Reasonable Parts Markup?
- Thread starter kythri
- Start date
LOL, of course book times don't apply to restoration. However, I DO have a couple of old "MOTOR" time books from the 60's and 70's. No, I wasn't in business then, I just got them from friends that were.
But to be clear, as I said above, I don't use book time that often; whether I'm working on a 2016 Porsche or a 1966 Chevelle.
The second question/statement is a little ambiguous. To be clear, I will not charge ANY profit on parts, whether it's a part for the 2016 Porsche or the 1966 Chevelle. I will only charge what it costs me to get it.
For classic car parts, most of the time I know where to find them so I don't need to charge time to find them. However, if I do have to invest time in finding parts or traveling to get them, I WILL charge for the costs associated with that. Or I will task the owner with picking up the parts if they want, (which most enjoy doing).
I will NOT, however, make a profit off of the parts procurement process. And if the parts procurement process is not straight forward, I am VERY transparent with the customer about my costs and what I am charging them for.
Once again, in my experience, all you have to do to have happy customers is to be brutally honest and give them as much information as they want about every little detail of the process. Some want to watch and ask questions, (which is fun and I enjoy it), and some don't even ask how much it will cost until they pick up their car.
I think maybe the diversity of posts from shop owners corresponds to how they view their businesses. Some people love working on cars, so they enjoy going to work every day and running their businesses. And some others simply are business people that view an auto repair shop as a cash register to pull money from. I have a couple of friends who own large shops in the area, who are not car guys, and are always bitching about going in to the shop. I feel bad for them.
Last edited:
mcj115
Well-known member
One piece not to overlook in this whole pricing comparison is the authenticity of the parts. Fakes or counterfeit auto part are rampant on Amazon, ebay, and other no name online vendors. Sure they can offer a OE/OEM looking part at a fraction of cost of traditional suppliers but the the part authentic? I've seen it with Motorcraft (Ford), Moog (suspension), SKF (Bearings) and more where it is just a repackaged cheap import part probably not made to any quality control standard.
Give credit where credit is due. He runs a business model that eliminates the practices widely viewed as unfair or unethical by customers.
Sent from my iPhone using The Garage Journal mobile app
As a general contractor I charge a flat 15% on most materials that's 15% above my cost not some made up cost that I pull from a pricing structure. If it cost me $100 I charge you $115 period. This usually covers costs associated with procuring materials mainly fuel and paying a driver.
richfinn
Well-known member
So if your marking up those classic car restoration parts to cover your expenses locating them, shipping them in
covering your fuel costs to go collect them, what's the difference??
Most guys on this Forum are car and motorcycle guys who love fixing them, a lot of us are serving or ex vehicle technicians who have no interest in ripping people off
The "flat rate/book time/marked up parts" system was introduced before most of us were born
Credit to you for finding a way that works for you, but that doesn't automatically make "the system" redundant
In fact many customers still insist and rely on it
Just for clarity I'm not a business owner, in fact the 130 year old company I work for dont even charge labour!!!
We do mark up parts though and use trade accounts/discounts
I am been marking up parts since '95, all the time looking up parts, ordering them, returns, core exchange etc. That all takes time away from turning wrenches and billable hours. Plus credit card fees when they pay the bill, or some customers take 30-45 days to pay. I will say you can mark up parts 10-25 percent, to cover those expenses and time , without your customer feeling he got taken advantage of.
richfinn
Well-known member
Yep, good luck to him for making it and doing it his way
My point is that not everybody who follows the conventional route is automatically a rip off merchant because they mark up parts to cover fair business expenses
Last edited:
NAPA's entire business is built around acquisition, storage, transport and distribution of the parts.
NAPA actually expends resources to do all of the above, and have the parts local (or semi-local).
If I wish to avail myself of NAPA, NAPA's markup isn't unreasonable because of all of those factors.
A repair shop that calls NAPA for the part does none of that, has expended nothing more than their phone call - and, in most cases, is paying less to NAPA than the customer would.
