Reasonable Parts Markup?

[Nick Danger]

The final bill on repair job is going to be the same whether the parts and shop supplies are itemized or not. It sounds like some people are unhappy when they see the prices on the individual parts. Maybe they'd be happier if the bill just showed the final cost, like a restaurant menu that says "Prime Rib Dinner $29.95".

"Trouble shoot and repair failure to start. Replaced fuel injectors. $375.15".

 

[Super Mech]

The final bill on repair job is going to be the same whether the parts and shop supplies are itemized or not. It sounds like some people are unhappy when they see the prices on the individual parts. Maybe they'd be happier if the bill just showed the final cost, like a restaurant menu that says "Prime Rib Dinner $29.95".

"Trouble shoot and repair failure to start. Replaced fuel injectors. $375.15".

Menu pricing. Sometimes I wish I could bill every job this way.

 

[Parrothead]

I'm pretty sure they cannot bill you more because it took longer after calling and giving you a price....If a job pays 3 hours and it takes me 4, I lose, simple as that.

I’m pretty sure I’ve still got the bill for the added time as it happened less than 6 months ago. It even shows the price adjustment.

Was it scummy? Yep, but it happened. It’s no worse than having a car towed to a shop and having them tell the tow truck driver it’s a $45 a day lot charge since I didn’t have an appointment. I had it towed somewhere else immediately.

If you’re in Indy, PM me as I’ll happily tell you both places.

 

[zkdiesel]

I’m pretty sure I’ve still got the bill for the added time as it happened less than 6 months ago. It even shows the price adjustment.

Was it scummy? Yep, but it happened. It’s no worse than having a car towed to a shop and having them tell the tow truck driver it’s a $45 a day lot charge since I didn’t have an appointment. I had it towed somewhere else immediately.

If you’re in Indy, PM me as I’ll happily tell you both places.

Your the common theme in all your stories. Makes me want to believe your the “bad customer”

 

[Parrothead]

Your the common theme in all your stories. Makes me want to believe your the “bad customer”

Um, no. Actually both shops really like us as customers. A lot.

I don’t feel the need to defend myself as a customer, but I assure you not only am I not a bad customer, I’m a very good customer. Both places actively want our business.

 

[zkdiesel]

Um, no. Actually both shops really like us as customers. A lot.

I don’t feel the need to defend myself as a customer, but I assure you not only am I not a bad customer, I’m a very good customer. Both places actively want our business.

No real shop wants your business if you demand you bring your own parts.

 

[chipjumper]

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.

Thank you for being brutally honest with the angry crowd. A lot of people have no clue how much just the utility bill is for a BUSINESS. They compare their ultra-discounted consumer utility bill and don’t realize that the business owner gets bent over. They have no clue what business insurance costs, what capital equipment and upkeep costs, city taxes, blah blah. They want you to charge a fixed “markup”. Hey if they want fixed prices they can go to Cuba and see how it works over there. I used to live in the Middle East and it was illegal to work on your car. You paid what the bill said or you’re SOL.

 

[Parrothead]

No real shop wants your business if you demand you bring your own parts.

Since there’s no real way to convey this over the internet, we’ll just agree to disagree. There’s no warranty on my supplied parts, and one shop even looks up the Amazon prices for me and “I can order it or you can”. No markup.

Additionally, I don’t order the **** parts from Napa or Autozone. I’m not looking for cheap, I’m looking for better. I only run Akebono Performance Pads and Centric Cryogenically treated rotors as an example. My struts are usually KYB AGX or Tein. No, I don’t want your Gabriel or Duralast supplied by most shops.

Here’s one for you, the shop that charges $45 dollars for lot fees? Prior to that I bough the whole place pizzas and drinks because they put my business cards in their lobby with theirs right on the front desk. Ya, terrible customer. Bad customer? Laughable really.

 

[Parrothead]

...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.

See Above ^^^ Post 6

 

[alexb2000]

Many people do things that they think will help them avoid getting screwed. Some supply their own parts. Some go down to the shop for a cup of coffee and a long talk with the mechanic. Others want enough information to do the repair themselves in order to feel comfortable. Others want to compare Google prices on everything and have each repair analyzed ie. Just Brakes said they will do all four wheels with pads, rotors, etc all for $99 why are you so expensive?

