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Customer Supplied Parts


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Will you install parts for a customer that supplies the parts? If you do, do you mark up your labor to compensate for the lost revenue from parts? If you do mark up your labor, how much do you mark it up? We currently just charge the labor and do not mark it up at all but I would like to eventually get rid of these types of customers by marking up labor but I don't know exactly how much to mark it up.

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xrac, do you just flat out deny customers that ask to have their parts installed? Do you feel like you are losing out on revenue from these customers or do you feel as though this is the type of customer you don't want anyways? Its tough because you don't want to lose out on any business but at the same time you want to have a complete sale for each customer.

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What we see happening here at our facility is vehicle is diagnosed by our tech either through an oil change or the customer coming in for a diagnostic. The customer does not have the vehicle repaired that day of the oil change or diagnostic and leaves with an estimate. Then on a later date, the customer tries to bring the part that we have recommended by purchasing it at a local parts store or online. We do try and push the warranty aspect of it but for some people, they can only think of right now and not in the future. As I said earlier, we currently charge the same labor as if we were purchasing the parts but I'm seriously thinking about changing that and increasing the labor rate. Is 25% the amount of labor increase you guys typically increase?

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I like many of the other posters with rare exception just do not allow this, I have tried in the past and it rarely went smooth, customers would complain about increased labor, wrong parts would come in, and with the vehicle apart a bay now is tied up. Even when explained and written on the invoice if there is a failure you will likely have an argument on your hands as this type of customer does not want to spend to begin with. At least for me this is not my target customer, they are usually looking for the lowest price. If is a specialty type part that I don't want to sell and it looks like I can make money, then I will, other then that thanks, but no thanks!

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With rare exception, we do not install customer supplied parts. During the recession we saw an increase in people coming to us with their own parts and we tried to accommodate them, charged more labor, but in the end it turned ugly, for the most part.

 

I can remember one guy insisted that we do not diagnose the car and install his mass air sensor, which he read on the internet and was confirmed by the parts store that pulled a mass air code. After the part did not solve his problem it tuned into an argument that WE should have known better.

 

We do make exceptions. The other day a customer came to us with a front differential that he thought he could do himself. He was real nice and did not give us a hard time. In fact, he was embarrassed that he brought us the part. We did the job and it turned out nice.

 

The bottom line, we make money on labor and parts. Take away the part profit, take away too much of what we need to survive.

Hey Joe, in reference to the gentleman that needed the MAF. We have a saying here at our shop "Of course it didn't work. We fixed what you told us to fix."

 

We too make some rare exceptions. For the most part the answer on the phone is "I'm sorry but, we don't install customers own parts." When we do, the labor up charge is 1.5 times the labor rate and we do state on the invoice that we used the customer supplied parts. We also say NO WARRANTY. However, we also know that the law is on the customers side with the warranty issue. But, the customer doesn't have to know that.

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I do not install customer parts except for the VERY rare occurrence. I have only had a handful of people really inquire as to why we will not do this. Pretty simple to me, you don't take your own food to a restaurant. Everyone has pretty much hit the nail on the head as to why we shouldn't do it. We are the professionals, we know what brands work and what one's don't. Keep in mind, we are liable even if they sign a piece of paper stating NO WARRANTY. Law is on their side.

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Just had a terrible experience. Installed a downpipe for a 335i a few weeks ago for a guy. He initially called in and told us he had an downpipe to install. No problem seemed pretty straight forward. Customer comes in, turns out to be a used downpipe and no exhaust gaskets. Explained to customer that he might have issues since he needed new gaskets said ok no problem.

 

Fast forward to today, guy comes in complaining of an exhaust noise. Explained to him that we are more than happy to drop his exhaust and examine the entirety of the exhaust however if there is nothing apparently wrong with our work then we would have to charge him again. Customer agree, we drop everything, nothing wrong. All of a sudden customer has a problem paying trying to cite all kinds of crap out of the wood work. He even said we never had to drop the exhaust to install his downpipes as per a video he saw. Don't know where these people come up with this stuff. Do they genuinely believe their BS or are they trying to get over? Either way is scary. Guy is a bottom feeder customer, I was contemplating on letting him off the leash without paying but then I'd feel like a real idiot for doing free work. On the other hand, this customer could turn around and give a negative review out of fabricated stories. These type of people I really wish the worst for, we would all be better off with them gone off the earth.

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  • Have you checked out Joe's Latest Blog?

         0 comments
      Auto shop owners are always looking for ways to improve production levels. They focus their attention on their technicians and require certain expectations of performance in billable labor hours. While technicians must know what is expected of them, they have a limited amount of control over production levels. When all factors are considered, the only thing a well-trained technician has control over is his or her actual efficiency.
      As a review, technician efficiency is the amount of labor time it takes a technician to complete a job compared to the labor time being billed to the customer. Productivity is the time the technician is billing labor hours compared to the time the technician is physically at the shop. The reality is that a technician can be very efficient, but not productive if the technician has a lot of downtime waiting for parts, waiting too long between jobs, or poor workflow systems.
      But let’s go deeper into what affects production in the typical auto repair shop. As a business coach, one of the biggest reasons for low shop production is not charging the correct labor time. Labor for extensive jobs is often not being billed accurately. Rust, seized bolts, and wrong published labor times are just a few reasons for lost labor dollars.
      Another common problem is not understanding how to bill for jobs that require extensive diagnostic testing, and complicated procedures to arrive at the root cause for an onboard computer problem, electrical issue, or drivability issue. These jobs usually take time to analyze, using sophisticated tools, and by the shop’s top technician. Typically, these jobs are billed at a standard menu labor charge, instead of at a higher labor rate. This results in less billed labor hours than the actual labor time spent. The amount of lost labor hours here can cripple a shop’s overall profit.
      Many shop owners do a great job at calculating their labor rate but may not understand what their true effective labor is, which is their labor sales divided by the total labor hours sold. In many cases, I have seen a shop that has a shop labor rate of over $150.00 per hour, but the actual effective labor rate is around $100. Not good.
      Lastly, technician production can suffer when the service advisors are too busy or not motivated to build relationships with customers, which results in a low sales closing ratio. And let’s not forget that to be productive, a shop needs to have the right systems, the right tools and equipment, an extensive information system, and of course, great leadership.
      The bottom line is this; many factors need to be considered when looking to increase production levels. While it does start with the technician, it doesn’t end there. Consider all the factors above when looking for ways to improve your shop’s labor production.
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