Reasonable Parts Markup?
- Thread starter kythri
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chipjumper
Well-known member
Interesting. My father in law is friends with the owner of a local Auto Value. He used to tell me all the time to go there and put my purchases under his corporate account. Well I never did; they already seemed to “hook me up” with their good prices. Then one day I asked the guy at the counter if he could put the sale under (father in law’s business). The guy is speechless and has to ask another guy there if the price on the computer was correct. Apparently I now pay absolute cost. I literally have paid like $1.75 for an AC Delco oil filter versus $3.99 at Wally word. Shocks struts pads whatever it’s amazing. I haven’t been there in a while as everything is fixed up now.
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Lassen Forge
Well-known member
Reasonable for me is 50%, and if you have an exotic car, then maybe more, because I have to take time out of my day to chase parts (which I could be making money elsewhere) to chase the parts to fix your car... and if it costs me more, then you pay that. Because I'm your mechanic, not your parts person. I will gladly give you my parts list and have YOU be my parts chaser, pick up the right ones, and drop them off so I can fix your car... but if I have to chase your parts, then you pay for my doing that.
Super Mech
Well-known member
I guy I know had a truck repair shop. He was in business from the early 50s. Did lots of oil delivery trucks and tank repairs. If his man had to go drive to a dealer to pickup a part he would charge that time in labor to the job even if the guy was stuck in traffic for two hours extra. That was 30 years ago.
theoldwizard1
Well-known member
So I am guessing your labor rate is about $100.
Do you use a "flat rate" system, and is that how the mechanics get paid >
What is the shop cut of labor ?
If your going toComplain about the cost of going to a mechanic shop then do it yourself.
How do you expect mechanics to make a decent living? Such ******** complaining I wish I could come to your work and complain about price.
I’m 100% sure where you work there is a huge mark up also.
There is in all industries.
How do you expect mechanics to make a decent living? Such ******** complaining I wish I could come to your work and complain about price.
I’m 100% sure where you work there is a huge mark up also.
There is in all industries.
I work at a chain, the normal markup on parts is 100% or higher and normally isn't far off from the suggested retail price of the parts supplier. For dealer parts it's 50% or the dealers list price.
We also have a low labor rate at $85 an hour and often charge less than book time, which makes up for the high parts markups. Default labor on an outer tie rod is $35, $70 for a control arm, $50 for a bare strut, $30 for a shock. But I'll change the labor to book time when making an estimate if I know it's a real pita.
I believe we're a little more expensive than an average independent shop but definitely cheaper than the dealer. Average pads/rotors brake job is around $300-400
I get paid a % of parts and labor and 60% of what my normal pay would be for anything under warranty. I'm not rolling in $$$, made $40-50k last year at a different store, same company. Looking like I'll make more this year but It's been slow lately. Did 1 alignment and 3 oil changes the whole day, nothing like being stuck at work for 10 hours making no money
We also have a low labor rate at $85 an hour and often charge less than book time, which makes up for the high parts markups. Default labor on an outer tie rod is $35, $70 for a control arm, $50 for a bare strut, $30 for a shock. But I'll change the labor to book time when making an estimate if I know it's a real pita.
I believe we're a little more expensive than an average independent shop but definitely cheaper than the dealer. Average pads/rotors brake job is around $300-400
I get paid a % of parts and labor and 60% of what my normal pay would be for anything under warranty. I'm not rolling in $$$, made $40-50k last year at a different store, same company. Looking like I'll make more this year but It's been slow lately. Did 1 alignment and 3 oil changes the whole day, nothing like being stuck at work for 10 hours making no money
Next time I have breakfast at a restaurant, I'm going to bring my own raw food with me and have them cook it. lol.
I don't have a problem with a small markup, The shop has to keep the lights on and cover the overhead. However, I would NEVER ask to bring my own parts to a shop unless it was a super rare piece and I had one of the only parts available already in my possession. For standard repairs, that's a no no.
As for parts markup..... I'm not a full time mechanic, but I have friends who are. I've heard all the stories. Some shops will mark up parts 100%. Yes, really.