The customer every shop actually wants....

Car left out front and with keys and a note about what's wrong in the dropbox. Fix it right, do what you think is best, here is my CC.

All of the time, talking, debating, negotiating, etc. takes away from actual repairs AND it will have to be factored into the labor rate.

My goal has always been to be worthy of the later and to eliminate all the former.

 

[Batscat]

Welcome to the real word. Nothing has changed or will change.
Only thing that has changed is you becoming aware of what everyone else older then you already know.

 

[2ndGearRubber]

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

Lifts are considered "fancy" equipment now? Much of the cost for rack is labor to install. A shop is going to have a tough time getting an insurance policy if goober installed the lift. You need to pay certified installers, electricians to run the electrical, etc.


Now if the shop is big enough to declare themselves self insured, that's a different story.

 

[2ndGearRubber]

Many people do things that they think will help them avoid getting screwed. Some supply their own parts. Some go down to the shop for a cup of coffee and a long talk with the mechanic. Others want enough information to do the repair themselves in order to feel comfortable. Others want to compare Google prices on everything and have each repair analyzed ie. Just Brakes said they will do all four wheels with pads, rotors, etc all for $99 why are you so expensive?

The customer every shop actually wants....

Car left out front and with keys and a note about what's wrong in the dropbox. Fix it right, do what you think is best, here is my CC.

All of the time, talking, debating, negotiating, etc. takes away from actual repairs AND it will have to be factored into the labor rate.

My goal has always been to be worthy of the later and to eliminate all the former.

Bingo. If cars aren't being repaired, youre losing every second. Waiting for parts from rockauto, just "looking it over", negotiating with suppliers to try to shave 10 bucks off a $150 part - it's just not worth it. Any second the wrenches aren't turning, you're losing money.


Our shop, who employees me as the only actually competant person, has a $3000 payroll liability every week. 3k in profit must be made. While paying taxes, an accountant, all the utilities, etc. Its a profit game, believe it or not.

Our shop, primarily at my direction, has begun firing customers. Maybe 25 need to go? Want everything looked at for free, buy nothing or want us to half *** some abortion of a "repair" together. Slowly but surely they're being driven out. Our total revenue hasn't changed, because it actually cost us money to have them come here.

 

[Cgw1984]

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.

Your time and expertise with what? Clicking the speed dial button to napa, and then adding it to account? Diagnostics is a separate charge, or do you double dip with all that?

I bring my own parts, if i need something done. If thats not allowed, then i go elsewhere (of course i dont expect parts or labor warranty from the mechanic, unless labor is done incorrectly)

 

[Cgw1984]

Many people do things that they think will help them avoid getting screwed. Some supply their own parts. Some go down to the shop for a cup of coffee and a long talk with the mechanic. Others want enough information to do the repair themselves in order to feel comfortable. Others want to compare Google prices on everything and have each repair analyzed ie. Just Brakes said they will do all four wheels with pads, rotors, etc all for $99 why are you so expensive?

The customer every shop actually wants....

Car left out front and with keys and a note about what's wrong in the dropbox. Fix it right, do what you think is best, here is my CC.

All of the time, talking, debating, negotiating, etc. takes away from actual repairs AND it will have to be factored into the labor rate.

My goal has always been to be worthy of the later and to eliminate all the former.

Ya thats true. Most shops would love someone so willing to be fleeced. Good shops wont take advantage. Some of the shops bragged about in this very thread.. well, they would.

 

[jacked_72]

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.

The shop got it for less than $59. That's the retail price. Shops will get a discount from the local store.

 

[2ndGearRubber]

The shop got it for less than $59. That's the retail price. Shops will get a discount from the local store.

Correct.


But the markup relative to the customer starts at 59 bucks, what they could procure it for.

Its irrelevant if Schwab paid 59 or 5.90 for the tie rod. Mark up relative to the customer begins at 59.01. Any markup below that is invisible to the consumer.

 

[Elsinore13]

As a collision repair shop, no way in hell could we get by on labor only. In the year 2020, we are still fighting to get a measley $68.00 per hour shop rate.

