Reasonable Parts Markup?

[kythri]

Hey all.

What do you consider a reasonable parts markup for automotive repair shop-supplied parts?

I took my car in for a tire leak repair (front passenger), and Les Schwab, my usual tire dealer, told me that there was some significant wear, and that I should bring my car in for an alignment.

Dropped it off the following day for the alignment, and got a call a bit later that the front driver's tire was way more worn on the inside than even the passenger was, and that the inner tie rod was shot, just bouncing around in the ball joint.

I've always trusted Schwab's, they've never pulled any "you need these unnecessary repairs" BS on me, and I really didn't want to deal with the repair myself at the moment, so I went ahead and authorized them to fix it and do the alignment afterwards.

Anyhow, it's fixed, all is said and done, but examining the receipt, I see that I was charged $97.15 for the tie rod - a Moog EV455. For what they charged me, I can buy 4 of those things.

I certainly understand some parts markup, so, as a forewarning, I'm not griping about parts being marked up in general. That's the price you pay, literally, for having a shop do the work instead of doing it yourself.

I'm just kind of stunned by the over 400% markup - and, quite frankly, due to that, Schwab's has lost my trust, and I won't be using them ever again for anything other than tires.

So, I'll ask again: What do you consider a reasonable parts markup for automotive repair shop-supplied parts?

 

[djhnsn]

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.

 

[Kaizen]

Zero. I don’t know any shops that stock their own inventory anymore. I can see a markup if they are stocking and maintaining but all I know pick up the phone and a local parts place delivers it in half hour. Vip gave me an estimate for a wheel hub. Vip is inside of an oreillys store. They quoted 50 percent more then what I got it for fifteen feet away. Add the cost for the shop supplies and your really paying much more then their hourly rate


Sent from my iPhone using The Garage Journal mobile app

 

[Fedwrench]

40% have to keep the lights on

It doesn't matter what you can buy the for

The installer backs their work with a warranty.
In this age of knock off parts, who knows what a real part is anyway

 

[theoldwizard1]

I just looked up a Moog EV455 at Oreilly's and it's 68.99+tax.

That's retail. I'll bet the wholesale is at least 25% less.

Rock Auto and Amazon sell it for less than $25.

 

[Parrothead]

Zero.

I bring my own parts, and if that’s not okay I take my business elsewhere. To date that hasn’t been an issue.

The real issue is the dishonesties. If you’re marking up the part due to having to call and get it delivered, fine. But be honest about it and have a line for parts markup ***%.

Everyone has Google, they can look up the part cost while sitting in the lobby. Who exactly are you fooling?

That’s part of the reason people don’t trust shops.

The labor price is a lie
The billable hours are a lie
The parts are a lie
The shop supplies are a lie

Shops need to make money, and even the same amount they’re making now, but they need to fix how they bill the general public and it might change the perception of the auto shop.

 

[Yarpo]

Zero.

I bring my own parts, and if that’s not okay I take my business elsewhere. To date that hasn’t been an issue.

The real issue is the dishonesties. If you’re marking up the part due to having to call and get it delivered, fine. But be honest about it and have a line for parts markup ***%.

Everyone has Google, they can look up the part cost while sitting in the lobby. Who exactly are you fooling?

That’s part of the reason people don’t trust shops.

The labor price is a lie
The billable hours are a lie
The parts are a lie
The shop supplies are a lie

Shops need to make money, and even the same amount they’re making now, but they need to fix how they bill the general public and it might change the perception of the auto shop.

I work in the industry and I agree, markup should be zero or very little. It takes nothing to get the parts. Markup of 50 or 60% to just punch it in on the computer and have it delivered? Obnoxious, in my opinion, and I deal with the **** every day. That said most shops will backup the part (depending on part) with a warranty and will have to eat it should it be bad, so I can see markup for that, but be reasonable.

Not sure what you mean about the labor price or billable hours being lies are tho, Im curious!

 

[BFBOB]

Depends on your point of view. I mark up parts 10%, just a tick over sales tax. I charge for my time and expertise, not the chunks of matter.

 

[Parrothead]

I work in the industry and I agree, markup should be zero or very little. It takes nothing to get the parts. Markup of 50 or 60% to just punch it in on the computer and have it delivered? Obnoxious, in my opinion, and I deal with the **** every day. That said most shops will backup the part (depending on part) with a warranty and will have to eat it should it be bad, so I can see markup for that, but be reasonable.

Not sure what you mean about the labor price or billable hours being lies are tho, Im curious!