Either way, I don't really care because I fix 99% of my own stuff. If I need to take something to a shop, I get an estimate... if I think it's fare, I let them do the work. I pay the bill. Simple.
WittHay
Well-known member
The cost for the Moog part in this thread at my regular parts place is $32 and the walk in price is $63 at the larger local chain. Thats close to a 100% markup and very similar to the pricing in Oregon. If Les Schwab sold the part for up to $70 thats fair and should be enough margin
I dont like the references to Fedex/UPS delivered parts in this thread. Basically meaningless when it comes to normal car repair shops. No idea when the parts will come in and no guarantees the right parts will be delivered, Shouldn't be a problem if parts come from Rock Auto and a car is ******* for a week or more for a simple repair
I dont like the references to Fedex/UPS delivered parts in this thread. Basically meaningless when it comes to normal car repair shops. No idea when the parts will come in and no guarantees the right parts will be delivered, Shouldn't be a problem if parts come from Rock Auto and a car is ******* for a week or more for a simple repair
Yes, actually I do. I run my own company and have for years.
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.
They tried to whack you twice for the engine air filter, too...
Attachments
Farmall450
Well-known member
Yup -- even the NAPA brand will run your shop $48.** + tax. So, not too shabby imo, that brings it down to less than half
Farmall450
Well-known member
My first thought, too. Y I K E S
Farmall450
Well-known member
I probably wouldn't have been back, and if I had, it wouldn't have been to pay him more money.
On the other hand, geez, how many times is the guy starting the thing? Before cordless tools did they brace a bar and let the starter break free drivetrain bolts?
No, actually his fountain drink analogy is exactly the same. Ditto a coke out of a vending machine. Those aren't fixed prices or a preset product price, its whatever arbitrary price the vending machine operator wants to charge. $2.50 out of a vending machine, $1.50 at a drug store, 6 pack for $3 at a market. How about $5 at a sports arena or movie theater for good measure? Its exactly the same.
If someone didn't ask for an invoice breakdown prior to agreeing for repair that's on them but every repair shop is up front on price so you, the OP, anybody is going to know before hand what parts and labor are. You don't get to say "yes, please do the repair" then complain after the fact because you decided to google the part number. Doesn't work that way just like you don't chase down the vending machine guy and berate him about how you just paid $2.50 for the drink the market sells for 50 cents so he owes you $2 back.
Put your big boy pants on and take some responsibility for your decisions.
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"They"
You know that's just the techs recommendations on his generic inspection form that he has to fill out, right? Guy probably forgot he added it above and threw it on there. If I add it manually in our program but then get to the bottom and select the box for pass/recommend/fail, it'll add it again. If you don't notice or forget to remove it, you end up with someone on the internet thinking you tried to steal their 60 dollars. While I don't know this shop or that tech, id Imagine it was a mistake. If it wasn't, well of course **** those guys.
Dont forget tho, Its a quote...on a FREE inspection. He could have recommended nothing and people would be pissed "Fuckers, not doing my free inspection, what a scam" - I can hear it now.
Looks like pretty basic stuff. Based on the vehicles mileage he recommends Timing belt, valve adjustment and spark plugs. Probably due @ a certain interval....say 60k on that car. If the mileage is over and he has no history of it being done, why would you not recommend it (IF NOT ALREADY DONE?) Brake fluid is dark, easy to write up. Most people don't flush their brakes often and its not something I really care if people choose to do, but if the fluid is brown, another easy write up. Same with the ATF/PS fluid. Not sure what his recommendation is on the brakes, if the LR pad is 5mm and the RR is 6mm its a non issue typically. Not sure why he couldn't include measurements. Pretty standard quote...on a free inspection. If you don't want the FREE inspection, you can decline... the tech would appreciate it.
Bingo. Ask for the price up front, get a detailed quote, pay the price. If you get the quote and find you don't like what the part is, decline the repair. The vending machine example is great, but seriously it applies to everything. Almost nothing we buy is getting to us at cost, not sure why parts are suppose to (tho I think there's a line to be drawn somewhere)
This Keyboard I'm typing on. Walmart bought it from logitech for x. Walmart sold it to me for Y. Does anyone think X and Y is or should be the same?
