Parts Mark-Up at Independent Repair Shops

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Originally Posted by Rick505
I always thought when the repair place bought parts at NAPA or dealership, they got the "wholesale" price and marked them up to retail. When I walked into NAPA or dealership I may see a "discount" on the receipt but was actually paying the retail price everyone else paid.


That's exactly how it's supposed to work. Dealerships and parts stores generally give repair shops 25% off list price,in turn the repair shop charges the customer list price for the part along with the labor rate.
 
The dealership I work at Mark up 50% or right at double the cost except batteries wiper blades and filters.
 
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Originally Posted by ZZman
How can a shop not make money on labor alone? They may charge 100.00 an hour for labor and the mechanics get 20-25. 00 an hour.


Not everyone that works at a shop is a mechanic, Even small outfits need 2 people in the office.....A service writer/manager & a receptionist. And I'm sure the owner of the business wants to get paid.

*Rent/Property Tax
*Utilities......You wouldn't believe the expense with a big compressor/Lifts/Welders!!!! No free nights & weekends on a commercial account!!
*Dumpster/Trash pick-up.
*Equipment up-keep & new purchases. Price out a Snap-on scanner update or re-calibrating an alignment machine!!....Then you have parts washing machines & that monthly expense.
*Insurance
*Taxes & fees for workmans comp & unemplyment
*Office supplies
*Toiletries
*Hazardous material disposal
*Linen service
*Here in Texas.....We have to pay a "Use Tax" on EVERYTHING in the shop
*Labor guides/Diagnostic information (Alldata/Mitchell/Idenifix)
*Consumables used in the shop....Razor blades, Cut off wheels, Argon/Co2, Welding wire, Acetylene/Oxygen, Floor dry, Brake clean, Carb cleaner, A/C flush, Air hoses & fittings, Chassis grease, Wheel bearing grease, Brake grease, Solder/Terminals, Butane, Nuts & bolts......The list goes on & on.
*Signage/Advertisement
*Fire extinguishes & their up keep.

Buy & run a automotive repair business......Your tone will change REAL fast! If you buy an established business.....You will have that payment as well!!
 
I owned and ran my own business for 45 years. Started with cars, and evolved into OPE. I stayed small on purpose, so I didn't have to hire help, pay help insurance, and lots of other fees. I and my wife had the largest OPE sales and repair in the county. I always sold parts at mfg suggested retail price or less in a few cases. The highest I ever charged for labor was $48 per hour, and no charge for shop supplies and incidentals like that.
 
What about the costs associated with ordering, stocking, and disposing of parts? That's all included in the markup.
 
I think it is a regional thing.In my area of central Ga almost no one charges extra for parts,.The guys at the garage I mentioned earlier that had different labor rates posted were guys who moved here from Cali.I don't care what your labor rate is...just tell me what the job is going to cost.Truthfully I find it a bit dishonest to jack up the price of parts .Be up front about the job.I understand about the shop not warranteeing parts they don't supply.But I also understand their desire to put the cheapest thing on my vehicle.I don't want the cheapest third world part on my vehicle.I usually buy the mid level parts for my vehicles.On the vehicle in question in that case I had researched the forums on that model vehicle and gleaned what was the best regarded parts and that was what I ordered.I wanted the repair to last.

The mechanic I currently use pretty much follows those guidelines.He warranties stuff that he supplies .he usually gets the silver/mid grade parts.He has no problem if you supply the parts,his job rate(labor quote) does not change either way.If you call him and ask for a quote he will tell you his labor cost and that parts will be whatever the supply house charges or you can furnish them.He has more business than he and his helper can handle.
 
Originally Posted by clinebarger
Originally Posted by ZZman
How can a shop not make money on labor alone? They may charge 100.00 an hour for labor and the mechanics get 20-25. 00 an hour.


Not everyone that works at a shop is a mechanic, Even small outfits need 2 people in the office.....A service writer/manager & a receptionist. And I'm sure the owner of the business wants to get paid.

