There is mark up's (or more correctly PROFIT) in every step along the way, from manufacturer to wholesaler to distribution to warehousing to stores to repair shops and finally to the customer.Good for you, but why are you singling out auto repair shops marking up parts
Good for you, but why are you singling out auto repair shops marking up parts
. — lets imagine its a contract.. you sign a contract stating that at “x” cost per hour to the customer, you will be supplying “4” hours of labor, because that’s what’s required to accomplish the job. (Because OBVIOUSLY nobody is just going to PAY for someone NOT to work)).Ok,
The job DIDNT require 4 hours, you didn’t provide 4 hours of labor. You bill for 4 hours anyway (only working 2) - customer pays..
Who’s in breech of the “contract” ?
THANKS GUYS FOR THE KIND WORDS!
To answer your questions Yarpo:
I pay my techs salary, and constantly reinforce quality over quantity. Without a doubt, flat rate drives techs to go as fast as they can and invariably they make mistakes, even good techs. I want my techs to check service procedures, ask questions, use the right tools, learn new things, go to training, etc. and not be afraid of complex jobs. I don't want them to sit there all day thinking of how they can go faster and faster to make a living. Flat rate may have been appropriate back in 1980, when the most complicated thing you were going to do is rebuild a VVC, Quadrajet, HEI or rebuild a trans; but with the complexity of todays cars, flat rate has passed. It's simple, the only people who are proponents of flat rate are shop owners who want to leave their techs holding the bag if work gets slow or the jobs get hard. Some shop owners will say that their techs want flat rate because they can book 15 book hours in an 8 hour day. My response is, (and has been), well if they can do more than 8 book hours why not just pay them salary for what they can do and emphasize quality. Believe me, quality goes sky high and everybody's happy.....except for shop owners that want to push all risk and stress on to their techs, with tangential concern for quality.
With respect to labor rate, I don't have a set labor rate. For simple things I have fixed prices, (oil changes, most brakes, etc.). For more complex repairs, my labor charge is based on the difficulty of the job, which obviously correlates to the time it takes to do the job but I don't charge by "book" time.
For example, changing a bulb is at the bottom end of the spectrum, but doing custom classic vehicle work, complex diagnostics, fabrication or custom PCM's and systems are at the top end. However, I DO use the "book" as a guide for new jobs; but at this point in my career, I have a pretty good idea what's going to be involved in most repairs.
I realize that this sounds convoluted on the internet, but in practice, my customers love it. I ALWAYS charge a diagnostic fee and am very open and transparent about what parts I am using, what they cost me, and how much labor I am charging them, broken down by multiple task, if necessary. I do this so customers know EXACTLY what is wrong with their vehicles and how much they are paying for parts and labor. If they want to compare labor cost and take it to another shop, I am completely okay with that. However, that has only happened once, and the woman who took her vehicle to another shop has subsequently come back and is a customer to this day.
It's not rocket science. You don't have to be the cheapest labor in town; just be super honest and forthright with your customers about each and every cost. And if something goes wrong, like a bad part, don't leave them hanging out to dry. Probably every single person that brings their car in for service is anxious and unhappy because their car broke down, because they probably don't know much about cars and finally because they know, (rightfully so), that most shops are going to bend them over when it's all said and done. I tell my peers that the fact that people hate taking their cars in for service is well deserved. They always laugh at me and say that I am "leaving money on the table". I'm okay with that. I sleep very well at night.
To answer your question: "So, why do you think parts shouldn't be marked up?"
My belief is that I am not in the parts selling business. That is what auto parts stores do. I am in the business of creating/fabricating/fixing cars.
I also say, more importantly, that customers feel ripped off when you charge them $100 for a part that costs you $50 at ______.
You say what's the difference between charging $100 for the part, $50 for labor, (total $150), or charging $50 for the part and $100, (total $150)? My problem with that same example is that greedy shop owners want to charge $100 for the parts while charging $200 for the labor; all the while knowing they are trying to not be transparent about the costs. Which ultimately always leaves the customer with a bad feeling. How do you think a customer feels when they pay their bill, take their car home and their 16 year old son shows them that the exact same part they just got charged $100 for costs $40 on rock auto. So my rhetorical question back is, why not just charge for labor and not try to double-dip the customer on parts. The answer is because the people who have significant mark ups on parts DO want to double, triple, quadruple dip the customer any way they can. And then they try to justify it by saying that they can't keep the lights on unless they **** their customers. They say this right before they leave the shop, go get into their new BMW to drive to their 5000 sq.ft. house on the lake and decide whether they are going to go out on their boat or drive up north to their 5000 sq.ft. cabin on the lake. Don't get me wrong, I don't begrudge people for working hard and having nice things. Just don't try to BS everybody with the "I can't keep the lights on if I don't **** people on parts" argument.
All I can say is that instead of trying to justify practices that most customers find repulsive, just make all your shop costs very obvious and transparent and make your customers happy. But as they know, they will have to cut their profit margin to do this.