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$119/hour. Flat rate techs are making approx $30/hour, we're in a mixed rural market. In a more dense suburban area I'd be $129 and techs around $40/hour. I know of a thriving shop in small town Oklahoma at $149.
Not sure what you mean by shop cut?
It's all relative to the value you provide. Most of the people on this forum and thread (like myself) are DIY'ers or hands-on at the least and our perceived value is not the same as the general public.
kctyphoon
Banned
It
I love how u speak on behalf of EVERY shop, and try to make a case that NONE of them are ****** people. Let's talk warranties shall we? My father's Audi - driver window not working properly.. that was THREE TRIPS to the dealer - over $4000 in parts replaced - before - BEFORE - someone took the door panel off to fix the frayed wire that was shorting with some electrical tape.. that's some stance to have, how these places are just ENTITLED to charge whatever they want, have ZERO moral responsibility, and as customers "WE" should put our big boy pants on... Was that money out of his pocket? No.. so I guess it's just ok to USE him as free income, make the guy come back 3 times as he couldn't even make it off their property with a working window.. but hey, if guys don't like having to pay for all their own tools to make someone ELSE more money than they make, or break their backs to carve out $25/hr - we all made.choices - "put your big boy pants on" u said?? Your basically saying it's the customers fault that they trust someone won't rip them off.
And no - your vending machine analogy is NOT right - cause any person walking upright KNOWS a can of soda doesnt normally RETAIL for $2.50 a can. It's just a happy coincidence most people don't know what the retail price should be for every part on their cars. If they want that soda bad enough - they will pay - KNOWING they are overpaying.. start telling people upfront "I double the prices of all my parts" - let me know how that works out..
The problem with the auto repair Industry is because it has gone from a service Industry and morphed into a sales Industry. BOOK RATE is a ****** scam. the standard excuse of "it's so everyone pays the same" is a sales pitch, nothing more. The DEALER is concerned with making sure everyone pays the same price now? Really??? Why didn't that happen when they sold the car??
I'm fine with people making a buck. They SHOULD be compensated for their work. The issue is when there's just an obvious money grab - and the PRETENDING that it just doesn't go on in some places.
I love how u speak on behalf of EVERY shop, and try to make a case that NONE of them are ****** people. Let's talk warranties shall we? My father's Audi - driver window not working properly.. that was THREE TRIPS to the dealer - over $4000 in parts replaced - before - BEFORE - someone took the door panel off to fix the frayed wire that was shorting with some electrical tape.. that's some stance to have, how these places are just ENTITLED to charge whatever they want, have ZERO moral responsibility, and as customers "WE" should put our big boy pants on... Was that money out of his pocket? No.. so I guess it's just ok to USE him as free income, make the guy come back 3 times as he couldn't even make it off their property with a working window.. but hey, if guys don't like having to pay for all their own tools to make someone ELSE more money than they make, or break their backs to carve out $25/hr - we all made.choices - "put your big boy pants on" u said?? Your basically saying it's the customers fault that they trust someone won't rip them off.
And no - your vending machine analogy is NOT right - cause any person walking upright KNOWS a can of soda doesnt normally RETAIL for $2.50 a can. It's just a happy coincidence most people don't know what the retail price should be for every part on their cars. If they want that soda bad enough - they will pay - KNOWING they are overpaying.. start telling people upfront "I double the prices of all my parts" - let me know how that works out..
The problem with the auto repair Industry is because it has gone from a service Industry and morphed into a sales Industry. BOOK RATE is a ****** scam. the standard excuse of "it's so everyone pays the same" is a sales pitch, nothing more. The DEALER is concerned with making sure everyone pays the same price now? Really??? Why didn't that happen when they sold the car??
I'm fine with people making a buck. They SHOULD be compensated for their work. The issue is when there's just an obvious money grab - and the PRETENDING that it just doesn't go on in some places.