It's apples and oranges.
Ah, yes, because the repair shop manufactures parts, so this is why we should pay them markup. NOW I UNDERSTAND! Thank you for supporting why a repair shop should not be marking up parts.
signcrafter
Well-known member
- Joined
- May 9, 2012
- Messages
- 12,320
Bingo. So getting your parts you charge parts and labor. Other shops just charge for the part and no labor but mark the part up a percentage. Like my last post said, in the and a shop has to make x amount of dollars to keep the doors open. Just different shops write different things on the bill to get to that x amount of dollars.
It's really no different then any other business. Each business has it's own model they use. Some businesses use the model of listing all items at full list and then doing big 30 or 40 or 50 % discounts to make it look like a huge sale. Some businesses just do a small mark up and that's your price. In the end it really doesn't matter how you get to it as long as the total price is a good deal.
In your case you charge a customer for your time to get the part. So do other businesses. They just mark the part up and that covers their time. No matter what you can't please all customers. If you charge 100 bucks an hour for your time and it takes an hour to get a part and you write that on your bill you will have a customer complain at some point that you are ripping them off for charging for your time to get that part. Now you left that part out in your previous posts about never ever marking a part up and everybody was praising you. So now when you tell them you never ever mark the part up but do charge them for the time to find and acquire said part they probably won't be as happy as when you left that detail out.
Like I said, in the end it doesn't really matter how you come up with the total bill, but the total is all that really matters. Another example would be shop fees. Most customers hate that term and think it's a rip off. So you could say that your shop never charges shop fees but then charge for every little item. And say you need a few squirts of brake cleaner, do you now charge them for a whole can? Shop fees are just an easier way to charge each job a couple bucks for things you can't really bill for or would take up a whole page billing each little thing or would be hard to estimate how much sealant, or adhesive, or loctite, or whatever you use. Again, in the end it doesn't really matter what is on the bill, it's the total price that matters and each shop will have their own business model to get to that total. Doesn't mean one shop is a rip off just because one line item is higher then another shop's when first shop may not have additional line items on the bill(like your time to acquire a part vs just charging a markup). In the end the first shop may charge a higher mark up on parts but because that shop doesn't charge for time to acquire part their bill may be cheaper then the second shop. But people will ***** about every little thing when they can and will always think they are being ripped off.
richfinn
Well-known member
What about when they dispatch the wrong part, or you open the box and the part is broken or if there is a core to return or you have to pay someone to recycle the old part or heaven forbid the part fails 3 weeks later??
If the mark up is fair to cover expenses, it's fair to pass it on to the end consumer
It's not all profit!!!!
kctyphoon
Banned
You can literally tell the different perceptions people have of their customers simply by reading through this thread. You have one guy telling people that he goes out of his way to be honest and upfront, doesn't employ any devious tactics to try to squeeze more money out of clients, and has a successful business with repeat customers and happy employees that are not under pressure for mass production. Plus - with all that - is claiming he's STILL not the cheapest shop around.
Then you have some other people that state if their customers aren't happy with their final bill, it's THEIR fault for not doing research to "find out" on their own, how much the markups on parts were going to be, and they should just accept that if they are paying by the hour, they may be charged for extra hours of labor not performed - cause their book says it's ok. AND - if you don't like it - don't own a car...
One guy is servicing people, and others are servicing cars.. Yet here we are on a forum full of anonymous people, and one party has people WANTING to bring their business to him.
And you wonder WHO is giving the auto repair Industry a bad rep?
I don't understand the failure to realize that above anything else, people just don't wanna leave feeling like they've been taken advantage of. And if they state "I feel like I'm being taken advantage of" typically those people don't wanna be told "well then don't own a car".
Then you have some other people that state if their customers aren't happy with their final bill, it's THEIR fault for not doing research to "find out" on their own, how much the markups on parts were going to be, and they should just accept that if they are paying by the hour, they may be charged for extra hours of labor not performed - cause their book says it's ok. AND - if you don't like it - don't own a car...