I’m speaking from a general perception of the labor rate. People aren’t happy when they’re billed for 2.5 hours and the car is done in 1. They don’t understand book time, etc. The general public has absolutely zero clue where those rates even come from, for all they know they’re an estimate of how long it took you to do the job on the Ford Pinto that was there last week. They just know is they were billed for hours of work that weren’t actually preformed. It creates a trust issue.

 

[kctyphoon]

There is always a markup. Depending on cost of part I’m sure thats also a factor. For the time it takes to pick up the phone, maybe more than once, and find someone that has the part (he feels confident using) and can deliver it. Nothing is free.. something small like that, I wouldn’t be surprised if everyone does 10 - 20%

I was just watching a vid with well know internet power stroke specialist that says he only uses factory parts for some things - cause he’s unwilling to accept the liability of something failing that he installed.

I will agree that the auto repair business is FULL of con artists. That industry has EARNED the reputation they have.

 

[2ndGearRubber]

What you can buy that part for is likely less than what Schwab paid. Amazon and rockauto are usually below platinum discounts at local part suppliers. They probably paid $30 something.


https://www.amazon.com/dp/B000CJ41X6/?tag=atomicindus08-20

$22

https://shop.advanceautoparts.com/p/moog-tie-rod-end-ev455/20516351-P

$59


You got "marked up" approx $40 over what you could have bought it for, same day.

 

[WittHay]

Should be no more than than the walk in 1st time customer price at the local parts store. Some places inflate their list price so it seems everybody gets a discount.

The difference between the shop discount parts cost and the walk in price is probably 40 to 60%. Parts markup has always been done and i dont have a problem with it. The Les Schwab markup is excessive though

 

[ItsNemo]

I’m speaking from a general perception of the labor rate. People aren’t happy when they’re billed for 2.5 hours and the car is done in 1. They don’t understand book time, etc. The general public has absolutely zero clue where those rates even come from, for all they know they’re an estimate of how long it took you to do the job on the Ford Pinto that was there last week. They just know is they were billed for hours of work that weren’t actually preformed. It creates a trust issue.

But what happens if the book time is 2.5 hours and it takes them 5 hours? Should you also get billed for 5 hours? I hate shop rates too but I can see it from their perspective. What I really wonder is how much they're really making on the shop rate...if the mechanic is getting $30/hr and brings their own box, where does the other $100/hr go? Keeping the lights on? I doubt it...

 

[zkdiesel]

Between 25-40% depending on part and cost.
That’s what gets you your warranty on the part in shops eyes.
They might be able to credit for part, but they are still more than likely putting it in for free and eating that. Labor claims on stuff don’t go well a lot of times and more hassle than it’s worth

No customer supplied parts, takes your control of your shop away.

 

[2ndGearRubber]

But what happens if the book time is 2.5 hours and it takes them 5 hours? Should you also get billed for 5 hours? I hate shop rates too but I can see it from their perspective. What I really wonder is how much they're really making on the shop rate...if the mechanic is getting $30/hr and brings their own box, where does the other $100/hr go? Keeping the lights on? I doubt it...

Nobody ever considers the flip side. Or all the time you hemorrhage doing LOFs and "just looking" and test driving.


Frankly it doesn't really matter. The owner desires a certain rate of return, all costs assigned to the consumer reflect this. Our shop spent 25k on racks last year. That's gotta come from 25k of profit.

 

[2ndGearRubber]

Between 25-40% depending on part and cost.
That’s what gets you your warranty on the part in shops eyes.
They might be able to credit for part, but they are still more than likely putting it in for free and eating that. Labor claims on stuff don’t go well a lot of times and more hassle than it’s worth

No customer supplied parts, takes your control of your shop away.

#1 rule.


Not worth the hassles and pain.

 

[Azzkker]

I own and operate an auto repair facility. Mark up is a requirement to turn a profit. 40% is the minimum margin for the whole job, parts, labor to barely turn a profit.

Out of that base "profit" all the expenses come out like power, water, phones, internet, garbage, programs like all data, the shop management software, accountant, legal fees, licensing fees, garage keepers insurance, property insurance and computers to run all the software on. My minimum overhead each month is around 10,000 a month minimum. Then out of that labor, you have to pay the technician 20 + dollars per flat rate hour, so with all the workman's comp and unemployment insurance that is federally required, it's more like 23 bucks and hour.

If you bring your own parts, it puts that job to a less than break even or best case break even after everything is payed. Don't know about you guys but I don't like a payout of over a million dollars on tools, scanners, factory software setups, specialty tools every vehicle seems to require now, lifts and a building to operate out of to only clear $40 g a year when my techs can takes home 50 plus pretty easy with none of the worries. That parts markup really is the difference between making a comfortable living and barely paying the bills.

