Earlier this morning, I came across a sample "parts pricing matrix" that is recommended by business coaches for independent auto repair shops.
Independent Shops rely on parts markup as part of their revenue structure. Many shops use a "matrix" which marks up parts based on their cost. Without this, their labor rates would have to be substantially higher than they are today.
This is one reason why some independent shops prefer to use lower cost aftermarket parts instead of OEM; lower cost parts allow for greater mark-up while still allowing the quotes to be competitive with dealerships. Around here, dealerships generally charge 1/3 over MSRP for their parts, but they have slightly higher labor rates.
Link to the source: https://www.autotraining.net/articles/2007-08_MotorAge_Making Parts Profitable.pdf
Independent Shops rely on parts markup as part of their revenue structure. Many shops use a "matrix" which marks up parts based on their cost. Without this, their labor rates would have to be substantially higher than they are today.
This is one reason why some independent shops prefer to use lower cost aftermarket parts instead of OEM; lower cost parts allow for greater mark-up while still allowing the quotes to be competitive with dealerships. Around here, dealerships generally charge 1/3 over MSRP for their parts, but they have slightly higher labor rates.
Link to the source: https://www.autotraining.net/articles/2007-08_MotorAge_Making Parts Profitable.pdf
Last edited: