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Typical parts cost markup

Discussion in 'Other Off Topic Forum' started by greg512tr, Jan 29, 2004.

  1. greg512tr

    greg512tr Formula Junior
    Rossa Subscribed Owner

    Feb 19, 2002
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    Greg B
    What is a fair parts cost markup that I should expect from an independent repair shop? I was charged $680 for a part that is available from Tweeks for $300. The shop owner told me I should not expect him to sell me parts at cost. I told him I don't expect to be bent over either. What is fair?
     
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  3. robiferretti

    robiferretti F1 Rookie

    Oct 31, 2003
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    if you knew the actual "cost" of most of the things you have bought in your life, your ass would hurt
     
  4. Jay GT4

    Jay GT4 F1 Rookie

    Oct 16, 2001
    4,995
    La mamma dei fessi
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    e sempre incinta
    ASSume the position! No lube.
     
  5. greg512tr

    greg512tr Formula Junior
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    Feb 19, 2002
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    Why does the garage ASSume they should get over 100 percent return on just ordering a part??? No carrying cost...no inventory...one phone call.
     
  6. PSk

    PSk F1 World Champ

    Nov 20, 2002
    17,673
    Tauranga, NZ
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    Pete
    A garage buying a part from a parts supplier should be charging you the retail price that is all. They make their money on the labour. Just make sure you have paid the retail price and then all is fair.

    If he has to store the part, etc. that is different.

    If you were quoted a TRADE price from Tweeks, then Tweeks has mislead you ... and yes there is a large mark up.

    Many spare parts places charge whatever they think they can get for the part, and if you are after a rare Ferrari part ... yep bend over!. It all depends on how honourable the place is ... but I know of one parts place that (used to) think it is a joke and the extra money they make they spend on beers for the Friday evening piss up.

    Pete
    ps: I miss my parents owning a car repair garage ... no more trade prices :(
     
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  8. Jay GT4

    Jay GT4 F1 Rookie

    Oct 16, 2001
    4,995
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    e sempre incinta
    They ASSume that because we drive these cars we don't know what things cost, or that price is relative to us. I agree with you 100%. Just today I got quoted $143 + shipping and duty for the 3" long accordian tube that goes from the intake to the oil cooler, come on...if it was any other car it would be $14.30 but as soon as you say the "F" word....Bend over!

    The Ferrari effect happens, you move the decimal over to the right.
     
  9. greg512tr

    greg512tr Formula Junior
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    Feb 19, 2002
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  10. redhead

    redhead F1 Rookie
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    Dec 26, 2001
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    Automotive =~20-40%

    Computer =~200-400%

    Cost of keeping the doors open =
     
  11. thecarreaper

    thecarreaper F1 World Champ
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    Sep 30, 2003
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    I NEED A JOB
    i have one rule in life, this was learned from my friends father, Dirty Charlie Stevens, the drag racer. " thou shalt never, ever pay freaking retail" ... but sometimes ya have to as a matter of life!
     
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  13. redhead

    redhead F1 Rookie
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    Retail is what the retailer makes it. I will sell you anything for retail, as long as I can mark it up 20% up to give you 20% off.

    Welcome to the world of Wal-Mart and Best Buy.
     
  14. dm_n_stuff

    dm_n_stuff Global Moderator
    Global Moderator Lifetime Rossa Owner

    Dec 10, 2003
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    Interestingly, I had a talk with my Brit mechanic about this the other day.

    His explanation was pretty straightforward. Cheap parts get big markups (200-300% for screws, nuts bolts, etc.) and expensive parts get varying markup, depending on how hard they are to find. If he spends an hour locating a part for a '50's vintage Jaguar, he has to recoup the cost of that time ($75-90/hour) that he could have spent actually doing mechanical repairs. 10% is his minimum markup, for parts he knows and gets easily. His average is about 30-40% for parts over $100 as he tends to order parts in batches, to save time and expense.

    For older cars, (I'm not familiar with parts on newer cars as they seem to be "free" with the extended warranties my new cars have) there is a list price in many Moss Motors catalogs, or in Ferrari's case, I guess Ferrari UK would fix the price. But, who knows how much discount the mechanic can get on those, right? So markup there is tougher. But, I suppose list is all they should charge.

    Finally, if you consider supplying parts most mechanics will not allow it. My Brit guy does it, but he charges more to put them in. (Although I get a pass on the upcharge because of stuff (printing) that I do for him.
     
  15. Kds

    Kds F1 World Champ

    Markup is also a function of resale volume.

    If it costs "X" to manufacture a part that they will sell for "y"............"y" can have a 10% or 300% markup depending upon it's percieved future sales volume to offset the costs of manufacture, storage, shipping....etc...etc............among other things.

    Also...there is what I call the "insurance factor".........manufacturer's IMHO price certain commonly stolen parts higher then logic and reason dictate. Wheels...seats and stereos come to mind..............and your insurance company pays.

    The mechanic I use will install the parts I provide (obtained at cost naturally) but he will only warranty his labor, and I have to wait for his other "retail" jobs to be done first before he works on my car. Fair enough IMHO.
     
  16. Prowler

    Prowler Karting

    Jan 10, 2004
    149
    Glendale,Arizona
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    Matt
    in my line of work typical is from 15 to 35%.

    retailers can sell anything they want for anything they want to.some parts can come in with a wrong price from the factory.the price you paid might be something like that.you could call a couple few other dealerships to ck on the price to see it you were bent over.it doesn't matter where or how a shop comes across parts....there will always be a markup of somekind on them.
     