Here is another way of putting it, when you go to the grocery store, you dont walk up to the cashier and tell them "I'm only going to give you $5.00 for that $20.00 steak". The cashier wouldn't go for that and you would look crazy to everyone waiting in line.

The above is the exact same as bitching about parts markup and labor rates, or bringing your own parts.
The better the margins, the more I can invest back into better equipment and more and better training for my technicians.

 

[Skin]

Ideally a shop would try to maintain a part cost equivalent to the list price of the place they bought it. In reality this can be difficult. Places like Advance Auto treat small independents like garbage and generally only offer a trade discount of 10-15% unless you're doing massive volume. To fully cover overhead and turn a profit you simply cant do it on those margins.

You can always question it of course. There was a recent thread on here of someone who went to the BMW dealership for rotors and got white box parts since the originals were on back order and the dealer tried to charge BMW prices. He pointed it out and they discounted it to list on the aftermarket parts.

Bear in mind no business is a charity. Most will get as much money as they can and I find it hard to fault them. Its expensive to run a small business between what goes into overhead and is eaten by the tax man.

I'd be more concerned with a place doing quality work than I would with what they charged me for a specific part number.

 

[kctyphoon]

Almost $60 w/o tax at advance..
$40 from MOOG

Everywhere on the internet, looks to be under $30

Don’t know when Home Depot starting selling car parts - but its $22 at Home Depot?? Lol

 

[zkdiesel]

I own and operate an auto repair facility. Mark up is a requirement to turn a profit. 40% is the minimum margin for the whole job, parts, labor to barely turn a profit.

Out of that base "profit" all the expenses come out like power, water, phones, internet, garbage, programs like all data, the shop management software, accountant, legal fees, licensing fees, garage keepers insurance, property insurance and computers to run all the software on. My minimum overhead each month is around 10,000 a month minimum. Then out of that labor, you have to pay the technician 20 + dollars per flat rate hour, so with all the workman's comp and unemployment insurance that is federally required, it's more like 23 bucks and hour.

If you bring your own parts, it puts that job to a less than break even or best case break even after everything is payed. Don't know about you guys but I don't like a payout of over a million dollars on tools, scanners, factory software setups, specialty tools every vehicle seems to require now, lifts and a building to operate out of to only clear $40 g a year when my techs can takes home 50 plus pretty easy with none of the worries. That parts markup really is the difference between making a comfortable living and barely paying the bills.

Here is another way of putting it, when you go to the grocery store, you dont walk up to the cashier and tell them "I'm only going to give you $5.00 for that $20.00 steak". The cashier wouldn't go for that and you would look crazy to everyone waiting in line.

The above is the exact same as bitching about parts markup and labor rates, or bringing your own parts.
The better the margins, the more I can invest back into better equipment and more and better training for my technicians.

Exactly! I bring home more than 150k as a tech. If we have a rough year the boss brings home less than I do, so why risk it at that point! Your in business to make money

 

[Parrothead]

But what happens if the book time is 2.5 hours and it takes them 5 hours? Should you also get billed for 5 hours? I hate shop rates too but I can see it from their perspective. What I really wonder is how much they're really making on the shop rate...if the mechanic is getting $30/hr and brings their own box, where does the other $100/hr go? Keeping the lights on? I doubt it...

If it books at 2.5 and it takes them 5, the customer thinks the mechanic is incompetent. It’s honesty that simple.

*I've been billed when it takes longer.

I think shops/mechanics give WAY to much credit to the general public on how auto shops work. Heck, I didn’t really know all the gory details until I joined GJ. The general public is clueless and more importantly doesn’t care beyond their own financial outlay.

 

[rustbucket5]

if you have any clue about how a business works you understand labour rates and markup. like do you think lifts are free? scanners dont cost over 10k? alignment machines dont cost upwards of 20-30k??? and guess what? all that stuff needs to be replaced eventually!! would you like the shop to charge you the cost of the lift because your car needs to go up in the air? or would you like to pay a small portion of all that equipment and cost? people that claim shops are scam artists have got no clue what actually happens in the real world.

 

[ItsNemo]

I own and operate an auto repair facility. Mark up is a requirement to turn a profit. 40% is the minimum margin for the whole job, parts, labor to barely turn a profit.

Out of that base "profit" all the expenses come out like power, water, phones, internet, garbage, programs like all data, the shop management software, accountant, legal fees, licensing fees, garage keepers insurance, property insurance and computers to run all the software on. My minimum overhead each month is around 10,000 a month minimum. Then out of that labor, you have to pay the technician 20 + dollars per flat rate hour, so with all the workman's comp and unemployment insurance that is federally required, it's more like 23 bucks and hour.