What irks me about the local auto parts stores is that none of them have a set list price that they bill from. They will sell most items to people walking in off the street for the same price as they will professional repair shops. OEM parts from dealers are sold to me at x percentage off of list. No insurance company will pay more than list price so we are fighting the dealers for as deep of a discount as we can get. Without parts sales, there really is no point in being in the collision repair game. You have to maintain a balance.

I know some dealerships as well as local franchise/chain shops who have had consultants come in and help decide what percentages for parts margins should be and also labor rates to arrive at x profits. It's funny how people think certain trades or professions should make big money and how others should just barely "get by". Shops that gouge and rip peoples heads off will always get what's coming to them, but no way in hell am I going to knock someone for making a solid 35-40% profit on parts. By the way, 50% markup only equals 33 1/3% for those who still don't understand.

I just paid a local engineering firm what I consider crazy money for some surveys and drawings so I can make a 25' x 50'carport addition to the front of my business. Gotta meet all codes and windloads...so it is what it is.

Getting tile put in my house, costing $10.00 per sq. ft. installed. Can't understand it, I can buy tile at Lowe's for 95 cent a sq. ft??? LMAO

 

[Shane6377]

Thank you for being brutally honest with the angry crowd. A lot of people have no clue how much just the utility bill is for a BUSINESS. They compare their ultra-discounted consumer utility bill and don’t realize that the business owner gets bent over. They have no clue what business insurance costs, what capital equipment and upkeep costs, city taxes, blah blah. They want you to charge a fixed “markup”. Hey if they want fixed prices they can go to Cuba and see how it works over there. I used to live in the Middle East and it was illegal to work on your car. You paid what the bill said or you’re SOL.

... but some of us do know the cost of doing business. That's what makes the prices so frustrating. Many, but not all, shops are poorly managed by great mechanics who are poor business owners. Prices get marked up vs. cutting costs.


Sent from my iPhone using The Garage Journal mobile app

 

[zkdiesel]

... but some of us do know the cost of doing business. That's what makes the prices so frustrating. Many, but not all, shops are poorly managed by great mechanics who are poor business owners. Prices get marked up vs. cutting costs.


Sent from my iPhone using The Garage Journal mobile app

What costs would you like to cut? Insurance, employees and taxes are the most expensive?

No insurance or lacking proper insurance and one bad deal could end you

Pay poor wage to employees? Good, skilled fast employees go elsewhere and your left with hacks who have an attendance problem, breaking, abusing and misdiagnosing your car....

Taxes. Move to a small shithole in the crappy side of town to get your property taxes down? Nobody wants to leave a $300,000 truck at my shop if it was in a shithole where it will get robbed or stolen


Property tax on shop in IL near Chicago but not in it with a large yard is just shy of 90k a year

So ya there’s some other places to cut costs, but none are to the degree as those and are very small parts of the puzzle

 

[kythri]

I'd like to point out again, that I'm not complaining about parts being marked up in general (see my original post).

I'll freely admit, I don't like it, I think it's ******/shady, and I believe that if a shop needs to mark up parts to remain profitable, that they should either raise their hourly rates, or maybe figure out what's broken in the the back-end that necessitates such a practice. Really, if a shop wants to markup parts for sale, perhaps they should get into the parts business, and stock parts for customer jobs.

That aside, again, I'm not complaining about the fact that the part was marked up. I'm complaining about the rate of markup.

This Schwab's is right next door to an O'Reilly, and, as it turns out, I've got an acquaintance that works there, this happens to be where they got the part from, and she was willing to dish on some details, such as the discounts provided to their neighbor. O'Reilly's retail is $68.99 walk-in for the part (a joke). The price they charged Schwab's was barely more than half of that - less than $40. So, still a more than 150% markup over what they paid.

I didn't figure many/any of the folks in the repair business would take issue with markups, but I've got to say, it's chilling to see how many are defending the practice with "any markup, no matter how ridiculous, is legitimate".

Also, analogies like the grocery store or restaurant are laughable. Just, wow.

Anyhow, once again, I've learned a lesson, and had certain things underscored. I'll let Schwab's change my tires, and their alignment fees aren't unreasonable for being immediately local, but, as mentioned, I'll never trust them to replace parts on my vehicle again.

 

[2ndGearRubber]

Sounds like you have your solution.

Dont like it, fix it yourself.

