s an ace diagnostician with a sterling reputation.
Hourly labor rate: $1xx.00
Hourly labor rate (Audi, BMW, Cadillac, Corvette, Hummer, Porsche, Volkswagen): $2xx.00

 

[dr_clyde]

No. I definitely know of shops that charge differently if the lift is used for sure. And for expensive diagnostic tools.Diagnosis is billable. And for a tire machine.And the alignment rack. And no the overhead did change,because someone invested in these tools. If you agree to get charged indirectly for a work that wasn't done on your vehicle my hats off to you. I don't. So If I understand correctly, usual shop rate $120 , suddenly goes to $130, you ask why and they say to you, eh, you know, we put an alignment rack. And you were here there for unrelated work. And that wouldn't sit wrong with you? Let's agree to disagree. I'll leave it here

How has the overhead not changed due to capital investment? That money had to come from somewhere. How do you think things like lifts, compressors, tire machines, and the like are paid for? You think that the SnapOn man just leaves AC machines and Scan tools laying under the tree every December? The shop has to buy equipment to function. The more equipment the shop has, the more space they need, and the higher the rent, utilities, taxes and so on. Speaking of taxes, taxes are paid on the equipment. Personal property tax is a thing, and businesses pay for all the machines on the floor, used or not. It takes up floor space, requires skilled labor to utilize, sometimes requires special tooling or consumables, all kinds of factors.

Clearly you've got your mind made up and that's fine, I don't have to work with you. Threads like this make me SO HAPPY I don't work on cars anymore.

Shop rate is a reflection of capacity. The more capacity you have, the more you charge. I absolutely have raised my shop rate based on the machinery and tools we have purchased. If I spend significant money to increase the capacity of my shop, I am going to charge more. If that means less low paying work and more high paying work, EXCELLENT. I don't want the cheap jobs anyway.

 

[dr_clyde]

Lol. Walk into any bodyshop and look on the wall:
Body labor: $**
Paint labor: $**
Frame labor: $***
Mechanical labor: $***
Body materials: $**
Paint materials: $**
Outside storage: $**/day
Inside storage: $***/day
Aluminum body labor: $***
Aluminum structural labor: $***
Tesla body labor: $***
etc, etc, etc…

Or my buddy’s shop. He’s an ace diagnostician with a sterling reputation.
Hourly labor rate: $1xx.00
Hourly labor rate (Audi, BMW, Cadillac, Corvette, Hummer, Porsche, Volkswagen): $2xx.00

I'm sure shops exist that break labor down like that, but I don't see them often. I've seen a diagnostic rate and a general labor rate split, but that's all I've ever seen.

You ever heard the phrase "the rent determines the tenant"? If I was your buddy, I'd charge $200/hour for all my labor and try to fill my schedule with that work. Why would I even want the $100/hr work if there's $200/hr work to be had and I'm good at it, tooled for it and have a sterling reputation? Seems to me he's leaving money on the table by allowing his schedule to be filled up with the lower paying work.

I don't pretend to be an expert on auto repair. I worked in shops for several years, my family owns and has operated shops my whole life, but I'm not directly involved. I know how the sausage gets made in our shop, but not everywhere. I'm sure there's always a corner case somewhere with someone waiting to say NOT ME, I'M DIFFERENT. In fact, I left auto repair BECAUSE of the customer and their attitude towards mechanics and repair shops. In repair work, the customer is rarely in a good mood. One of their most expensive possessions has broken, and it's gonna cost money to fix. They're usually highly inconvenienced too, the timing is never good. This rarely makes people happy. And suddenly, the mechanic's shop is the bad guy because they're charging a rate and selling parts at a price that lets them run a profitable business. A price that is almost always agreed upon in advance. And still they get called crooks, thieves and liars. And I'm sure there are some who are crooks, thieves and liars, but most everyone is out to make an honest buck. But because its expensive and most people can't do it themselves, they're afraid of being taken advantage of or somehow the guy fixing your transmission doesn't deserve to make a good living.