One guy is servicing people, and others are servicing cars.. Yet here we are on a forum full of anonymous people, and one party has people WANTING to bring their business to him.
And you wonder WHO is giving the auto repair Industry a bad rep?
I don't understand the failure to realize that above anything else, people just don't wanna leave feeling like they've been taken advantage of. And if they state "I feel like I'm being taken advantage of" typically those people don't wanna be told "well then don't own a car".
Last edited:
A slight markup to cover costs of obtaining a part is not my issue. In most service industries business expenses are rolled into labor rates.
If a shop marks up parts to cover business expenses but reduces labor rates accordingly, I don't consider that a rip off. I do think it is deceptive billing and question why a shop would do this. Why not just be transparent about what you're charging for?
If a shop marks up prices under the pretense of covering business expenses but also rolls those business expenses into their labor rate and charges additional fees for "shop supplies" which are business expenses that supposedly were already rolled into parts and labor... that is ripping people off.
Sent from my iPhone using The Garage Journal mobile app
kctyphoon
Banned
What about when NONE of that happens?
Nobody is really complaining about a marginal markup on parts to cover expenses. You guys keep trying to shift the debate to "all mark-ups". We/They are talking about steep (doubling prices) that goes far beyond "covering the expenses"
Last edited:
Putting all costs into labour rate is a stupid concept .
If you have work done not requiring parts you want be paying higher labour cost incorporating costs your job doesn't need.
Same for shop supplies, while some load is incorporated into rate including everything is not fair way of doing it, those jobs that use more materials should rightly be billed for it .
Absolute no scam in part markup or billing some materials when used in excess on particular job scenarios, only issue is some abuse it and that happens in all walks of life unfortunately .
If you have work done not requiring parts you want be paying higher labour cost incorporating costs your job doesn't need.
Same for shop supplies, while some load is incorporated into rate including everything is not fair way of doing it, those jobs that use more materials should rightly be billed for it .
Absolute no scam in part markup or billing some materials when used in excess on particular job scenarios, only issue is some abuse it and that happens in all walks of life unfortunately .
dr_clyde
Well-known member
You can literally tell the different perception people have of their customers simply by reading through this thread. You have one guy telling people that he goes out of his way to be honest and upfront, doesn't employ any devious tactics to try to squeeze more money out of clients, and has a successful business with repeat customers and happy employees that are not under pressure for mass production.
Then you have some other people that state if their customers aren't happy with their final bill, it's THEIR fault for not doing research to "find out" on their own, how much the markups on parts were going to be, and they should just accept that they may be charged for extra hours of labor not performed - cause their book says it's ok. AND - if you don't like it - don't own a car...
And you wonder WHO is giving the auto repair Industry a bad rep?
I think you're making some people out to be greedy A-holes that only care about profit when that's probably not the case.
Most people don't just drop off their car and say, fix it and send me a bill. They ask for a price up front. They agree and work commences or they don't and they find a different shop or a different tactic. Its not like they're ripping every single customer a new one every chance they get.
Most times book time is a very accurate representation of real time, and is a fair number. Usually within 30 minutes or so. It keeps repair costs pretty level across the board, shop to shop.
However, if you work for a dealership or shop that specializes and see lots of repairs of the same kind (warranty for instance), you can get much faster at repairs than book time. Either you bought specialty tools that speed it up, or you have the experience and know how to get it done faster. Why should you get less money for being better at the same job?
An ship's engine was not running well, and the ship's mechanic was at his wits end with it. He calls a specialist out. The specialist says "I can fix it for you, it will cost you 5 grand." The ships owner says "Ok, please fix it." The specialist pulls out a small hammer and taps a component on the engine and it begins to run perfectly. He hands the owner a bill for 5 grand and the ships owner howls in complaint. "I'm not paying you 5 grand, it only took you 30 seconds to fix it!" The specialist grumbles, and hands him a new bill, itemized as following. "Tap engine with hammer. $5. Knowing where to tap, $4995."
