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Do You Charge A Shop Fee?


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How do other shop owners charge for shop supplies, hazardous or other waste removal fees? (The cost of rags, cleaners, clips, fasteners, degreasers, silicone, etc.) Do you have a flat rate or is it a percentage of the overall job, parts, or labor?

 

I find that a lot of customers are outraged when they see on their receipt "Shop Fee / Miscellaneous." Is it best to avoid this and just markup the price of labor or parts to make up for it? Or to keep itemizing it out?

 

 

We try our best to satisfy every customer, but these shop supplies were stocked in the shop for free.

 

Thanks for your input.

 

 

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I work it into the parts. If I do a window regulator and I need 2 clips for the door panel I just mark the regulator up a few bucks... keeps people from getting mad over something they don't understand or didn't authorize...

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I charge 8.01% on every ticket up to $39.97 total. I have been doing this for almost 4 yrs and haven't had anyone question this charge at all. I have plainly posted on the wall what this charge is for and it is included in the cost of the estimate so it doesn't show as an extra charge when they check out. Its worth a lot of money a year to cover all the "stuff" we can't charge out on every ticket.

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  • 3 months later...

In the state of California we are not allowed to charge a "shop fee". Everything is billed out as a part. Rags are part of my overhead expense. Everything else is billed out on the invoice as a part even if I bill .1 for the thread lock I used. So if a bottle of thread lock cost me $10 and I would charge lets say $18 for a whole bottle I just divide the $18 dollars by how many times I would think the bottle would last me say 25 times. So .1 billed out would be .72 cents on the invoice. This system seems to work out for me and I have never had a complaint from a customer over 72 cents.

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Ours is 6% up to $40.00 on shop supplies line. As long as we include shop supplies and any taxes in the estimates there does not seem to be any questioning of the charge. For so many years we didn't even charge shop supplies and didn't realize the affect it had our ability to make a more "reasonable" profit. While there have been little or no complaints, we can't be sure it doesn't cause the customers some distress and they just aren't saying so. I really like method Joe uses above, of adding it in behind the scenes, it just sounds to me as a fairer way. I always felt a line for a shop supply charge was kind of petty.

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I charge a "Shop supplies" charge. I did, then I didn't and now I do again. I used to avoid the topic but now I just tell the customer, here is what is needed on the job, parts, labor, shop supplies and sales tax for a total of...

I never have had a complaint regarding shop supplies. And one thing I found out, shop supplies are parts. So if your state is like Michigan and only parts are taxed, not labor, you better be charging tax on the shop supply total. i can see both sides of the coin, if someone is pricing it doesn't matter if you charge $XX for the parts, $YY for the labor and $xy for shop supplies, or if you are charging $XX.y for parts and $YY.x for labor, the total is still $XXYY.xy. Likewise it won't matter if the guy down the street doesn't charge shop supplies and his total quote is $XXYY.y he'll be cheaper than you. I think it is a matter of it makes up feel better to see that charge to pay for half a can of brake cleaner, a couple shots of penetrating oil, some chassis grease and maybe a nut botl and washer. When all the customer sees is my canuter valve replacement cost me 456 scheckles and 75 foibles. If they are scrutinizing the bill, nothing you can do is likely to make them happy, even discounting it, you are always going to be ripping them off.

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Now on the topic of the hazardous waste disposal, in Michigan, last I knew, a shop could not charge more than their actual costs for hazardous waste disposal, within reason of course. If a reasonable estimation had you charging $$ on every job that had haz waste and you collected $$$$$$$ but only spent $$$$$$0 you were close enough but had to reevaluate for next year. But if you collected $$$$$ but only spent $$$$ then you should have reevaluated mid-way through the year and you would be in violation. Good luck with that one.

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We charge both shop supplies and enviro fees. We have always charged shop supplies, and never had anyone question it. We started charging enviro fees this year, and no one has complained about those either. The key is to just make sure the price you quote the customer includes all of these fees, so that they are not viewed as an add on. We also use a shop management software that only adds them in at the bottom of the invoice, and not as a line item, where it is more likely to draw attention.

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When we first started to charge "Shop Supply Fees" years ago, we had some customer's question it. Now, customer's seem to understand it better. Our POS system just adds the percentage into the job. We DON'T charge that fee on tires that we sell. We kind of have a " Don't like it? oh well" kind of attitude because on many jobs we actually use more than the fee covers but not enough that we have to actually put it on the invoice.

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  • 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!”
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