I suspect people are all in a knot because they get an itemized bill and see items they don't agree with, but for some reason are ok with the total price if they don't know the breakdown. When I quote a job, I send them one price. I break the job down very granularly in my quoting process, but the customer doesn't see any of that. I just quoted a job today that has hardware, paint, steel, welding labor, machining labor, install labor and some margin for error. But I just wrote the quote up as X assembly, QTY 1 @ X price. They don't need to know what I'm spending on parts, labor or how much of each spent. As long as I deliver on time and within budget all is well. If I go to the mechanic's shop, I ask him how much TOTAL. If he says $500, and I agree with his price, I don't care what the breakdown is. If he buys the part for $1 and charges me $100, I don't care. As long as he charges me the price quoted, he can do whatever he likes for his margins.

In my world, the shop rate is directly tied to how much value you can provide for the customer. If you're not using the machines you bought, why even keep them? It's not like shops buy an expensive tool, let it sit in the corner and never use it but charge more just because they have it. If that were true I'd buy a million dollar CNC and charge $500/hr to drill holes with my drill press. No, I charge what I charge because we actively are busy with the equipment we've bought to do the work we want to do, and anything smaller is a distraction from what we really want to be doing. If I quote $100/hr to weld a cracked mower deck, hopefully they'll go away and we can keep doing the work that we're best at. If I end up welding the mower deck, I at least will be breaking even, but in reality I'm losing money because I'm NOT working on the job that is keeping the lights on and the machines paid for. So, I have to charge everyone the same rate, even if I don't use my CNCs or my big welders or what have you. I have to because if I'm working on your thing for $50/hr, I'm NOT working on their stuff for $100/hr.

So, if I have the tools to be doing high end auto work and am busy with that kind of work, I have to charge the same rate for oil changes or brakes on a Camry because every hour I'm doing a Toyota brake job I'm not doing a high end job for way more money.

 

[toyotadriver]

Not entirely sure that scenario washes, but I see where you are going....and I completely understand the way they game is played.

If presented in that manner, only a fool would choose the higher priced option. That reality has no bearing on whether or not I like the way its done, and all the more reason to keep doing my own work whenever feasible.

So total price is really what matters and if the total price is less, you'll ignore your "principles" and pick the cheaper price.

Maybe your "principles" are stupid and you should be focusing on total price and not how the evil mechanic shop gets there.

But, this does illustrate a valid point......the stupid consumers paying money to a repair shop are bothered about stupid things and marking up parts may upset them illogically. So, run up your labor rates or repair times and keep parts markup low. The consumers will be paying you to repair their **** and be happy to do so.

If I owned a shop, I'd have "stupid customer" rates. They will either leave to bother my competitors or make their headaches really worth my time.

 

[Wrench97]

So I need someone to explain to me why it is ok for Rockauto, NAPA, Autozone or any OEM dealer to mark up the parts?
Rockauto especially since they stock nothing and drop ship whatever you order...........................How dare the BMW dealer mark up a part they special order for you right?

 

[Wrench97]

Lol. Walk into any bodyshop and look on the wall:
Body labor: $**
Paint labor: $**
Frame labor: $***
Mechanical labor: $***
Body materials: $**
Paint materials: $**
Outside storage: $**/day
Inside storage: $***/day
Aluminum body labor: $***
Aluminum structural labor: $***
Tesla body labor: $***
etc, etc, etc…

Or my buddy’s shop. He’s an ace diagnostician with a sterling reputation.
Hourly labor rate: $1xx.00
Hourly labor rate (Audi, BMW, Cadillac, Corvette, Hummer, Porsche, Volkswagen): $2xx.00

That's in response to dealing with insurance companies and adjusters............................

 

[2ndGearRubber]

How has the overhead not changed due to capital investment? That money had to come from somewhere. How do you think things like lifts, compressors, tire machines, and the like are paid for? You think that the SnapOn man just leaves AC machines and Scan tools laying under the tree every December? The shop has to buy equipment to function. The more equipment the shop has, the more space they need, and the higher the rent, utilities, taxes and so on. Speaking of taxes, taxes are paid on the equipment. Personal property tax is a thing, and businesses pay for all the machines on the floor, used or not. It takes up floor space, requires skilled labor to utilize, sometimes requires special tooling or consumables, all kinds of factors.

Clearly you've got your mind made up and that's fine, I don't have to work with you. Threads like this make me SO HAPPY I don't work on cars anymore.

