Dealer sourced parts

[GENUINE]

It seems I'm finding myself sourcing parts more and more from the dealer for a variety of reasons. I always find it difficult to work these into my standard automated price matrix markup. Margins are typically list less 20% for us for from most dealers - some 25%, but when I plug that into my matrix it usually bumps the sell price well above the dealers "list" price.  How do you guys calculate parts from the dealer? Can you comfortable charge above dealer list or how do you make dealer sourced parts as profitable as a normally sourced parts repair? I don't want to hear "you're charging more than the dealer" for that part.

Thanks

 

[Shoichi Kinouchi]

I have found that a lot of dealers charge more than the suggested retail price to their service customers.  Not by a enormous amount like 40% but more like 10-20% I'm guessing.  I do the same and my customers don't complain about it.  

[Dnzauto]

1- correct, lots of franchise dealers bump up the msrp.....especially ones with urban location!!  also, they print different MSRP numbers to customers as they wish ....!!!! I get 15-25% off of dealers msrp most of the time... they make huge $$$, and they really hate us because they think we steal jobs from them....

2- we NEVER charged a cent over msrp from number from mithell or worldpac! I am super careful on that, as customer can easily go online and see if we overcharge and would get the wrong idea. we have a high labor rate and stick to little margins on the parts, and when it comes to that, I explain how our total price is the same as others....

[sheltrens]

I charge more than dealer list on most parts. If the parts is outrages from the dealer I may not go as high. On the under $50 parts I throw in my matrix like everything else. I am in a rural area and have a big dealer network 2 hours away. They deliver 5 days a week. I try to buy online at repairlinkshop.com. I usually have 30%margin to work with and more on other things. I can see there inventory also. I also warranty all of my jobs for 2year 24 months. The dealer doesn't. 

Scott

[AndersonAuto]

I run almost every part through my matrix. Doesn't matter where it comes from. The exceptions are engines, transmissions, and the like.

I haven't found any good reason to discount dealer parts. I rarely tell customers where a part comes from. Rarely meaning almost never. Like NEVER.  I get things from "my supplier".

I give twice the warranty the dealer gives me, and the dealer doesn't cover labor on any of it. Why on earth would I make less on their part?

[GENUINE]

Thanks for the input all.

[JohnC0721]

If I have the time or if the customer isn't scheduled for a few days I use rockauto or amazon prone to buy a lot of OEM parts.  Just last week I got a motorcraft transmission filter housing for a diesel for $229 from rockauto when the list at the dealer was almost $600.  Doesn't always work out time wise but Amazon also has those same parts often for a little more than rockauto but they can deliver next day.   Not exactly what your question was but good way to make more profit off quality parts

Edited May 6, 2017 by JohnC0721

[J.P. GLENN]

  On 5/6/2017 at 12:06 PM, JohnC0721 said:

If I have the time or if the customer isn't scheduled for a few days I use rockauto or amazon prone to buy a lot of OEM parts.  Just last week I got a motorcraft transmission filter housing for a diesel for $229 from rockauto when the list at the dealer was almost $600.  Doesn't always work out time wise but Amazon also has those same parts often for a little more than rockauto but they can deliver next day.   Not exactly what your question was but good way to make more profit off quality parts

Expand  

I would like to caution everyone about buying "cheap" brand name parts online. Specifically Amazon and Motorcraft.  I have not had any personal experience, but it is known that there are counterfeit car parts for sale online. Motorcraft and NTN bearings both have formal articles showing how good these counterfeits are at fooling even those of us "educated" consumers.  I overheard a conversation about Motorcraft doing some kind of audit on their parts on amazon and found a staggering number of "motorcraft" parts were fake.  I've also read a few Ford forums were consumers had proof that their "Motorcraft" coils were indeed counterfeit. I'm not saying all (or even most) of the great deals online are fake parts, but it is absolutely a "buyer beware" kind of situation. Just a heads up for anyone who wasn't already aware of how big this issue is. 

   

[mspecperformance]

It really depends on your business model. To hit industry target numbers you are looking at getting an average GP on parts of about 50%. If there are lot of dealer parts in your mix and you are not comfortable charging over "list" then you better make sure your labor GP will make up the difference. Essentially all you would be doing is hiding the profit in your labor so you can show your customers a lower parts price. I personally have not had an issue with any customers bringing up the price on our parts. We charge higher than list on dealer parts but we also provide a much longer warranty and an expert certified technician that is performing the service on their vehicle. They get our continued support as a client after the service. Our customers see it as a win and vote with their dollars. Also let us not forget that when you take your car to the dealer for service, you are paying over list for the parts portion of your ticket. If you aren't then that is a poorly ran dealer and you bet your ass their profit margins are in the toilet!

[mmotley]

Agreed with what everyone posted mostly. At the end of the day, you have to make your margins to stay open. That means you're not always gonna get the job. Focus on getting quality customers through the door and the rest should take care of itself

[3PuttFever]

We use our matrix but if dealer list is well below our markup I will on occasion move it down. I'm training my staff to use the 'my supplier' instead of dealer. I never say dealer and always use 'from the manufacturer' but only in the case of explaining of Repair Order turn around. My warranty is better than the dealer  and I can guarantee my customer service is superior as is our diagnosis. Remember to think in terms of mindset as in: The Dealer only pays $5 for the part they're charging you $40 for and lists as $52.50. I've found some manufacturer parts people are cooperative and want our business while others don't. Service departments only get what I can't do and that's reprogramming PCM's and the like.