The point of the parable is knowledge and skill is rewarded, and if a job is known to take X hours, and the average mechanic can do it in X, then a really good guy comes along and can do it in less time than X, he still deserves the pay for X.
If you think that flat rate is cheating or is somehow a ripoff because it rewards skill, speed and competence, then we will never see eye to eye.
Every competent and fair shop has customer permission to proceed up to a given price, agreed upon before the job. If they find something they didn't see, or needs to be addressed separately, they will call to authorize further repair.
If a shop can complete the job in less time than the already agreed upon price, you think that the shop should give up their profits from being speedy, skilled and knowledgeable just because they beat the book time?
A quoted price is a quoted price. How I get there is none of the customer's business, unless it was already agreed upon that the quote was in fact a rough estimate, and the job was to be done time and materials.
If you do a T&M job, ESTIMATE 4 hours and do it in 2, and still bill for 4, then yeah, you're a liar and a cheat. But if you QUOTE a price, and bill for what you quoted, its none of anyone's business how fast you completed your work.
Nomenclature and how you present billing practices are IMPORTANT in business.
kctyphoon
Banned
I don't think I need to make people out to be anything.. I think they are doing a good job of that all on their own.
finn
Well-known member
Mixed emotions on this one:
Bought a new to us house in Tucson to escape winter. Samsung washing machine would throw an error code when washing with hot water. No code if using cold. Called a local one man appliance repairman. He showed up within 48 hours. Told him it was probably a defective solenoid of some sort, although I know nothing about washing machines, and prefer to keep it that way. He concurred and replaced the valve with one he had on the truck. $48 parts and $75 service call. Checked later and the part was $12 on the Internet plus, I think, $5.00 ship.
I am completely satisfied with the 4x markup over what I could have sourced the part for. Service was good, and the fact that he didn’t have to make a run to his wholesaler and another trip to install the part made for a happy customer .
Rear brakes on my F350 dually. I ordered rotors and pads from Rock Auto. Local shop charged me labor only when I ran out of time to do the job. Also charged me list price for a wheel seal , backing plate, and caliper. They included the invoice which showed what they paid the jobber for the parts and the retail, which I paid. No issue to me, as they had to tie up the lift while the parts were being procured, which cost them shop productivity.
Same shop, clutch replacement on my Chevy plow truck. I ordered the clutch from Rock Auto. It was dripping oil from, I thought, the rear main seal. They put the truck on the lift, pulled the trans, and determined it was a rusted pan. I had a brand new never used pan that I bought at a swap meet, probably for some long forgotten project,and they gladly installed it. They also replaced a couple of freeze plugs, again at full retail. They asked me to bring the flywheel to the machine shop, about a sixty five mile round trip. No problem, and they knocked some off the original quote.
Same truck, spark plug replacement: first quote was $1000. ($100/hole) for the v10. This was a different shop. Second shop was time and materials, @$75 /hr. More than fair. I provided the plugs, they provided one coil, at full retail. More than fair. I think they charged three hours, including one broken plug.
Even my local Chrysler dealer caught me by surprise when they asked me if I was going to provide my own filter for an oil change. When I had a unit bearing and ball joints replaced there, they charged full retail for the parts and I was ok with that. They had previously installed rotors and pads I had procured when they did the other unit bearing. Basically, they procure parts, I pay full boat plus $125/hr labor at book time. I provide parts, they charge time and any materials they provide.
This is a small town in Michigan, though.
Bought a new to us house in Tucson to escape winter. Samsung washing machine would throw an error code when washing with hot water. No code if using cold. Called a local one man appliance repairman. He showed up within 48 hours. Told him it was probably a defective solenoid of some sort, although I know nothing about washing machines, and prefer to keep it that way. He concurred and replaced the valve with one he had on the truck. $48 parts and $75 service call. Checked later and the part was $12 on the Internet plus, I think, $5.00 ship.