Shop rate is a reflection of capacity. The more capacity you have, the more you charge. I absolutely have raised my shop rate based on the machinery and tools we have purchased. If I spend significant money to increase the capacity of my shop, I am going to charge more. If that means less low paying work and more high paying work, EXCELLENT. I don't want the cheap jobs anyway.

Hell, much like markup, is for OTHER people. Never ourselves obviously.

I see the same shops play that race to the bottom. When it's time to replace the racks, update the aligner software, or fix the roof they're broke. All that money they saved people, and the business isn't worth **** and doesn't have any money.

Automotive is going to get wild over the next decade or so. Hell look what's happened in the last 10.

 

[2ndGearRubber]

So I need someone to explain to me why it is ok for Rockauto, NAPA, Autozone or any OEM dealer to mark up the parts?
Rockauto especially since they stock nothing and drop ship whatever you order...........................How dare the BMW dealer mark up a part they special order for you right?

Sometimes you even need to pay freight dealer to dealer.

I have parts coming from Memphis and Southern Florida as we speak.

 

[liliysdad]

So total price is really what matters and if the total price is less, you'll ignore your "principles" and pick the cheaper price.

Maybe your "principles" are stupid and you should be focusing on total price and not how the evil mechanic shop gets there.

But, this does illustrate a valid point......the stupid consumers paying money to a repair shop are bothered about stupid things and marking up parts may upset them illogically. So, run up your labor rates or repair times and keep parts markup low. The consumers will be paying you to repair their **** and be happy to do so.

If I owned a shop, I'd have "stupid customer" rates. They will either leave to bother my competitors or make their headaches really worth my time.

You are awfully wound up over something that many of us, myself especially, have ceded to be a foregone conclusion. We all know that parts are marked up…and we all know it’s a shell game.

Just like buying a car, the way it is is the way it because it’s the way it’s always been. Folks get tired of doc fees and four squares, but they play the games because that’s what’s required to make the transaction.

Just charge what you need to charge to make then only you need to make. Stop trying to hide it in parts markups, shop supplies, diag fees, etc…just charge the price.

Oh well, life goes on, and stupid customers still keep the lights on.

 

[dr_clyde]

So I need someone to explain to me why it is ok for Rockauto, NAPA, Autozone or any OEM dealer to mark up the parts?
Rockauto especially since they stock nothing and drop ship whatever you order...........................How dare the BMW dealer mark up a part they special order for you right?

Because you don’t see the difference. You have no idea what Rock Auto pays, but every Tom **** and Harry can go into Napa and see the retail price for a water pump.

If people could see the wholesale prices, you bet your shorts people would be caterwauling about how bad Rock Auto is ripping them off.

 

[toyotadriver]

You are awfully wound up over something that many of us, myself especially, have ceded to be a foregone conclusion. We all know that parts are marked up…and we all know it’s a shell game.

Just like buying a car, the way it is is the way it because it’s the way it’s always been. Folks get tired of doc fees and four squares, but they play the games because that’s what’s required to make the transaction.

Just charge what you need to charge to make then only you need to make. Stop trying to hide it in parts markups, shop supplies, diag fees, etc…just charge the price.

Oh well, life goes on, and stupid customers still keep the lights on.

I think you're the one wound up about it. I'm just laughing at the silliness of people.

 

[unslow1]

I'll just say that often times the margin between shop's cost and retail price isn't that great. Like sometimes a few dollars.

That ain't enough to make a living.

That's why a lot of parts stores like NAPA show a "list price" on commercial parts invoices that is often 2-3 times the "retail price". They want you to buy it from them for 5-10% off retail then resell it for twice the retail price.

Then there's the argument of retail customer discounts/coupons sometimes allowing a retail customer to get a part cheaper than the shop's commercial price. How much should the shop mark up the part if their cost is higher than the retail customer can get it for?

This something people really don't understand. Often the the shop will have to pay more than the retail customer. They may get a huge discount on some things but because they have a commercial account they often cannot get the special of the day pricing. Their pricing is usually fixed. Sometimes I buy stuff on the shop discount and sometimes I buy under my own name. I check to see which way is the lower cost.

 

[unslow1]

It's a problem for the end client, because the end client is price sensitive (as we all generally are) and doesn't want to pay the additional markup. If the end client doesn't pay the piper, the car doesn't get worked on. Simple as that.