If you bring your own parts, it puts that job to a less than break even or best case break even after everything is payed. Don't know about you guys but I don't like a payout of over a million dollars on tools, scanners, factory software setups, specialty tools every vehicle seems to require now, lifts and a building to operate out of to only clear $40 g a year when my techs can takes home 50 plus pretty easy with none of the worries. That parts markup really is the difference between making a comfortable living and barely paying the bills.

Here is another way of putting it, when you go to the grocery store, you dont walk up to the cashier and tell them "I'm only going to give you $5.00 for that $20.00 steak". The cashier wouldn't go for that and you would look crazy to everyone waiting in line.

The above is the exact same as bitching about parts markup and labor rates, or bringing your own parts.
The better the margins, the more I can invest back into better equipment and more and better training for my technicians.

Sounds like you need to cut out some overhead and consider your actual ROI when spending money on fancy lifts and equipment.

 

[Parrothead]

if you have any clue about how a business works you understand labour rates and markup. like do you think lifts are free? scanners dont cost over 10k? alignment machines dont cost upwards of 20-30k??? and guess what? all that stuff needs to be replaced eventually!! would you like the shop to charge you the cost of the lift because your car needs to go up in the air? or would you like to pay a small portion of all that equipment and cost? people that claim shops are scam artists have got no clue what actually happens in the real world.

I think this is directed at me, so I’ll clear some things up. Go back and read my original response. It’s not about what you charge, or the amount, it’s about the deceitful practices of billing or the perception thereof that invokes derogatory terms. Just be up front about the costs and say the markup is $x.** dollars or X%. People in general don’t know how a business works and most certainly not an auto shop.

 

[The Cobbler]

Many years ago I was in auto parts . one of our customers doubled what their cost was for parts. based on I saw them billing one invoice .
They were an extremely busy, respected shop .
thing that got me, we worked on a 10% markup on our cost, we had to carry their account for 30 days, deliver the parts etc etc.
they got paid from the customer before the car left the shop , and had the labour portion too.
but, we didn't have the same overhead as the them in reality

 

[rustbucket5]

I think this is directed at me, so I’ll clear some things up. Go back and read my original response. It’s not about what you charge, or the amount, it’s about the deceitful practices of billing or the perception thereof that invokes derogatory terms. Just be up front about the costs and say the markup is $x.** dollars or X%. People in general don’t know how a business works and most certainly not an auto shop.

why would it matter? the price is the price? we arent holding a gun to anyones head. its not deceitful at all, tell me another business that does that. your using that as an excuse to hate on shops when in fact no business discloses that. some have lower mark ups due to high purchase cost or sudden changes (ie tariffs, lead going up for example in batteries) and some have higher to offset the loss you take on other items. heres a really good summary for anyone reading the average overall profit margin for a shop (depending on your total sales) is 1.5-3%. so if you think shops are just raking in cash and raking you over the coals your dead wrong

 

[kctyphoon]

I own and operate an auto repair facility. Mark up is a requirement to turn a profit. 40% is the minimum margin for the whole job, parts, labor to barely turn a profit.

Out of that base "profit" all the expenses come out like power, water, phones, internet, garbage, programs like all data, the shop management software, accountant, legal fees, licensing fees, garage keepers insurance, property insurance and computers to run all the software on. My minimum overhead each month is around 10,000 a month minimum. Then out of that labor, you have to pay the technician 20 + dollars per flat rate hour, so with all the workman's comp and unemployment insurance that is federally required, it's more like 23 bucks and hour.

If you bring your own parts, it puts that job to a less than break even or best case break even after everything is payed. Don't know about you guys but I don't like a payout of over a million dollars on tools, scanners, factory software setups, specialty tools every vehicle seems to require now, lifts and a building to operate out of to only clear $40 g a year when my techs can takes home 50 plus pretty easy with none of the worries. That parts markup really is the difference between making a comfortable living and barely paying the bills.

Here is another way of putting it, when you go to the grocery store, you dont walk up to the cashier and tell them "I'm only going to give you $5.00 for that $20.00 steak". The cashier wouldn't go for that and you would look crazy to everyone waiting in line.

The above is the exact same as bitching about parts markup and labor rates, or bringing your own parts.
The better the margins, the more I can invest back into better equipment and more and better training for my technicians.

Yea - I’d hate to tell you but your analogy isn’t exactly accurate..Your taking his experience personally. When i walk into a store the prices are labeled and i know what I’m expected to pay BEFORE i enter into a consensual agreement to trade the fruits of my own labor (money) for product (steak). That knowledge gives me the ability to accept or decline the transaction AFTER i access that its a fair price, and BEFORE i agree to do anything. I can then choose to continue with my purchase, or leave - having decided if i think everything seems fair - like a 100% - 400% markup on some steak.