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2ndGearRubber
Well-known member
They do know the retail price for anything and everything.
99.9% of customers carry a phone with mobile internet connectivity. Most phones even have voice to text, you dont even need to type. Year make model, part name.
Dont like it, DIY. I dont know much about roofing, but I plan to learn before I buy a roof. Before a customer spends XYZ, perhaps they should do their research? Or call for prices elsewhere?
Of course the latter is usually how junk parts get installed. But hey, when the only concern is the lowest price, cheap drive works brand tie rods are what you want.
99.9% of customers carry a phone with mobile internet connectivity. Most phones even have voice to text, you dont even need to type. Year make model, part name.
Dont like it, DIY. I dont know much about roofing, but I plan to learn before I buy a roof. Before a customer spends XYZ, perhaps they should do their research? Or call for prices elsewhere?
Of course the latter is usually how junk parts get installed. But hey, when the only concern is the lowest price, cheap drive works brand tie rods are what you want.
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Wow. A lot of hate for shops here. I can’t see it myself.
Sure, I’ve had shops try to screw me. A Honda dealer tried to not cover warped rotors under warranty at 9k miles (tires had never been off). Escalated to Honda and got it fixed right under warranty. The service advisor later told me that the service manager tried to screw me. And an independent shop tried to charge me 5K to replace the front struts on my Toyota Highlander. While an independent Porsche shop found a long list of issues with the wife’s Macan - I was suspicious and had the car checked at the Porsche dealer - which found none of those issues. This is all in 40+ years of car ownership.
On the other side I’ve had many great shops work on my cars. When I was in California, I found both an independent BMW and another Porsche shop that were great. Fair prices, did what they said they would, got it fixed right the first time. It took two tries, but I found the same kind of Porsche shop here in GA. (First one was the long list of issues guy.). And the front struts? Got that fixed at the dealer for $1.4K including a new timing belt - they did a great job as the handling change was immediate.
My experience with all of the trades (plumbers, electricians, mechanics, whatever) is that there are good, bad, and Ok ones out there an you just need to find the good ones. The same is true with professionals - I’ve had both bad and excellent doctors, dentists, CPAs, etc. You just need to do a bit of due diligence, and be an informed consumer when dealing with folks.
And I’ve got to agree with the shop owners on the parts cost. You get an itemized list of costs before they do any work. If you agree to it, that’s what you agreed to. If you don’t like it, find another place or do it yourself. It is not like they have one of your kids hostage...
- Max
Sure, I’ve had shops try to screw me. A Honda dealer tried to not cover warped rotors under warranty at 9k miles (tires had never been off). Escalated to Honda and got it fixed right under warranty. The service advisor later told me that the service manager tried to screw me. And an independent shop tried to charge me 5K to replace the front struts on my Toyota Highlander. While an independent Porsche shop found a long list of issues with the wife’s Macan - I was suspicious and had the car checked at the Porsche dealer - which found none of those issues. This is all in 40+ years of car ownership.
On the other side I’ve had many great shops work on my cars. When I was in California, I found both an independent BMW and another Porsche shop that were great. Fair prices, did what they said they would, got it fixed right the first time. It took two tries, but I found the same kind of Porsche shop here in GA. (First one was the long list of issues guy.). And the front struts? Got that fixed at the dealer for $1.4K including a new timing belt - they did a great job as the handling change was immediate.
My experience with all of the trades (plumbers, electricians, mechanics, whatever) is that there are good, bad, and Ok ones out there an you just need to find the good ones. The same is true with professionals - I’ve had both bad and excellent doctors, dentists, CPAs, etc. You just need to do a bit of due diligence, and be an informed consumer when dealing with folks.
And I’ve got to agree with the shop owners on the parts cost. You get an itemized list of costs before they do any work. If you agree to it, that’s what you agreed to. If you don’t like it, find another place or do it yourself. It is not like they have one of your kids hostage...
- Max
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Ramblin Man
Well-known member
I wonder how many know the difference in profit percentage and markup percentage.