Schwab marked up the part 30 bucks over what you could have got it for locally. And offered a warranty.

 

[finn]

When I worked for an Oem, parts sold by a dealer were 4x what we bought them for from a supplier.

The vendor, eg Mahle, invoiced, say, $8.00 for a piston. Parts paid $16. The dealer paid $24, and the customer paid $32.

In later years the vendor would be asked for rebates based on volume and efficiency targets.

That was in the late 90s, though, and those were typical margin breakdowns in effect at the time. I suspect the multiplayer is greater than 4x now, though. Parts not in current production would be higher also.

 

[chipjumper]

While these folks complain the capitalism train keeps on rollin. The free market actually sets the prices. The business owners compete for customers. The mechanics come and go as they please. Customers are free to choose which firm they want to do business with.

“It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest.” -Adam Smith

 

[Mr_B]

I run my own outo shop for 20 years and my markup on parts is 25% and that 25% on trade price parts .
we also have almost 8K in common stocked parts that we source quality/brand we like at best/bulk buy prices as enables us some more profit on parts and customer gets job done quicker and at better price and avoiding junk quality parts i don't like fitting so advantages for both parties .
Reality is if you don't have some markup on parts you going have charge time used organising parts and in some instances that a lot of time.
40% quite common, any more than that is bit of money grab.
What you also got realise is most shops not going be hunting for lowest price like you may . By law we got get all work authorised and we give all prices up front and no surprises as you called first .
Some states business costs/hassles can be ridiculous and mix that with less than frugal cost on overheads and equipment and you got serious profit concerns lol .

 

[Shane6377]

What costs would you like to cut? Insurance, employees and taxes are the most expensive?

No insurance or lacking proper insurance and one bad deal could end you

Pay poor wage to employees? Good, skilled fast employees go elsewhere and your left with hacks who have an attendance problem, breaking, abusing and misdiagnosing your car....

Taxes. Move to a small shithole in the crappy side of town to get your property taxes down? Nobody wants to leave a $300,000 truck at my shop if it was in a shithole where it will get robbed or stolen


Property tax on shop in IL near Chicago but not in it with a large yard is just shy of 90k a year

So ya there’s some other places to cut costs, but none are to the degree as those and are very small parts of the puzzle

Yes, all of those are costs to be looked at. Staff hours, shop supplies, marketing are some others.

A quick example - a shop I know has a rotation of staff that work the front desk and answer phones. He could be paying a high school kid minimum wage to do that job but instead he pays his techs. He also schedules a full staff at 7am when they open but usually has 1-2 cars in the bay and 6 techs standing around for the first hour of the day.

It's not just mechanic shops... many small business owners are this way. I know doctors and dentists who are great at their profession but are terrible business owners.


Sent from my iPhone using The Garage Journal mobile app

 

[MattT]

I didn't figure many/any of the folks in the repair business would take issue with markups, but I've got to say, it's chilling to see how many are defending the practice with "any markup, no matter how ridiculous, is legitimate".

How do you make your money?

BTW you might wanna delete the "insider info" before the wrong people see it. Like you said the tire store is right next to the parts house...............

 

[toddmorr]

i've always thought a seller's costs are not my problem as a customer. I don't pay those costs, nor is it my job to manage or understand them. I pay a sales price, and I compare it as appropriate in the marketplace. Too high a sales price for the value delivered? then move to the next offer.

 

[alexb2000]

This tread is so silly, what do you think a major automotive manufacturer pays per piece for a million fan belts? Maybe $3-5 and yet they sell it at the parts counter for $70. If someone wants to invest $5M in a single fan belt they can put them on ebay and undercut the price. The Chinese are doing it everyday. It's a free-ish country.

 

[Yarpo]

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

I know these places exist, I'm just curious how they still do and why anyone would bring their vehicle there haha. Our my labor times are based on book time. Factory warranty labor time for crank case vent valve on a 205 C class pays 3.5 hours. You need to disconnect the battery which pays .2 warranty and theres another step that pays .3, although I'm forgetting it atm. 4 hours, warranty time. Customer pay is 1.5x, so we charge 6 hours for a vent valve, the customer is aware, and it takes me 2 or 3 hours. Good job by all accounts. If they bring it in and we quote 1 hour diag...that's all I get. If I cant find it after 1 hour I can ask for more diag time from my advisor who will contact the customer, or offer my best advice based on what I'd found so far. I cannot continue diag without approval. I work in the rust belt and lose on plenty of jobs because the torch comes out, no surprises to the customer, the book time was 1.5 for x, and it took me 2.5 hours, they're charged 1.5. Simple. Parts and labor is sent to the customer before any work is done. That said the labor rate here is 165 an hour...so maybe theres less "lost" on losing jobs.