What’s happening here - is THEY bought a steak at retail cost, and might have doubled the price of it - WITHOUT him knowing “hey, this is gonna be one expensive piece of meat”. His issue ISNT so much the cost of the part, its the fact he feels he was blindsided and his receipt probably doesn’t show “their cost” + X% = his cost.

The case can be made its his fault for agreeing with out getting an estimate on both parts plus labor, and the case can be made they should have made sure he knew what the cost was gonna be before just going ahead with the work without giving him a price first. (assuming this didn’t happen).

The WORST part of the auto repair business is the lottery game thats played - and the FACT that many places seek to cover their lack of profits by ****** the jobs that do come in.. i could on with stories of my own - but the fact is like i said - this business EARNED the reputation it has. I have found the majority of places are guilty of this - which ***** for the few that might not deserve to be caught in it. Hence the reason why most of the people that suffer through working on their own cars - do.

If you swapped your phone service, and my company charged you an “installation fee” that would normally cover all new service wires from outside plant to inside your home - but the tech just went out and unplugged one wire, plugged in another - making use of all the old **** that was already there - and said “hey buddy, thats life” - I’m sure you wouldn’t be arguing “the business needs to profit”

 

[Yarpo]

If it books at 2.5 and it takes them 5, the customer thinks the mechanic is incompetent. It’s honesty that simple.

*I've been billed when it takes longer.

I think shops/mechanics give WAY to much credit to the general public on how auto shops work. Heck, I didn’t really know all the gory details until I joined GJ. The general public is clueless and more importantly doesn’t care beyond their own financial outlay.

I'm pretty sure they cannot bill you more because it took longer after calling and giving you a price. For example we quote 1 hour diag time, we dont continue to diag for 3 hours and then surprise the customer. That sounds illegal and obviously scummy. I'm not a lawyer tho, but I'd have declined the bill. If a job pays 3 hours and it takes me 4, I lose, simple as that.

As for where the extra money goes, the other guys touched on that, dont forget they also need their 100k cars and toys too

 

[Yarpo]

Yea - I’d hate to tell you but your analogy isn’t exactly accurate..Your taking his experience personally. When i walk into a store the prices are labeled and i know what I’m expected to pay BEFORE i enter into a consensual agreement to trade the fruits of my own labor (money) for product (steak). That knowledge gives me the ability to accept or decline the transaction AFTER i access that its a fair price, and BEFORE i agree to do anything.

The WORST part of the auto repair business is the lottery game thats played - and the FACT that many places seek to cover their lack of profits by ****** the jobs that do come in.. i could on with stories of my own - but the fact is like i said - this business EARNED the reputation it has. I have found the majority of places are guilty of this - which ***** for the few that might not deserve to be caught in it. Hence the reason why most of the people that suffer through working on their own cars - do.

Price lottery...where the **** do you guys go for work?

 

[chipjumper]

Some of you don’t get how business works. Auto shops aren’t in the charity business. Neither is any for-profit business. When’s the last time you goofballs whined about the markup of a found drink? $2.79 for a large soda? It only costs the business $0.08. How DARE they mark it up 35 times!!!
Next time you go out to a nice steakhouse bring some cuts of meat and a head of lettuce and see if they’ll prepare it for you.

 

[kctyphoon]

Some of you don’t get how business works. Auto shops aren’t in the charity business. Neither is any for-profit business. When’s the last time you goofballs whined about the markup of a found drink? $2.79 for a large soda? It only costs the business $0.08. How DARE they mark it up 35 times!!!
Next time you go out to a nice steakhouse bring some cuts of meat and a head of lettuce and see if they’ll prepare it for you.

Yea - lets make something clear guy - THATS NOT MARKUP. That’s the retail price for going to a restaurant and them preparing your meal and serving you. Thats what the LABOR charge is in an auto shop. For the LABOR installing the parts. Markup would be the guy in McDonald’s behind the counter doubling the RETAIL price of your large soda Cause you used the register where he hit the buttons, instead of going to Kiosk and ordering yourself.

While i agree - the time they spend ordering said parts is billable - theres a limit to what you can reasonably bill people before it looks like a money grab. Some places may include that as labor - and still markup the parts they order.

If you insist on using a food analogy it would be this. Pizza place charges $10 for a pie. You order through an app for a delivery service that costs $5. When the guys shows up to your door - they tell you its a $20 charge - cause they added a $5 MARKUP to the pie they BOUGHT from someone else, and added nothing to... $5 labor charge, $5 MARKUP on the $10 product THEY BOUGHT.

 

[kctyphoon]

Price lottery...where the **** do you guys go for work?