This is the standard industry system which has evolved. I'd happily sell parts at retail and charge you the $250+ per hour for an all makes all models shop to cover the difference. Price wouldn't change out the door.

The ticket will be 65% gross profit, gross, between parts markup $$$ and what your effective labor rate is after costs. Which is often about 50% of the labor rate on the front end. You're gonna pay what you're gonna pay, move the numbers between the columns all you like.

I know a few shops that do charge exactly what they pay for parts. They also charge a higher hourly rate and no by the book on jobs. We live in IL and if your rusty car has a bolt break off changing the water pump you are being charged every minute they are working on it. If it comes apart easy you win. You can also lose big time if they run into a lot of trouble.

One of them was telling me today about a brake job from Friday. That rear brake job turned into two wheel cylinders added. Don't like it call the tow truck to come get it.

 

[2ndGearRubber]

I know a few shop that do charge exactly what they pay for parts. They also charge a higher hourly rate and no by the book on jobs. We live in IL and if your rusty car has a bolt break off changing the water pump you are being charged every minute they are working on it. If it comes apart easy you win. You can also lose big time if they run into a lot of trouble.

I always wonder about pay plans with that.

I make 110ish plus benefits. I smoked a 1.6 hour job on a 5 series today. How's the guys pay work out?


I'd always be tepid about billing actual time. Variations between techs, dealing with the rotten stuff, etc. I've spent 8 hours on a 1.5 hour job. Can the customer even afford the roll.over?

 

[unslow1]

I always wonder about pay plans with that.

I make 110ish plus benefits. I smoked a 1.6 hour job on a 5 series today. How's the guys pay work out?


I'd always be tepid about billing actual time. Variations between techs, dealing with the rotten stuff, etc. I've spent 8 hours on a 1.5 hour job. Can the customer even afford the roll.over?

They are very clear that they will not rig something together. Two of the three places I know will not use Duralast/Driveworks parts. They also have Snapon scanners and tool truck tools. One guy I know he pays his guys hourly and takes all the tough jobs himself. I believe he pays well hourly and provides no benefits. The other guys I don't know but I would guess similar because of the age of the guys working there.

 

[unslow1]

That's a valid argument if the parts qualities are equal or OEM quality or better. Many independent shops buy their parts from local chains or have an account with local 'wholesale' parts suppliers. The same exact part their customer could go buy for $50, they buy for $40, then charge $75 for it.

Of course on the flip side, I know a few very successful independent shops that mainly buy OEM parts or better. They charge the customer a mark up, but the squeeze on OEM parts margins for most retail dealers is larger. Customer would pay $75 for a part at their local dealer. They could order it from an online OEM parts dealer for say $50+ shipping. The shop gets it at wholesale and sells it to the customer for $65.

Change that to all shops including dealerships. Just because the dealer worked on your car don't think there isn't a very good chance those parts came from the local chain parts store. I have never seen any dealership that doesn't have multiple accounts at every local parts retailer.

 

[rust in the eye]

Beating the dead horse:
Typical parts suppliers to pro shops have a "list" price they show on their invoices. Depending on vendor these can be arbitrary(especially on house brands) and inflated to make the shop feel like they are getting a better deal than they are. This "list" price is customarily what shops charge their customer. Policies vary but they pretty much all use this often meaningless "list" price at least as a reference.
This worked great decades ago when their were established name brand replacement parts made here for domestic brands and Europe or Japan for the imports. Every parts house used the same catalogs with the same "list" prices. Now that every wood fired foundry in the third world is producing auto parts the quality and price have declined.
The bigger problem is when the "list" price for a given item, lets call it a wheel speed sensor for a BMW which has a moderately high OEM price gets substituted for the cheaper version. The list price remains high but still below OEM creating a big margin for the shop that cares to gamble on junk and a false sense of economy for the customer who paid a bit lower price for what is typically a far inferior part.
The best shops that install top quality parts usually don't have the bogus list prices auto part chains use for their low line house brands.
Also, anybody reading this can buy X part (not OE) on-line from a dozen vendors cheaper than most shops will pay for the same piece. The difference there being the parts store will schlepp it to the shop, often in minutes, wait to be paid and usually pick it up and refund without squawking when the mechanic misdiagnoses, etc.
Fair mark-up? Plenty of other trades apply 2, 3 or more times cost to materials, all the mechanics I know are far, far less than that.
If the job is done correctly with quality bits at a price competitive with local competition you shouldn't be concerned with the owner's parts mark up.
Now for my rant: That ************ fee for "shop supplies"? F U this is called "overhead" and these fees are simply gouging. Often none of these miscellaneous materials, chemicals and whatever they whine about having to pay for are even employed on a given job yet the fee remains. I see invoices for this AND then separate charges for brake cleaner etc. on top. What's next? Lunch for service writer?
Not earning enough money? Raise your labor prices and quite ************ gouging the customer you ought to be grateful to serve. I think dealers started this, don't get me started.........