  17. gabriel

    gabriel Formula 3

    Do remember that the delaer is a reseller, and gets it more cheaply than retail, e.g. Fuel pump at my local F-dealer = $500 vs importec = $216, and that does not take into account the fact that they do not even pay near $216 for the thing...
     
  18. Prowler

    Prowler Karting

    Jan 10, 2004
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    Glendale,Arizona
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    Matt
    also...don't forget.....aftermarket is just that.aftermarket is usually cheaper because it is made cheaper.
     
  19. CraigFL

    CraigFL Formula Junior

    Jan 17, 2001
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    Panama City, FL
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    Craig
    An independant repair shop can charge whatever it wants for a part. This is somewhat self regulated by what customers will pay-- If too high a price is charged, customers will go somewhere else...

    Most business owners, including myself, have various markups for different kinds of parts and services. Businesses choose to include their overhead costs wherever they see fit -- in the labor or the parts.There is also a certain amount of consideration for the marketplace and local competition too.

    If you look at any specific part of the transaction, you may find you can get it less somewher else. The key here is that I add a value to the job that my customers like and that's why they come back.

    Because of the ease of internet shopping/pricing, people can do wider and quicker searches for items and maybe find things less expensive turning what was once specialty items into commodity items. Although I usually can buy things for less, with the internet, I am able to see that individuals can sometimes buy these items for less than I can because of volume purchasing by the suppliers.

    The key question you need to ask yourself is:

    Did this repair shop do a quality job for a fair price, considering the complete job price, and will they support you and their work in the future?

    If your answer is yes, you probably should be satisfied. Remember, you may have been able to buy a particular part cheaper somewhere else but then you would be putting it in-- not them... You also could have found someone to do the job for less but they may not offer you the same value added service.
     
  20. gabriel

    gabriel Formula 3

    >aftermarket is usually cheaper because it is made cheaper.

    Yes, no doubt, but what I am referring to are the exact same items. Almost no one makes aftermarket parts for Ferrari, except for interchangable items such as wheels & carpet.

    Craig, I do agree with what you are saying. In my case it was the shop estimate for installing 2 fuel pumps, 2 filters, 4 hours labor and whatever "value" they ascribe to their work equalling $2000.00 more or less.

    Or, you can look at it my way. Total equaled $216.00 period. It did take me more than 4 hours, but I still stand behind my own repairs. :)

    However........if your time is worth everything to you, and/or you don't care what it costs (and I believe that is part of the whole equation vis a vie the Ferrari owner & shop) then well, whats the difference? $1800 don't mean anything to that type of owner. - However an 200% + markup on the same item is too much.
     
  21. Jason W

    Jason W Formula Junior
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    Oct 31, 2003
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    My aftermarket gets 0% markup.
     
  22. 62 250 GTO

    62 250 GTO F1 Veteran

    Jan 9, 2004
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    I get my parts for my 924 at cost to the dealer and free shipping as long as I wait a week for the next shipment. I also pay 25 bucks an hour. What are the chances I can find a Ferrari mech for those prices?
     
  23. CraigFL

    CraigFL Formula Junior

    Jan 17, 2001
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    Panama City, FL
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    Craig
    The other thing you need to consider is that most dealers have spare parts inventory to service their regular customers and are not in the business just to sell parts. They may actually being trying to discourage this type of sale. My business is the same way. I only stock what I need for my regular business and if I sell one of these parts to a person that wants to fix it on their own, I now have to reorder for my stock again. It's not that I don't appreciate the business but a part sale doesn't bring the profit that a service call using that part does. In my business I just don't sell a lot of parts so I don't want to increase the price of parts just for parts only sales.

    P.S. I do all the work on my 328 so I generally look for the best deal on the part and use my $0/hr labor cost...
     
  24. Slim

    Slim Formula 3

    Oct 11, 2001
    1,735
    Pacifica, CA, USA
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    richard
    Looking for parts is not $90/hour work. It's work for a high school kid or secretary for which they should be paid $10/hr max. Sure, the owner knows the places to look but instead of doing so everytime, he should spend a few hours getting that info into the computer and a few seconds each time saying to the junior staff "i'd bet so and so will have it". If not, the kids can use the phone and internet as well as anyone else.

    -Slim
     
  25. CraigFL

    CraigFL Formula Junior

    Jan 17, 2001
    954
    Panama City, FL
    Full Name:
    Craig
    The rate you PAY the high school kid may be $10/hour but the fully burdened charge out rate may be $75/hr. This is calculated by the business owner to account for all the overhead costs including FICA, FUTA,SUTA,other taxes, workers comp insurance, business liability insurance, phone lines, internet connection, heat, A/C, light and whatever else is needed to keep the business running as well as some profit...
     
  26. MarkG

    MarkG Formula Junior

    Nov 3, 2003
    369
    Colorado Springs
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    Mark
    When I was in the foreign parts business, the general rule on normal price ranged parts: cost x 3 x .86 = list (cost 5.00; 5.00x3= 15.00 x .86= $12.90 list). This would allow a 40% discount to repair shops (12.90 list, $7.74 net to shop). Shop would then charge customer 12.90 or what ever their markup was.

    We never charged full list on parts to walk in customers; and customers with high end cars needing massive amounts of parts (say engine rebuild, etc.) were almost always given 25-30% discount off list.

    My local F-car shop charges Ferrari's list price on parts, no matter who thay get them from (such as $995 for clutch assembly).
     

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