Places that try to tell me nobody makes rebuilt injectors for a 7.3 power stroke - so it’ll be $5000 for injectors + labor, meanwhile its a bad turbo causing the smoke. (4 week wait for that ******** just to go down there and almost kill someone. $100 tow to go to another shop - as the ONLY reason I didn’t mess with the truck myself was cause it was my daily and didn’t wanna waste time)

Places that when I supply a $700 turbo, they try to charge almost $3000 to install it, (4 bolts and 2 hose clamps) and replace 18” of brake line.. (after an “it wont be bad if you supply the parts”)

I got a message from a guy years ago that read about a post a made on a different forum about the first place( owner featured in mustang magazine) he gave the guy $40,000 to build his mustang, and got the car back in pieces over a year later after dropping off a pristine car. Engine and trans out, front clip, doors, hatch, windshield removed, other parts missing. Car was sent to a body shop after months, for paint. First place fucked the body shop over, never paid anything after work started - and the poor owner got his dream car back as a pile of fucked up parts, with NO OTHER work done. Not even a built engine. NOTHING.

Glow plugs on 95 7.3, $500 job - got the truck back and replaced a $40 relay myself to fix the problem the truck went in for..

This is why people give up and buy their own tools. Cause some places either struggle with business and need to make as much as possible off unsuspecting customers, try to cover for ordering parts that didn’t fix problems, or are so far in debt because of their own financial ineptitude coupled with tool truck debt, so everyone else pays the price. Some people don’t know any better to call these people out, some do. But when everyone starts chasing the Business owner for money - who do YOU think he’s gonna try to pass his debts off on??

Oh - how bout this one - “do you want a 2 wheel alignment or 4 wheel” 2 wheel.. (5 min later) “sir, your car requires a 4 wheel alignment” ok, what are you gonna adjust on the back wheels with no adjustments? “Oh lemme go check again.... leaves, renters ..... 2 wheel should do it”..

How many people get their cars back from an alignment with a crooked steering wheel??

Guy i work with just got 4 new tires from Mavis - went back 4 times for a shake in the car - shop replaced the 4 new tires with different ones - sent him on his way “fixed” - with tires that cost $100 less than the ones he paid for.. acceptable?

Let’s not pretend this is an honest industry..

My mother brings her honda in - get an estimate which includes an insane price to replace a relay. I do that part for her (DLR relay if I remember) - she goes back, says my son already did this for me -then the place tries telling her theres 2..
Think it was a $90 labor estimate to replace her in cabin filter too - (we have to take the dashboard apart) - for dropping the glove box door.. yea - i took that score away from them too. give me a ****** break dude.

How many lube places do the upsell of brake system flush/ coolant flush - and aside from LYING about needing it in the first place - don’t even do it and still charge people?

“Sir, you could use new wipers” - dude, they’re 2 weeks old..
“Would you like us to check your air filter?” - NO

 

[jkesselr]

I own and operate an auto repair facility. Mark up is a requirement to turn a profit. 40% is the minimum margin for the whole job, parts, labor to barely turn a profit.

Out of that base "profit" all the expenses come out like power, water, phones, internet, garbage, programs like all data, the shop management software, accountant, legal fees, licensing fees, garage keepers insurance, property insurance and computers to run all the software on. My minimum overhead each month is around 10,000 a month minimum. Then out of that labor, you have to pay the technician 20 + dollars per flat rate hour, so with all the workman's comp and unemployment insurance that is federally required, it's more like 23 bucks and hour.

If you bring your own parts, it puts that job to a less than break even or best case break even after everything is payed. Don't know about you guys but I don't like a payout of over a million dollars on tools, scanners, factory software setups, specialty tools every vehicle seems to require now, lifts and a building to operate out of to only clear $40 g a year when my techs can takes home 50 plus pretty easy with none of the worries. That parts markup really is the difference between making a comfortable living and barely paying the bills.

Here is another way of putting it, when you go to the grocery store, you dont walk up to the cashier and tell them "I'm only going to give you $5.00 for that $20.00 steak". The cashier wouldn't go for that and you would look crazy to everyone waiting in line.

The above is the exact same as bitching about parts markup and labor rates, or bringing your own parts.
The better the margins, the more I can invest back into better equipment and more and better training for my technicians.

I am trying to figure out the math on this one... how can 40% margin be barely enough to turn a profit. If you are paying your guys $23 per hour and charging what? Close to $100 per hour plus or minus, that is a 400% markup on labor. If you are making margin on parts too, how are you only clearing 40% on the job!?! By definition, margin on the job should include an incremental cost for usage of shop equipment prorated out over its entire life. I’ve worked in the business and understand the shop’s challenges, but to suggest that making 4 times the cost of labor and another 50% or so on parts isn’t enough to keep the lights on is disingenuous. I posit that there is something else at issue.