 

[ScottsGT]

Had a shop quote my son $300 to replace an outer tie rod end on his '95 Mustang when he took it in for an alignment. Told him hell no. Bought two at Auto Zone for something like $20 each and installed them in an hour in the rain. (they broke it down as $150 for the part/ $150 labor)

The part that really pissed me off? They were in good shape and very tight still.
It was a scam. And yes, I called them out on it.

 

[kythri]

How do you make your money?

Not by marking up retail parts and reselling them.

BTW you might wanna delete the "insider info" before the wrong people see it. Like you said the tire store is right next to the parts house...............

I'm not worried about it. It's not exactly confidential, and it's the price given to Schwab's employees when they come in to buy stuff personally.

 

[2ndGearRubber]

Not by marking up retail parts and reselling them.



I'm not worried about it. It's not exactly confidential, and it's the price given to Schwab's employees when they come in to buy stuff personally.

So had the price been exactly the same, but the parts at retail price and the labor rate raised to cover the difference, you'd have been 100% happy with that?

I'd have no issue personally selling at retail via a shop, and charging the $200+ an hour the labor rate actually is.

 

[Bondo]

Ayuh,...... I've been buyin' parts for over 1/2 a century,.....

Back when parts houses had paper books, there were 'bout 6 different price lists,.....

Price list #1 was for some joe-blow off the street, that pissed-off the counter help,.....

Price list #6 was what they paid for the part,.....

Price lists #2 through #5 depended on how much any one customer spent there,.......

Hi-volume customers got #5 prices,.....

The parts guy's best friend probably got list #4 prices,.....

Joe-blow off the street, that didn't piss-off the parts guy usually got list #2 prices,.....

Personally, I became close personal friends with the parts house Owners, 'n have paid the lowest prices possible,.....
Believe it or not, sometimes below cost,.....

I could give a **** about the butcher, the baker, or the candlestick maker,.....
Anytime I've moved, the 1st "Friend" I've seeked out, was my local Parts Supplier,....

 

[2ndGearRubber]

I
This Schwab's is right next door to an O'Reilly, and, as it turns out, I've got an acquaintance that works there, this happens to be where they got the part from, and she was willing to dish on some details, such as the discounts provided to their neighbor. O'Reilly's retail is $68.99 walk-in for the part (a joke). The price they charged Schwab's was barely more than half of that - less than $40. So, still a more than 150% markup over what they paid.

Also, the OP claimed 400% markup.

markup = 100 * profit / cost


Profit on the part was 97.15-$35 = 62.15

100 X 62.15/97.15

Markup was 63.97%. Not 400%. That is the total markup on the part.


Now if we compare mark up OVER what you yourself could have bought it for:

Profit they made via charging you over what you yourself could have bought the part for: 97.15-68.99 =28.16

100 X 28.16/97.15 = 28.98% markup. This is the effective markup to you, the customer. It doesn't matter what they bought it for, that's irrelevant and sour grapes. You can procure it for $68.99 locally, same say. The markup above and beyond that cost is your effective markup, really the only thing relevant to the discussion.

 

[kythri]

So had the price been exactly the same, but the parts at retail price and the labor rate raised to cover the difference, you'd have been 100% happy with that?

Honestly? I'd have been happier with it than how things played out. I'm a fan of transparency, and it's become evident by the statements of those defending the extreme markup of repair parts that this seems to be an attempt at avoiding transparency.

Back when parts houses had paper books, there were 'bout 6 different price lists,.....

They may not have paper books anymore, but they most certainly have tiered pricing based on who's buying.

List price, walk-in price, account holder price, installer price, stocking installer price, master installer price, the list goes on and on.