*Rent/Property Tax
*Utilities......You wouldn't believe the expense with a big compressor/Lifts/Welders!!!! No free nights & weekends on a commercial account!!
*Dumpster/Trash pick-up.
*Equipment up-keep & new purchases. Price out a Snap-on scanner update or re-calibrating an alignment machine!!....Then you have parts washing machines & that monthly expense.
*Insurance
*Taxes & fees for workmans comp & unemplyment
*Office supplies
*Toiletries
*Hazardous material disposal
*Linen service
*Here in Texas.....We have to pay a "Use Tax" on EVERYTHING in the shop
*Labor guides/Diagnostic information (Alldata/Mitchell/Idenifix)
*Consumables used in the shop....Razor blades, Cut off wheels, Argon/Co2, Welding wire, Acetylene/Oxygen, Floor dry, Brake clean, Carb cleaner, A/C flush, Air hoses & fittings, Chassis grease, Wheel bearing grease, Brake grease, Solder/Terminals, Butane, Nuts & bolts......The list goes on & on.
*Signage/Advertisement
*Fire extinguishes & their up keep.

Buy & run a automotive repair business......Your tone will change REAL fast! If you buy an established business.....You will have that payment as well!!





This. I work for a small 2 location Indy. We do good business, but we're small in the grand scheme of things. That list right there? Laminate that and post it. And then some.

Just this past weekend both my alignment rack AND one of my hoists went down. Luckily we were able to fix the rack on site, the hoist will be an easy $1k bill to replace some cables and pulleys. That's just an average Saturday, at that.

As for standing behind our work, we just replaced the cam phasers on a customers F150 Ecoboost at no charge for labor, even though we had just done the primary timing chain and offered to do the phasers at that time, due to Ford recommending it be done in a TSB. Because there was no "obvious" problem with the phasers, he didn't bite. 3 months later and he's back with timing codes and rattling in the heads. SHOCKER the phasers failed. We still took care of it. Yes, he paid for the parts with standard markup (somewhere around 2x), plus shop supplies and fluids, but he got 9+ hours of labor (@$120/hr) for free.

Small shops still try to earn their business, but it's a thin line between making a profit and keeping the lights on.
 
Originally Posted by JeffKeryk
Just part of the business. If you have a shop that takes care of your car and you, you should stick with them and be happy they are there for you.
Their knowledge, tools and expertise is worth a lot.

yes
 
Originally Posted by ZZman
How can a shop not make money on labor alone? They may charge 100.00 an hour for labor and the mechanics get 20-25. 00 an hour.


Do it out of your garage or barn this simple logic applies. Once a building gets involved rented or owned the expenses start to fly up.

You expect someone to answer a call during the day or inform you on progress you just added another $10-15/hr cost. I put up with slow communication because my $60/hr mechanic is solo. He does not answer phone or deal with it till end of day.
 
IMO I have no problem paying the retail price for OE parts because in my world OE parts have a 2 yr warranty. I just don't want to pay OVER retail. IMO with some brands the cost difference is shrinking between the dealerships and Indy shops. The costs of running the operation and having the equipment as well as the personnel with the necessary skill set to work on the vehicles is just getting higher every year.
 
I work in construction . We only figure 10% overhead + 10% profit , on parts , when I bid a job .

Wish we could get by with charging what some other trades / businesses charge .

I always guessed most mechanics doubled the cost of parts ?
 
Originally Posted by WyrTwister
I work in construction . We only figure 10% overhead + 10% profit , on parts , when I bid a job .

Wish we could get by with charging what some other trades / businesses charge .

I always guessed most mechanics doubled the cost of parts ?


Every industry gets to set their own rules, I guess. Probably comes down to the amount of competition, perhaps entry cost matters too. Mechanics have high overhead (need a garage space, lift, high ceiling, lots of tools). Probably some element of "how it's always been done" is employed too.

In the end, shouldn't it be the total bill that matters? [Assuming quality parts and service.] Just like when you buy a car at a dealership, all about the OTD price. Who cares if they gave you peanuts for trade-in when they took a big chunk off the sales prices. It only hurts if you analyze the sale on each line item.
 
Originally Posted by edwardh1
Originally Posted by JeffKeryk
Just part of the business. If you have a shop that takes care of your car and you, you should stick with them and be happy they are there for you.
Their knowledge, tools and expertise is worth a lot.

yes


Not to some who drive all over town to buy nearly free oil........
 
We had a plumber complain once of our labor rate ($100/hr)... someone who charges $100 just to show up and maybe $40k invested in truck/tools. Compared to an indy with a building and 150k+ in tooling/equipment. There's markup in parts... simple as that, part of the business. In addition part cost is always the lowest from our supplier (compared to online), but they provide delivery (same day) and warranty/exchange parts.
 
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