As to OP’s original point, Schwab is a bunch of ******* cheats. I wouldn’t take my lawnmower to them.

 

[Azzkker]

Yea - lets make something clear guy - THATS NOT MARKUP. That’s the retail price for going to a restaurant and them preparing your meal and serving you. Thats what the LABOR charge is in an auto shop. For the LABOR installing the parts. Markup would be the guy in McDonald’s behind the counter doubling the RETAIL price of your large soda Cause you used the register where he hit the buttons, instead of going to Kiosk and ordering yourself.

While i agree - the time they spend ordering said parts is billable - theres a limit to what you can reasonably bill people before it looks like a money grab. Some places may include that as labor - and still markup the parts they order.

If you insist on using a food analogy it would be this. Pizza place charges $10 for a pie. You order through an app for a delivery service that costs $5. When the guys shows up to your door - they tell you its a $20 charge - cause they added a $5 MARKUP to the pie they BOUGHT from someone else, and added nothing to... $5 labor charge, $5 MARKUP on the $10 product THEY BOUGHT.

All work at my shop is based off of flat rate times, and a tier market up % that goes down as price goes up. All prices are clearly marked and the estimate is gone over with customer prior to work starting. No surprises that way.

Also, name one industry which tells the customer the markup on anything automatically up front. My parts markup is part of a business plan, same as those pesky insurance rate increases you get for absolutely no reason every renewal. Insurance raises rates to cover cost of claims across a vehicle model to keep a set profit margin. Food analogy again, you would not bring your own food to a restaurant and ask for cheaper service because you brought your own "parts" for the chef to cook.

It's easy for everyone not in the know to say oh don't buy so much equipment, or buy cheaper lifts, or only buy a cheap autel piece of **** scanner that works for a year then needs repaired. But cheap lifts like bendpak will not last in a professional shop environment, I know as my home shop I worked out of for years before opening up my current location is worn out and leaking at the lift cylinder seals from night and weekend use over a 5 year period. Plus it must be Ali certified or you can kiss your insurance liability coverage goodbye if your affordable Greg Smith lift fails with a truck on it. A person wouldn't leave their vehicle at a shop with run down equipment so that argument is moot.

My last scanner purchase was a snap on verus edge workstation and that was 12,000 for one that does euro. Not cheap. Yearly updates are 1200. Keeping equipment up to date is required, or the shop will be left behind. Anytime a customer has to be refered due to lack of equipment, there is a good chance the place they go for repair will be the place they go from that point forward because why go back to the place who couldn't fix it last time?

None the less, if every shop operated they way some have suggested in this thread, most would go out of business in a couple years and what good would that type of system do? It would force you back the your favorite place, the dealer service department for all the repairs once the independent repair facilities all go bankrupt.

That being said, not all shops are honest, so the few bad apples make a terrible name for those of us that are. A good shop owner constantly reinvests a good chunk of the profits every year for the benefit of the customers they service and the safety of the employees. It's a constantly evolving industry, just like the technology industry.

 

[Azzkker]

I am trying to figure out the math on this one... how can 40% margin be barely enough to turn a profit. If you are paying your guys $23 per hour and charging what? Close to $100 per hour plus or minus, that is a 400% markup on labor. If you are making margin on parts too, how are you only clearing 40% on the job!?! By definition, margin on the job should include an incremental cost for usage of shop equipment prorated out over its entire life. I’ve worked in the business and understand the shop’s challenges, but to suggest that making 4 times the cost of labor and another 50% or so on parts isn’t enough to keep the lights on is disingenuous. I posit that there is something else at issue.

As to OP’s original point, Schwab is a bunch of ******* cheats. I wouldn’t take my lawnmower to them.

Do you operate a business?

 

[paulsomlo]

Last time I had someone else work on a vehicle, I was in NJ, clearing out my mother's estate. I was about to drive her Civic back to Colorado, when I started having alternator problems. Didn't have tools and needed to get on the road, took it to a shop. They charged $290 parts cost for the alternator. Eight months later, the bearings on it started growling. It had a Napa sticker on it, got a free replacement. Curious, I looked up the PN online - $140.

 

[ddawg16]

I'm not sure if this topic or PVC airlines is more volital.

My dad was a mechanic (had a BA degree from Univ of FL...and his private pilots lic)...had his own station (I was pumping gas at the age of 5)

Ok....so you want to supply your own part. Hey, no problem. If it fails....well, he will remove it...charge you labor....you can take it back for warranty replacement...and he will charge you again to install the new part. Your choice.

