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With Mother Google literally tied to our hands, through our cell phones; are part margins becoming more difficult to achieve?  Traditionally, shops use a 50% part margin, which they deserve.  But, we live in a world today where part prices are so transparent that maybe we need to rethink this.

Consider this: What  if we concede on prices?  Hold to a suggested list…BUT…raise our labor rate to offset the loss in overall profit. In other words, keep your parts prices at a margin the consumer will not question,  but raise your labor to make up the part profit? 

This is being discussed around the country and there are shops that have implemented this strategy.  We can’t give up our overall gross profit, so is this a viable option?

Your thoughts?

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