Sorry for the long winded post. I am just tired of hearing the "can't keep the lights on", "you're taking food off my kids' table", "I can't make ends meet", arguments on the internet and from my colleagues. Especially, when out of all the shop owners I know, the only ones who are not doing well financially are the ones that are really bad at business, or have an untenable location. The rest are ripping customers and their mechanics as much as they can while trying to justify their practices.
setfocus said:
THANKS GUYS FOR THE KIND WORDS!
To answer your questions Yarpo:
I pay my techs salary, and constantly reinforce quality over quantity. Without a doubt, flat rate drives techs to go as fast as they can and invariably they make mistakes, even good techs. I want my techs to check service procedures, ask questions, use the right tools, learn new things, go to training, etc. and not be afraid of complex jobs. I don't want them to sit there all day thinking of how they can go faster and faster to make a living. Flat rate may have been appropriate back in 1980, when the most complicated thing you were going to do is rebuild a VVC, Quadrajet, HEI or rebuild a trans; but with the complexity of todays cars, flat rate has passed. It's simple, the only people who are proponents of flat rate are shop owners who want to leave their techs holding the bag if work gets slow or the jobs get hard. Some shop owners will say that their techs want flat rate because they can book 15 book hours in an 8 hour day. My response is, (and has been), well if they can do more than 8 book hours why not just pay them salary for what they can do and emphasize quality. Believe me, quality goes sky high and everybody's happy.....except for shop owners that want to push all risk and stress on to their techs, with tangential concern for quality.
With respect to labor rate, I don't have a set labor rate. For simple things I have fixed prices, (oil changes, most brakes, etc.). For more complex repairs, my labor charge is based on the difficulty of the job, which obviously correlates to the time it takes to do the job but I don't charge by "book" time.
For example, changing a bulb is at the bottom end of the spectrum, but doing custom classic vehicle work, complex diagnostics, fabrication or custom PCM's and systems are at the top end. However, I DO use the "book" as a guide for new jobs; but at this point in my career, I have a pretty good idea what's going to be involved in most repairs.
I realize that this sounds convoluted on the internet, but in practice, my customers love it. I ALWAYS charge a diagnostic fee and am very open and transparent about what parts I am using, what they cost me, and how much labor I am charging them, broken down by multiple task, if necessary. I do this so customers know EXACTLY what is wrong with their vehicles and how much they are paying for parts and labor. If they want to compare labor cost and take it to another shop, I am completely okay with that. However, that has only happened once, and the woman who took her vehicle to another shop has subsequently come back and is a customer to this day.
It's not rocket science. You don't have to be the cheapest labor in town; just be super honest and forthright with your customers about each and every cost. And if something goes wrong, like a bad part, don't leave them hanging out to dry. Probably every single person that brings their car in for service is anxious and unhappy because their car broke down, because they probably don't know much about cars and finally because they know, (rightfully so), that most shops are going to bend them over when it's all said and done. I tell my peers that the fact that people hate taking their cars in for service is well deserved. They always laugh at me and say that I am "leaving money on the table". I'm okay with that. I sleep very well at night.
To answer your question: "So, why do you think parts shouldn't be marked up?"
My belief is that I am not in the parts selling business. That is what auto parts stores do. I am in the business of creating/fabricating/fixing cars.
I also say, more importantly, that customers feel ripped off when you charge them $100 for a part that costs you $50 at ______.
You say what's the difference between charging $100 for the part, $50 for labor, (total $150), or charging $50 for the part and $100, (total $150)? My problem with that same example is that greedy shop owners want to charge $100 for the parts while charging $200 for the labor; all the while knowing they are trying to not be transparent about the costs. Which ultimately always leaves the customer with a bad feeling. How do you think a customer feels when they pay their bill, take their car home and their 16 year old son shows them that the exact same part they just got charged $100 for costs $40 on rock auto. So my rhetorical question back is, why not just charge for labor and not try to double-dip the customer on parts. The answer is because the people who have significant mark ups on parts DO want to double, triple, quadruple dip the customer any way they can. And then they try to justify it by saying that they can't keep the lights on unless they **** their customers. They say this right before they leave the shop, go get into their new BMW to drive to their 5000 sq.ft. house on the lake and decide whether they are going to go out on their boat or drive up north to their 5000 sq.ft. cabin on the lake. Don't get me wrong, I don't begrudge people for working hard and having nice things. Just don't try to BS everybody with the "I can't keep the lights on if I don't **** people on parts" argument.
All I can say is that instead of trying to justify practices that most customers find repulsive, just make all your shop costs very obvious and transparent and make your customers happy. But as they know, they will have to cut their profit margin to do this.
Sorry for the long winded post. I am just tired of hearing the "can't keep the lights on", "you're taking food off my kids' table", "I can't make ends meet", arguments on the internet and from my colleagues. Especially, when out of all the shop owners I know, the only ones who are not doing well financially are the ones that are really bad at business, or have an untenable location. The rest are ripping customers and their mechanics as much as they can while trying to justify their practices.