Mike.ASC
Well-known member
What difference does it make as far as how much the shop paid vs how much they charge for a part as long as the total cost for the part and labor is competitively priced for the area? What was the total job cost?
kctyphoon
Banned
The only issue isn't the lowest price. Most sane people would have no problem with a reasonable markup on parts ordered to offset the time spent getting them. But when someone says they're gonna DOUBLE the prices of not so I inexpensive parts - COMPLETELY NEGATING the point of NOT going with a NEW FACTORY PART to begin with, and the sense of entitlement like "there's nothing wrong with, and if the customer doesn't realize that, its HIS fault" - that's a problem.
If a shop is gonna charge more then a lawyer - for picking up the phone to order an alternator from pep boys - don't be surprised if business is slow when people catch on. The phone call costs at much as the alternator? C'mon man..
I should get a job at a shop and just order 2 day and go home..
If a shop is gonna charge more then a lawyer - for picking up the phone to order an alternator from pep boys - don't be surprised if business is slow when people catch on. The phone call costs at much as the alternator? C'mon man..
I should get a job at a shop and just order 2 day and go home..
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Modern Garage
Well-known member
Just a note about customer supplied parts:
Quite a few years ago I allowed customer supplied parts in my shop. A fellow brought in his own brake rotors and one of my employees installed them. When he went for a test drive the ABS light was on. Tested the ABS and found no speed signal from either front wheel. Turns out the rotors were machined wrong and the sensor rings on the rotors were in the wrong spot. We advised the owner who said "OK, leave them be, I'll drive it that way." (Really??!!)
I had him sign the work order with the ABS diagnosis (for which we were not paid, BTW) and let him go and almost immediately regretted it.
As a professional I'm responsible for anything that happens to your car in my shop. If you bring me faulty parts they're my responsibility because, as a professional I'm expected to know the difference between good and bad. If the fault is not apparent it doesn't matter -the car is in my care. It may not even matter if the fault is non-existent: If you drive into a ditch avoiding a deer after I put ball joints on your car there's a good chance I'll have to prove my suspension work wasn't at fault.
Is this right? Heck no! Is it likely in The United States Of Litigation? Almost guaranteed.
That's why we have a hard and fast rule: No customer supplied parts.
If I purchase a part from NAPA, Oreily, Fomoco, I can lay the responsibility at their door, if I accept a part you bring me I own it because I'm the professional and you're not. It doesn't matter if it's the same part from the same supplier that I would have used because you, the non professional, is paying for my professional service and that leaves me holding the bag.
If you have a shop that allows you to bring your own parts that's fine, just don't expect me to do it. I have to turn away one or two people a month due to this rule, but also have one or two people a month who decide to eat the part or try for a refund and have me do the work anyway, apparently understanding the situation. (Or maybe they don't understand but realize we're highly recommended and make the decision based on our reputation.)
Joe
Quite a few years ago I allowed customer supplied parts in my shop. A fellow brought in his own brake rotors and one of my employees installed them. When he went for a test drive the ABS light was on. Tested the ABS and found no speed signal from either front wheel. Turns out the rotors were machined wrong and the sensor rings on the rotors were in the wrong spot. We advised the owner who said "OK, leave them be, I'll drive it that way." (Really??!!)
I had him sign the work order with the ABS diagnosis (for which we were not paid, BTW) and let him go and almost immediately regretted it.
As a professional I'm responsible for anything that happens to your car in my shop. If you bring me faulty parts they're my responsibility because, as a professional I'm expected to know the difference between good and bad. If the fault is not apparent it doesn't matter -the car is in my care. It may not even matter if the fault is non-existent: If you drive into a ditch avoiding a deer after I put ball joints on your car there's a good chance I'll have to prove my suspension work wasn't at fault.
Is this right? Heck no! Is it likely in The United States Of Litigation? Almost guaranteed.
That's why we have a hard and fast rule: No customer supplied parts.
If I purchase a part from NAPA, Oreily, Fomoco, I can lay the responsibility at their door, if I accept a part you bring me I own it because I'm the professional and you're not. It doesn't matter if it's the same part from the same supplier that I would have used because you, the non professional, is paying for my professional service and that leaves me holding the bag.
