Quantcast
Jump to content









Parts Markup?!?


Recommended Posts

Hi guys I am new to the forum. I thought this would be a great place to talk to other shop owners about questions we have. Sometimes Alldata doesnt have everything you need and Google and Youtube actually come in handy lol... but hopefully in the future can have some other great minds help us.

My boyfriend & I started our shop in January. I asked a good friend of mine (she does bookkeeping & accounting) how people markup on parts. She said 47%.

 

When I call Napa, O'Reillys etc I ask for list price, but then list isn't what the "average Joe" can walk in and get it for. I cant go off of average joe price because we wouldn't still be in business. I cant sell it at manufacturer list either because that would mean taking an arm and a leg...

 

I meet in the middle, on small stuff markup more cause not a lot of room to move, and big stuff markup less. And dealer I just sell it at what dealer would sell it at, because I don't want someone going into our place or the dealership stating I sold it at less or more than dealer or vice versa. And then aftermarket parts I sell lower than MSRP. So if we do 20% markup we lose money, 45% on small stuff, 30% on bigger items? What does everyone mark their parts up? And just an FYI our labor rate is competitive from the rates other shops charge we are much lower at $80.00/hr whereas others charge $100.

 

Can someone please explain to me auto parts markup or how they markup or how I am doing it is okay for an auto shop?

 

Amanda S

Edited by PARKSINDUST
Link to comment
Share on other sites

I want to say first that i dont think there is one right answer to this question, every business and situation requires different standards. You need to find out what works best for you and how to remain profitable without taking advantage of anyone.

 

In the case of my business every job and situation is different, we mark up dealer parts from 15 to 50% and aftermarket parts from 50% to 150%. Lesser expensive parts are marked up higher than more expensive items, but once again every job is different.

 

Good luck

 

 

Hi guys I am new to the forum. I thought this would be a great place to talk to other shop owners about questions we have. Sometimes Alldata doesnt have everything you need and Google and Youtube actually come in handy lol... but hopefully in the future can have some other great minds help us.

My boyfriend & I started our shop in January. I asked a good friend of mine (she does bookkeeping & accounting) how people markup on parts. She said 47%.

 

When I call Napa, O'Reillys etc I ask for list price, but then list isn't what the "average Joe" can walk in and get it for. I cant go off of average joe price because we wouldn't still be in business. I cant sell it at manufacturer list either because that would mean taking an arm and a leg...

 

I meet in the middle, on small stuff markup more cause not a lot of room to move, and big stuff markup less. And dealer I just sell it at what dealer would sell it at, because I don't want someone going into our place or the dealership stating I sold it at less or more than dealer or vice versa. And then aftermarket parts I sell lower than MSRP. So if we do 20% markup we lose money, 45% on small stuff, 30% on bigger items? What does everyone mark their parts up? And just an FYI our labor rate is competitive from the rates other shops charge we are much lower at $80.00/hr whereas others charge $100.

 

Can someone please explain to me auto parts markup or how they markup or how I am doing it is okay for an auto shop?

 

Amanda S

Link to comment
Share on other sites

Low working wages in the area, still crawling out of an economic recession, and a competitive auto repair market here. We charge 30% mark up on MOST parts. You mark up large parts here ($200+) it will throw your estimate to high and say bye bye to the repair job. Every customer seems to be a price shopper and they know the fair market price before they call or enter the door. I don't lose out on too many jobs with this method ($60/hr labor + reasonable 30% mark up). It would help to charge more, but it is either win the bid, or sit on the computer all day.

Link to comment
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
  • Have you checked out Joe's Latest Blog?

         5 comments
      I recently spoke with a friend of mine who owns a large general repair shop in the Midwest. His father founded the business in 1975. He was telling me that although he’s busy, he’s also very frustrated. When I probed him more about his frustrations, he said that it’s hard to find qualified technicians. My friend employs four technicians and is looking to hire two more. I then asked him, “How long does a technician last working for you.” He looked puzzled and replied, “I never really thought about that, but I can tell that except for one tech, most technicians don’t last working for me longer than a few years.”
      Judging from personal experience as a shop owner and from what I know about the auto repair industry, I can tell you that other than a few exceptions, the turnover rate for technicians in our industry is too high. This makes me think, do we have a technician shortage or a retention problem? Have we done the best we can over the decades to provide great pay plans, benefits packages, great work environments, and the right culture to ensure that the techs we have stay with us?
      Finding and hiring qualified automotive technicians is not a new phenomenon. This problem has been around for as long as I can remember. While we do need to attract people to our industry and provide the necessary training and mentorship, we also need to focus on retention. Having a revolving door and needing to hire techs every few years or so costs your company money. Big money! And that revolving door may be a sign of an even bigger issue: poor leadership, and poor employee management skills.
      Here’s one more thing to consider, for the most part, technicians don’t leave one job to start a new career, they leave one shop as a technician to become a technician at another shop. The reasons why they leave can be debated, but there is one fact that we cannot deny, people don’t quit the company they work for, they usually leave because of the boss or manager they work for.
      Put yourselves in the shoes of your employees. Do you have a workplace that communicates, “We appreciate you and want you to stay!”
  • Similar Topics



  • Our Sponsors

×
×
  • Create New...