 

[Wrench97]

Beating the dead horse:
Typical parts suppliers to pro shops have a "list" price they show on their invoices. Depending on vendor these can be arbitrary(especially on house brands) and inflated to make the shop feel like they are getting a better deal than they are. This "list" price is customarily what shops charge their customer. Policies vary but they pretty much all use this often meaningless "list" price at least as a reference.
This worked great decades ago when their were established name brand replacement parts made here for domestic brands and Europe or Japan for the imports. Every parts house used the same catalogs with the same "list" prices. Now that every wood fired foundry in the third world is producing auto parts the quality and price have declined.
The bigger problem is when the "list" price for a given item, lets call it a wheel speed sensor for a BMW which has a moderately high OEM price gets substituted for the cheaper version. The list price remains high but still below OEM creating a big margin for the shop that cares to gamble on junk and a false sense of economy for the customer who paid a bit lower price for what is typically a far inferior part.
The best shops that install top quality parts usually don't have the bogus list prices auto part chains use for their low line house brands.
Also, anybody reading this can buy X part (not OE) on-line from a dozen vendors cheaper than most shops will pay for the same piece. The difference there being the parts store will schlepp it to the shop, often in minutes, wait to be paid and usually pick it up and refund without squawking when the mechanic misdiagnoses, etc.
Fair mark-up? Plenty of other trades apply 2, 3 or more times cost to materials, all the mechanics I know are far, far less than that.
If the job is done correctly with quality bits at a price competitive with local competition you shouldn't be concerned with the owner's parts mark up.
Now for my rant: That ************ fee for "shop supplies"? F U this is called "overhead" and these fees are simply gouging. Often none of these miscellaneous materials, chemicals and whatever they whine about having to pay for are even employed on a given job yet the fee remains. I see invoices for this AND then separate charges for brake cleaner etc. on top. What's next? Lunch for service writer?
Not earning enough money? Raise your labor prices and quite ************ gouging the customer you ought to be grateful to serve. I think dealers started this, don't get me started.........

Shop supplies, and my favorite "Environmental fees" or Waste Disposal fees" all need to go.
Shops I know of are charging for every tie wrap, christmas tree fastener nuts/bolts/washers, gasket cement they use so other then brake clean, power lube and a couple other stray chemicals all those fees can go.
The worst one is from the dealers..........need a OEM cat because someone stole yours guess what the local dealers around here are charging a "core charge" if you don't return the stolen cat. Just last week I sent the Nissan dealer a cat we cut off a f150 that was hollowed out by the owner because he thought it was plugged(turned out to be a bad maf sensor) to get the $450 core charge back.

 

[toolenthusiast]

That's in response to dealing with insurance companies and adjusters............................

Go on…?

 

[sparky 1971]

I have no problem with shops marking parts up whatever %they need to in order to keep the doors open. I'm obviously in a different industry, but my mark up is at least 50% over my price after sales tax. I have wholesale accounts, but many items cost less at Menards where we all pay the same price. There have been a couple of customers that acted like they knew what should be charged. They were charged for a service, no mention of parts on the ticket. Something like Install blocking and wire for ceiling fan. Install ceiling fan, fan furnished by customer. $700.00. They were happy, probably wouldn't have been if they had known what i charged for parts.

 

[2ndGearRubber]

Shop supplies are ********, I agree. Bake it into the labor rate.

Issue being, the business can raise its gross profit artificially by implementing and manipulating shop supplies. Thus, the accounting dept and the middle managers live for shop supplies and other nonsense.