I am completely satisfied with the 4x markup over what I could have sourced the part for. Service was good, and the fact that he didn’t have to make a run to his wholesaler and another trip to install the part made for a happy customer .
Rear brakes on my F350 dually. I ordered rotors and pads from Rock Auto. Local shop charged me labor only when I ran out of time to do the job. Also charged me list price for a wheel seal , backing plate, and caliper. They included the invoice which showed what they paid the jobber for the parts and the retail, which I paid. No issue to me, as they had to tie up the lift while the parts were being procured, which cost them shop productivity.
Same shop, clutch replacement on my Chevy plow truck. I ordered the clutch from Rock Auto. It was dripping oil from, I thought, the rear main seal. They put the truck on the lift, pulled the trans, and determined it was a rusted pan. I had a brand new never used pan that I bought at a swap meet, probably for some long forgotten project,and they gladly installed it. They also replaced a couple of freeze plugs, again at full retail. They asked me to bring the flywheel to the machine shop, about a sixty five mile round trip. No problem, and they knocked some off the original quote.
Same truck, spark plug replacement: first quote was $1000. ($100/hole) for the v10. This was a different shop. Second shop was time and materials, @$75 /hr. More than fair. I provided the plugs, they provided one coil, at full retail. More than fair. I think they charged three hours, including one broken plug.
Even my local Chrysler dealer caught me by surprise when they asked me if I was going to provide my own filter for an oil change. When I had a unit bearing and ball joints replaced there, they charged full retail for the parts and I was ok with that. They had previously installed rotors and pads I had procured when they did the other unit bearing. Basically, they procure parts, I pay full boat plus $125/hr labor at book time. I provide parts, they charge time and any materials they provide.
This is a small town in Michigan, though.
Last edited:
dr_clyde
Well-known member
The market does a pretty good job weeding out bad businesses and people.
That's a big negative. No way I would ever work on cars in a salaried position, especially for $20/hr.
I'm perfectly happy with my way more than $20/hr and flat rate, as to parts mark up I have zero control over that- that is the parts dept.
TOTO
Well-known member
So. If I understand correctly you would pay them for hours they didn't work. Interesting
chevy302dz
Well-known member
So. If I understand correctly you would pay them for hours they didn't work. Interesting
Not really, Negotiating a minimum # of hours to be paid up front is very different then getting a bill for what appears to the customer to be a gross overestimate after the fact. Please note I am not debating the merits of flat rate just the above statement that happened to be there when I finished reading the thread.
dr_clyde
Well-known member
This is a HUGE and very important distinction.
No one ever suggested putting all costs into labor.
Bill the cost of parts and obtaining them as parts.
Bill shop supplies as shop supplies.
Bill labor and the overhead for labor as labor.
Don't markup parts to cover overhead that was already rolled into labor costs and roll shop supplies costs into labor when you bill separately for it.
If the bill truly works out the same in the end why be deceptive? That's what makes it look like a scam.
Sent from my iPhone using The Garage Journal mobile app
2ndGearRubber
Well-known member
Yeah, $20 an hour is my bare minimum guaranteed pay check. If I'm working on cars doing anything, making $20 an hour I'm not pleased. Not going to be killing myself for that wage either.
I can promise I wouldn't be spending thousands on tooling and equipment, going to training at my cost, etc. if it's not going to benefit me financially. Why buy the tools to go faster? Just burn up the clock like everyone else and make sure the cream never rises to the top.
I'm not sure anybody in this thread said mechanics should be paid salary to the equivalent of $20/hr...…
But putting that aside; so what you are saying, is that if you are working as fast as you can to make $100000 per year flat rate, you would rather do that than make $100000 per year salary, while concentrating not on going fast but on doing the job right? Hmmmm. Interesting. I've never met a mechanic that would agree with you. But good luck to you.
I suspect the reason you say that is because you've only dealt with shops that are offering you "$20/hr." salary, which are coincidentally the same shops that are charging profit margins on their parts. Once again, they are looking to make money off of EVERYBODY, (including mechanics), ANYWAY they can, (low pay, low benefits, parts margins, inflated labor, ambiguous service charges, shop supplies, etc.).