 

[2ndGearRubber]

Honestly? I'd have been happier with it than how things played out. I'm a fan of transparency, and it's become evident by the statements of those defending the extreme markup of repair parts that this seems to be an attempt at avoiding transparency.



They may not have paper books anymore, but they most certainly have tiered pricing based on who's buying.

List price, walk-in price, account holder price, installer price, stocking installer price, master installer price, the list goes on and on.

Couldn't agree more. Unfortunately in the race to the bottom, lots of businesses forget this.



And yes, tiered pricing is normal. The part manufacturer, to wholesaler, to store front, to shop, to customer. Every stage gets marked up significantly. Same at walmart, the gas station, the mechanic, and every business which wants to continue to exist. Hell even "non-profits" need to turn a profit. If they finish every quarter out with no debt, but $0.00 in the checking account, they're a burnt out light bulb away from bankruptcy.

 

[kythri]

Also, the OP claimed 400% markup.

markup = 100 * profit / cost


Profit on the part was 97.15-$35 = 62.15

100 X 62.15/97.15

Markup was 63.97%. Not 400%. That is the total markup on the part.


Now if we compare mark up OVER what you yourself could have bought it for:

Profit they made via charging you over what you yourself could have bought the part for: 97.15-68.99 =28.16

100 X 28.16/97.15 = 28.98% markup. This is the effective markup to you, the customer. It doesn't matter what they bought it for, that's irrelevant and sour grapes. You can procure it for $68.99 locally, same say. The markup above and beyond that cost is your effective markup, really the only thing relevant to the discussion.

Voodoo (and wholly inaccurate) math aside:

First, I could have gotten the part cheaper than retail at a number of local stores. I may not have been able to have gotten the price at O'Reilly that the tire shop did, but I've since learned that I could have gotten it cheaper at NAPA (cheaper than what they paid O'Reilly, not just cheaper than retail).

Second, I don't care how you want to rationalize it, but when I can get a part from Amazon at $21.79 ($21.99 at RockAuto) that I'm charged $97.15 for, that's a 446% markup in price.

$21.79 x 4.46 = $97.1834

I'm sure that, had the repair shop had the part in stock (they claimed they normally stock it, but they were out), they likely would have paid even less for that, than they did to the parts store next door.

Ultimately, though, now? I DON'T CARE why a repair shop is marking up parts. I won't do business with any shops that do. When I request a quote for work that I can't or don't want to do, I'll make sure to get it fully itemized, so I know how much they're going to charge me for a part they supply, and I'll make my decision to proceed from there.

I was pretty much resigned to deal with it, but I thank you for helping me see the light, and avoid shady business practices. The money I save by not helping to sustain shady business can instead be spent at honest ones. Good day.

 

[kctyphoon]

If somebody is gonna DOUBLE the price of a rebuilt alternator - and call that “fair”” - what’s he gonna do if a guy requests a factory alternator? You gonna double that too?? That’s a great way to get beat up in your own shop.

People go to Joe’s Garage to avoid the high prices of a dealer.. if Joe is gonna double all his prices - or NEEDS to double all his part prices - thats probably cause people got sick of being ripped the **** off, and never went back.

I remember when i was in my 20’s - transmission blew on my maxima - $1800, and “coincidently” the starter went in their shop.. 1 month past warranty (40,000 miles later) transmission blows again.. i go back - guy tells me “your lucky it lasted that long”. I said funny, I don’t remember that being part of your sales pitch when i bought the thing...

In goes another rebuild - and “your starter needs to be replaced too”.. the police were called when he said I wasn’t leaving with a $100 starter he paid for, and i lost it when i reminded him he pulled this same ******** on me a year ago - and i handed over 4 grand in 13 months for a trans that was suppose to be “better than new” the first time according to him. He ate that starter (small victory).

How many transmissions you think that guy has to rebuild just to cover RENT for his shop in Staten Island ny, on a major road.. i cant imagine WHY places try to bleed their customers dry..

 

[visionguru]

With the labor rate so high ($150ish), the markup on the parts is almost trivial. When I go to the dealers/shops, I always ask for a detailed quote first, and never needed to second guess.

The following is the reason for DIY.


Timing belt cost about $200
Compliance bushings $50
Brakes $100 with premium pads/rotors
....

I did all in the list for $500. That saves $4000+ for whatever tools I like.