If you have a shop that allows you to bring your own parts that's fine, just don't expect me to do it. I have to turn away one or two people a month due to this rule, but also have one or two people a month who decide to eat the part or try for a refund and have me do the work anyway, apparently understanding the situation. (Or maybe they don't understand but realize we're highly recommended and make the decision based on our reputation.)
Joe
kctyphoon
Banned
Cause most times when people get estimates - it's over the phone AFTER they brought their daily driver in for repairs - and it's a car they rely on. There IS no "itemized" list given, and when they ask what it's gonna cost the answer usually given over the phone is this "It's probably gonna be about "x" hours labor - PLUS whatever the parts COST".
Not " it's gonna be "x" amount of labor, plus DOUBLE what the parts cost ME"..
That's reality...
Chances a customer knows the place be brought his car will DOUBLE the price on parts BEFORE he leaves the car there? 0%?
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Maybe things are different in Jersey. In CA it’s a state law that you get the itemized list and even the shops that tried to screw me gave me the list. Not sure about GA state law, but so far I’ve gotten the itemized here as well.
You make a point about the daily driver and phone call, but once again you get the _total_cost for whatever they are doing there, and you can say yes or no based on how you feel that relates to other local shops. And if you really care, you could have them text or email the details to you. Or maybe you have a 90s Moto flip phone?
I don’t really care where the shop makes it’s money. I know that it isn’t charity. What is on me is that I have to find a shop that does good work with competitive prices. It looks like you found a shop you don’t like and now you’ll find another.
I should note that the major thing to me is that the shop does the work right - the original problem gets fixed and doesn’t come back later. They also don’t do any unnecessary work or make things worse. A competitive price is important, but not the major thing for me. You obviously think differently, and there is room for many opinions...
- Max
tom-ky
Well-known member
I do industrial and commercial equipment. I actually work for the manufacturer but we service other brands. Those parts are usually marked up 35% generally some more. Most parts for other brands parts are marked up to the other manufacturer's list price. I assume in our business markup is more important as most of these customers take 30 days or more to pay. We don't do flat rate they are billed for actual time. I have always done fleet or industrial equipment work so it is different than the auto field. I do some work for auto dealers and see some stuff that shocks me and then see the great stuff.
kctyphoon
Banned
Maybe things are different in Jersey. In CA it’s a state law that you get the itemized list and even the shops that tried to screw me gave me the list. Not sure about GA state law, but so far I’ve gotten the itemized here as well.
You make a point about the daily driver and phone call, but once again you get the _total_cost for whatever they are doing there, and you can say yes or no based on how you feel that relates to other local shops. And if you really care, you could have them text or email the details to you. Or maybe you have a 90s Moto flip phone?
I don’t really care where the shop makes it’s money. I know that it isn’t charity. What is on me is that I have to find a shop that does good work with competitive prices. It looks like you found a shop you don’t like and now you’ll find another.
I should note that the major thing to me is that the shop does the work right - the original problem gets fixed and doesn’t come back later. They also don’t do any unnecessary work or make things worse. A competitive price is important, but not the major thing for me. You obviously think differently, and there is room for many opinions...
- Max
Place doubles the cost of parts. How much is an itemized list gonna cost when they have to use a computer instead of a phone, and the list takes longer?
Guy walks into a shop to get a starter installed .. place hands over a bill for $1000 when work is done. Guy asks - why is this so much, starter for car is like $100. Place answers - yea WE paid $100 - but WE charge $800 for that starter. YOU SHOULDA ASKED FIRST..
Next time someone on here tries to buy a welder off eBay - and recieves a PICTURE of that welder instead cause THEY didnt read the ENTIRE listing.. I don't wanna hear complaints they got s scammed or disputed the credit card charge . All in favor ?????
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jethro29
Well-known member
The industry standard is 40 % .