If my dad supplied the part....he warrantied it. Hence, he wanted to make sure he didn't have to do the job again. So he bought a quality part. Yeah, you might find a cheaper part...but we are back to the warranty issue..

I learned this the hard way 30 years ago. Alt on my car. OEM was making noise so I was proactive and replaced it with an AutoZone rebuilt part. Wife (now x-*****) and her family took it to Vegas...it failed....shop replaced it....$300. Guy said a rebuilt was not available, so it had to be new. I told him I wanted the failed one. (He didn't supply it) 2 Months later it failed again. I looked at it....it was a Pep Boy Rebuilt alt....

I had to go to Vegas a short time later for another reason. I took the failed one with me and went to his business and confronted him....I parked my *** in front of his business until he gave me $100 and a core.

I will never use a rebuilt item from AutoZone or Pep Boys.

You learn real quick that in many cases the cost of an item is small compared to the labor. If I'm not doing the work, I have no issue with the person doing it marking up the item...within reason. 40%-100% is reasonable on low cost parts. High dollar items? 25%.

If I'm going the work.....I take my chances. If it's a lot of work...I'll pay for a good quality item.

 

[IPFreely]

Is it possible to charge more up front for labor? I dont mind paying more money up front if the job is done correctly. But when the part is marked up more than 20%, I feel like I was ripped off.

 

[neophyte]

A markup if double the parts cost delivered would probably be reasonable,
But the exact markup really needs to vary with the type of part, and how easy it is to screw up the part if something goes erong, as well as how much bull*^?! Goes into making sure the part specs are correct, aas well as minimum quantities if a part has to be bought in quantity.
Bearings and o rings, for instance, can be purchased relatively cheaply, but while sizing might be standard, there are other considerations, like sealed or shielded, seal type, grease type, material, Abec standard, etc., and the same goes for o rings and seals.
Seals can get nicked or damaged during instalation, so only charging double might not really cover the cost if something goes wrong.
More expensive parts though should be able to be installed without ******* the part up.
100% though would cover a fuckup so at least the part cost forsn’t come out of the garage’s pocket.

As has been pointed out though, parts and industrial suppliers usually charge more than Amazon, because the parts places can and will deliver the parts to the mechanic fixing the car.
If a garage has to hire someone to drive to the oarts store, the garage then has to roll that persons salary and expenses into the repair cost, so repair costs would go up, even if the part cost went down.
Parts delivery by the parts supplier means the delivery guy’s salary gets split over multiple shops, so if a shop is slow, there’s less overhead.

 

[Super Mech]

I own and operate an auto repair facility. Mark up is a requirement to turn a profit. 40% is the minimum margin for the whole job, parts, labor to barely turn a profit.

Out of that base "profit" all the expenses come out like power, water, phones, internet, garbage, programs like all data, the shop management software, accountant, legal fees, licensing fees, garage keepers insurance, property insurance and computers to run all the software on. My minimum overhead each month is around 10,000 a month minimum. Then out of that labor, you have to pay the technician 20 + dollars per flat rate hour, so with all the workman's comp and unemployment insurance that is federally required, it's more like 23 bucks and hour.

If you bring your own parts, it puts that job to a less than break even or best case break even after everything is payed. Don't know about you guys but I don't like a payout of over a million dollars on tools, scanners, factory software setups, specialty tools every vehicle seems to require now, lifts and a building to operate out of to only clear $40 g a year when my techs can takes home 50 plus pretty easy with none of the worries. That parts markup really is the difference between making a comfortable living and barely paying the bills.

Here is another way of putting it, when you go to the grocery store, you dont walk up to the cashier and tell them "I'm only going to give you $5.00 for that $20.00 steak". The cashier wouldn't go for that and you would look crazy to everyone waiting in line.

The above is the exact same as bitching about parts markup and labor rates, or bringing your own parts.
The better the margins, the more I can invest back into better equipment and more and better training for my technicians.

This exactly! I too own a repair shop and have for over 20 years. Mark ups are between 50 and 100 percent. Labor is most times always more than what the book says due to being in the northeast and having to deal with rust and corrosion. My torches are used multiple times a day.
I have a huge sign I’m my shop “if you want to shop on the internet, get your car fixed on the internet” also no customer supplied parts.
If they don’t like it please go somewhere else I’m too busy for customers like that.
Most but not all people on this forum have absolutely now idea what it takes to run a well equipped repair shop. I constantly refuse jobs from tire kickers looking to bargain and/or bring their own parts and I’m still in business and making money.
I ask them, “do you bring your own food to a restaurant and ask them to cook it because you can get it cheaper?” The answer is either a dumbfounded look or a no. I then politely ask them to leave.