Now let's stir things up and talk about the people that charge a percentage of the bill for shop supplies. How many gloves, shop towels and brake clean does it take to do a brake job? LOLOLOLOL.
GO!
Volvotechdude
Well-known member
To the OP who I hope is still following. The simple answer is the markup is whatever the market will support. All opinions given in this thread are based on subjective opinion. I've read your original post several times over and see that there wasn't any mention of getting a breakdown of the bill before hand. Is this true? At my dealership people are given a quote via text, e-mail and phone call. If they don't like the quote or have an issue they can decline or ask question's. Nothing is done until they say it's ok. The fact you had an issue after is partially on you not taking a look. Did you go back in talk to them about the part's cost?
It was mentioned all overheads should in labour, that not a good or fair practice .
Those of you who find shops being deceptive need either deal with the shop when presented the bill and it differing from approved work/pricing or find new shop or preferably both .
parts/material labour the normal billing and only consumable if used in excess . My parts are marked up and have been since I opened the shop, only fair way of doing it and I never had one direct complaint due to mark up, A lot of time/experience can go into sourcing good parts along with a staff member that handles some of the process and part liability cover and capital in some parts stock .
Insinuation it underhand scam and only motor trade is rather blinkered from my life experience .
Last edited:
TOTO
Well-known member
I'm not talking about after the fact. If a customer agrees to a price (Parts/Labor) "up front" then they should pay the agreed upon price when the work is done. How long it took is arbitrary.
My statement was directed at the comments about people getting paid for hours they didn't work. It can because of contract language, finishing a job early or some other ways. Is one any different then another.
Post #17.
And no, I have never been offered a salaried position period. Nor would I ever take one. I work 3-4 days a week, make plenty, and pay zero for insurance premiums. Non-union shop.
richfinn
Well-known member
Agreed, a fair mark up I believe is 10-20% on an OE or genuine part, which is usually your trade discount so you can sell the part at full retail value
I dont think mechanics should have to pass trade discounts on to retail customers, we have worked hard done the training and bought the tools of the trade
I dont see a 50% mark up unless your selling the part for more than you can buy it from Main Dealer
Unless your buying junk and selling at the genuine parts price
Or your buying so much stuff you get a 50% discount
Last edited:
richfinn
Well-known member
On those days when everything goes smooth and you dont have to fool around sorting out incorrect or broken parts, or used parts in new boxes returned by unscrupulous DIYers??
On those days you take the mechanics out for a beer or ice cream, because you still only charged the customer the recommended retail price of the parts and haven't ripped anybody off
richfinn
Well-known member
WittHay
Well-known member
This thread is about tools. The people who complain the most are the pro Harbor Freight, Rock Auto, anti Snap-on crowd. The exact people who cant even afford to walk in to a shop that doesnt have much parts markup.
Pictures of a custom shop where you can supply your own parts and they dont really mark up parts. Because every body knows each other in a small community, parts suppliers, hot rod shops, rebuilders
Shop has about 6 Snap-on and Mac boxes. You have to remember this whole thread revolves around $30. You start complaining about $30 in a honest shop like shown in the pictures, you will be escorted to the door in short order.
They might do a tie rod job on a daily driver for reasonable but thats because there is a $10,000 job 2 bays over
Pictures of a custom shop where you can supply your own parts and they dont really mark up parts. Because every body knows each other in a small community, parts suppliers, hot rod shops, rebuilders
Shop has about 6 Snap-on and Mac boxes. You have to remember this whole thread revolves around $30. You start complaining about $30 in a honest shop like shown in the pictures, you will be escorted to the door in short order.
They might do a tie rod job on a daily driver for reasonable but thats because there is a $10,000 job 2 bays over
Attachments
Last edited:
bob15
Well-known member
WittHay, is that squarebody an 8' bed? Gasser or diesel?