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Air filter pricing debate


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We had an issue with one of our important accounts about the price of an air filter of all things. 2014 Dodge Charger. Air filter price installed was $51.00. Our price was $25.48. This is for a premium filter as the economy grade was not in stock anywhere and this client demands a quick turn around. Our pricing on filters is based off a pretty standard matrix and we do not charge labor. One of my techs inadvertently got into the debate and tells me how "down south" (he worked in North Carolina for a stint) they only mark filters up $10 and don't charge labor on filters either. Seems unrealistic to me but nonetheless I still would appreciate actual shop owners input on this subject. Am I too high, too low, or in the ballpark? How do you guys price smalls such as filter, blades, etc.?

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Did the customer have a problem with the price? I am unsure of where the problem arose. Is it just the tech thinking hes doing something wrong?

 

We personally mark all parts up via our matrix. Since air filters are in the lower price range we generally leave the matrix as is with the higher %. We also charge for labor, usually .2 - .3. 99% of the time I do not allow my techs to do anything unless they are getting paid for it. If its by chance we decide to perform a air filter swap courtesy for a good client (no charge) we will always at least make sure we are making some money on the part. We are for profit businesses and businesses exist to make money. Doesn't mean we can't help people, we most certainly should however we have to make a profit to continue to provide exceptional service and be in existence for our clients. Profit is not a dirty word.

 

You may or may not want to treat your fleet accounts a bit differently. I don't do fleet work so my experience is limited however from all the questions I've ever asked, you should set terms in the beginning (payment terms, labor rate, parts pricing etc). Make sure everything is agreed upon before hand and that you are still profitable. If you are working with a stand up commercial account that appreciates your relationship and work I don't see it being an issue.

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Sorry, but the first thing that jumped out at me is you're installing filters for free. Why?!?! I mean, 75% of my customers couldn't install their filters on their own if their life depended on it, so why would we do it for free? That is exactly why people come to shops, because they can't or wont do the work themselves and are willing to pay for it.

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It was an issue with the client. He was wondering why it was so high. We worked things out with him and he's cool with it now. They are on pace to do $200,000 with us this year so we bend over backwards to make them happy. I was worried I may have been overpricing them.

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I don't know about you, but that filter right now is not a common stock item, my cost on the Hastings is $17.25 and the OEM Mopar is $33.23. List price is $53.28.

 

Not knowing the context I wouldn't be able to tell you anything other than selling it at $51 on a corporate account that you have to wait 30 to 60 days to get paid is kinda cheap.

 

And don't get me started on techs trying to tell me how others do it and how to run my business. I listen to what they have to say, but never get them involved discussing pricing in front of my customers. It's me who has to worry about making their payroll even when sales for the week haven't broken even. Suffice to say they haven't a clue as to the plain overhead expenses that take to keep the doors open and the lights on, their benefits, taxes, etc.

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  • 2 weeks later...

We mark up premium filters to our fleets at 1.7 . The issue about free install Most shop's do not show labor charge for a filter , not worth the battle we add it into are retail price , tech gets compensated. It is not labor and parts to fight about--- what do you want to make and what the costumer percieves - Most client's it would be a debate for labor on an air filter.

 

My Belief Dan Reichow

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I'm amazed out how many people on here really think that most of their customers could change their own filters and wiper blades. Maybe our shops have very different clientele, but I'd say about 25% of my customers don't even know how to open the hood on their car. Of the remaining 75%, maybe half would even get close to where the air filter is located, but they still wouldn't know how to access it without breaking a couple of engine cover clips and unknowingly disconnecting vacuum lines, etc.

 

The way I look at it, folks come to us and pay us to do work they either don't know how to do or have no interest in doing it themselves. IE, you know how to grill a steak, but Outback doesn't cook it for free just because it's not that difficult or because it's a routine thing. You pay them for the convenience and they might even use some better spices or cooking techniques that you don't know about. I view it the same way.

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This issue depends on your customer base. I deal with low income customers and I could not get away with that. The same thing would go with a battery. They know they could go to AutoZone and buy it with free install so all I can do is sell it at AutoZone walk in price and pocket the difference of my discount. For the air filter, at my shop I wouldn't go much more than $10.00 mark up with no labor. I have some friends with nice big shops on the high income side of town and it is a different story for them.

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  • Have you checked out Joe's Latest Blog?

         0 comments
      It always amazes me when I hear about a technician who quits one repair shop to go work at another shop for less money. I know you have heard of this too, and you’ve probably asked yourself, “Can this be true? And Why?” The answer rests within the culture of the company. More specifically, the boss, manager, or a toxic work environment literally pushed the technician out the door.
      While money and benefits tend to attract people to a company, it won’t keep them there. When a technician begins to look over the fence for greener grass, that is usually a sign that something is wrong within the workplace. It also means that his or her heart is probably already gone. If the issue is not resolved, no amount of money will keep that technician for the long term. The heart is always the first to leave. The last thing that leaves is the technician’s toolbox.
      Shop owners: Focus more on employee retention than acquisition. This is not to say that you should not be constantly recruiting. You should. What it does means is that once you hire someone, your job isn’t over, that’s when it begins. Get to know your technicians. Build strong relationships. Have frequent one-on-ones. Engage in meaningful conversation. Find what truly motivates your technicians. You may be surprised that while money is a motivator, it’s usually not the prime motivator.
      One last thing; the cost of technician turnover can be financially devastating. It also affects shop morale. Do all you can to create a workplace where technicians feel they are respected, recognized, and know that their work contributes to the overall success of the company. This will lead to improved morale and team spirit. Remember, when you see a technician’s toolbox rolling out of the bay on its way to another shop, the heart was most likely gone long before that.
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