Elsinore13
Well-known member
- Joined
- Sep 20, 2017
- Messages
- 504
Amazing how many don’t. That’s why so many of them have failed and resort to bitching on message boards. They also have no clue as to how many man hours and paperwork are involved in the handling of just $100,000.00 per month of parts and materials around an automotive related business. Workers comp, rent, garage keepers liability, utilities, hazardous waste handling, tools, equipment, maintenance,......it never ends. But yep, just cover it all in the labor. Anything else is downright thievery.
I'm ok with 10-20 percent markup. Shops have alot of work and upkeep some aren't aware of. That being said a 40-70 percent markup is just plain thievery and I'd be calling them out on that as even getting locally is cheaper plus the inevitable shop discount they get from said parts store
ScottsGT
Well-known member
Is that 40% on jobber cost or full retail?
'Reasonable' mark-up doesn't matter. Nobody says it has to be a percentage either. (Although that's easy to calculate, and makes parts cost a conflict of interest with the customer.)
The fact is a business has to yield at least a modest profit (long-term) or it will close its doors. When shop labour rates are competitive, and everybody uses the same book-time for jobs, what's left to adjust your bottom line?
I worked in automotive over 20 years ago. I learned enough to get out. Aside from tire mounting, AC recharge, and the odd alignment, I do all my own automotive work.
The fact is a business has to yield at least a modest profit (long-term) or it will close its doors. When shop labour rates are competitive, and everybody uses the same book-time for jobs, what's left to adjust your bottom line?
I worked in automotive over 20 years ago. I learned enough to get out. Aside from tire mounting, AC recharge, and the odd alignment, I do all my own automotive work.
Problem there is the margin on labor already looks like 400%, or higher, to the typical employee/customer. So they're not going to be any happier if you bump labor to 600% to cover the revenue you'll loose by selling them the parts at cost. And even if you did sell quality, same day local, parts at cost you'd still get the "chinese **** is only $** on the internet" whiners.
The only way to please "price concious" people who have zero clue what it costs to operate a business is to run at a loss until you go bankrupt.
dnschmidt
Well-known member
Here's reality. A shop needs to make a certain amount of money to make it worth their while to stay in business. Let's say that amount is $300/hr per mechanic. However the shop meets that number is unimportant. They can charge you exactly what the part cost and charge you $300/hr labor rate or they can mark up the parts. You pick it.
I have had a five year battle with Eric O. of South Main Auto about his pricing policy. Eric lets customers bring him parts and I think he's nuts for doing this. The absolute worst case is when this auction guy brings him impossible to diagnose cars from the auction (which is why they were at the auction) that Eric does diagnose and then this asswipe has some high school kids change the parts Eric told him to change.
I have tried, countless times, to beat into Eric’s thick skull (unsuccessfully I might add) that he’s losing money doing this. If he did a simple brake job he makes his hourly rate plus the markup from parts and he’s using about 5% of his brain to do it. In short a gravy job. These tough dog diagnosis cases he makes his hourly rate and that’s it while using 110% of his brain and tens of thousands of dollars’ worth of diagnostic equipment such as his Verus and Pico Scope. Everybody wants something for nothing and their chicks for free. That’s only the case for rock stars and nobody else.
I have had a five year battle with Eric O. of South Main Auto about his pricing policy. Eric lets customers bring him parts and I think he's nuts for doing this. The absolute worst case is when this auction guy brings him impossible to diagnose cars from the auction (which is why they were at the auction) that Eric does diagnose and then this asswipe has some high school kids change the parts Eric told him to change.
I have tried, countless times, to beat into Eric’s thick skull (unsuccessfully I might add) that he’s losing money doing this. If he did a simple brake job he makes his hourly rate plus the markup from parts and he’s using about 5% of his brain to do it. In short a gravy job. These tough dog diagnosis cases he makes his hourly rate and that’s it while using 110% of his brain and tens of thousands of dollars’ worth of diagnostic equipment such as his Verus and Pico Scope. Everybody wants something for nothing and their chicks for free. That’s only the case for rock stars and nobody else.
Elsinore13
Well-known member
- Joined
- Sep 20, 2017
- Messages
- 504
Then they will all piss, moan and bellyache that there is no one left to install their eBay parts.
Iroc-Z
Well-known member
Man lots of haters in here. Also allot opinions from people who have never run a shop. Do you think when you get a new hvac system in your house they sell you parts at cost? Or a plumber installs water heater at cost. Tech shortage is real. Shops are going to charge what they need to charge to make money or else why are they going to do the work. I run a shop and will on occasion let customers supply there own parts but I charge more in labor. I know how much I have to do jobs for to pay bills.
dr_clyde
Well-known member
I do not own an auto repair business, but I do own a business that involves purchasing materials and then marking them up.
I often times don't charge for incidental tooling or small material drops out of the random rack. It is included in my overhead and is covered by my hourly rate, usually a leftover from some other paying job, so its already covered elsewhere. But, If I have to purchase any meaningful amount of hardware, material or whatever for your project, I mark it up at least 25%. I have to spec the stuff, place an order, unload a truck, rack the material, and then wait 30 days for your accounts payable to cut me a check AFTER we ship the completed job. Sometimes, I mark up materials 50% or more. Depends on a lot of factors.
Quite a few of my customers simply have the metals supplier drop ship me parts and save the markup. Its worth it for both of us.
However, I understand this is different than with auto parts. If I ran an auto shop, the only time I would accept customer supplied parts is in the case of high performance parts that would be difficult to source through normal channels, and even then, I would probably just ask the customer to spec the part and we would purchase it. Part quality and warranty are HUGE concerns outside of whatever incidental parts markup percentage there is. I would not be a happy camper if a customer came back with complaints of a faulty part that we installed that I had no recourse with the manufacturer or distributor for.
To my eyes, the line of responsibility concerning part warranty and who's responsible in the event of a failure is FAR more important than the markup money.
I don't care how the shop writes up the bill. If they charge me 1k for parts and a dollar for labor, or ****, they could GIVE the parts away and charge a LOT more for labor. As long as the price I pay is what we agreed upon, all is well.
I had a local shop do a clutch in my Chevy pickup a few years back. I trust them, they do good work and are honest guys. A few days later, I had a puddle of transmission fluid on my drive under the truck. I took it back. Faulty seal. Sourced from NAPA. NAPA paid for a new seal and the labor to install. Had I sourced a seal and provided it, I would be on the hook for the entire replacement labor cost. Worth whatever markup they charged.
I often times don't charge for incidental tooling or small material drops out of the random rack. It is included in my overhead and is covered by my hourly rate, usually a leftover from some other paying job, so its already covered elsewhere. But, If I have to purchase any meaningful amount of hardware, material or whatever for your project, I mark it up at least 25%. I have to spec the stuff, place an order, unload a truck, rack the material, and then wait 30 days for your accounts payable to cut me a check AFTER we ship the completed job. Sometimes, I mark up materials 50% or more. Depends on a lot of factors.
Quite a few of my customers simply have the metals supplier drop ship me parts and save the markup. Its worth it for both of us.
However, I understand this is different than with auto parts. If I ran an auto shop, the only time I would accept customer supplied parts is in the case of high performance parts that would be difficult to source through normal channels, and even then, I would probably just ask the customer to spec the part and we would purchase it. Part quality and warranty are HUGE concerns outside of whatever incidental parts markup percentage there is. I would not be a happy camper if a customer came back with complaints of a faulty part that we installed that I had no recourse with the manufacturer or distributor for.
To my eyes, the line of responsibility concerning part warranty and who's responsible in the event of a failure is FAR more important than the markup money.
I don't care how the shop writes up the bill. If they charge me 1k for parts and a dollar for labor, or ****, they could GIVE the parts away and charge a LOT more for labor. As long as the price I pay is what we agreed upon, all is well.
I had a local shop do a clutch in my Chevy pickup a few years back. I trust them, they do good work and are honest guys. A few days later, I had a puddle of transmission fluid on my drive under the truck. I took it back. Faulty seal. Sourced from NAPA. NAPA paid for a new seal and the labor to install. Had I sourced a seal and provided it, I would be on the hook for the entire replacement labor cost. Worth whatever markup they charged.