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First, I feel like i am hogging the board...

 

I know parts store discount are based off of volume but when we set up with Autozone they gave us a flat %20 off non showroom parts then we signed up for the "Casper" program to lock that rate in. Advance Auto gave us the variable discount and again signed us up for the "top" tier till we got established. When ordering on their online sites it seems we are getting a deal. When we compare our discounted price to their website and store price the discounts are only a few bucks an no where near %20.

 

My questions would be; How normal is this? Are we getting played? or is the normal life goes on?

 

The dealer parts we get seem to have a legitimate discount over what they sell them for, not much but it doesn't appear there are games being played.

 

As always, thanks in advance for the insights.

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Build a relationship with store staff. Be there to help them when they need it and they'll be there when you need help. It's not all about price either, remember your selling a service, not cheap parts!

 

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Maybe once established and doing a large volume but starting out many of them look at you as a PITA customer that doesn't help their numbers. I receive more discounts and referrals from our local part stores than you can count.

 

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97 Ford Ranger 3.0L ac compressor

part number: 618132

autozonepro $179 retail $358

autzone $185

 

part number: T58132

advance auto commercial $156 retail $250

advance auto $185

 

in this instant advance obviously has a decent discount but they never said it was going to be a consistant %20 off.

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I've noticed the same thing here. Some items there is a considerable discount and many other items the prices are relatively the same as someone that comes off the street to purchase parts at the store. I would be very interested to see what types of discounts are considered the "norm" based on purchase totals.

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Getting to know the staff, that is key. I get at least 5-10 new customers a week from our local parts store. Also with the relationship, I just disregard my pricing that comes up in the computer. I call and they give me at about 20% off my top tier price. My advise is be upfront and honest with them. Understand that we are all just trying to make a buck. Let them know that you understand that they need to make profit on these parts but you also need help making money.

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Joe, this has bothered me tremendously since we opened the doors. My service writers boyfriend works at atz and he gets a flat 20% off all parts which is way more than I get...

 

For these reasons we have been systematically switching over to dealer parts and so far it's working out. Not to mention a lot of dealer parts are cheaper.

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Most parts stores sell to repair shops around 10% off walk in. More on some lines less on others. List is for marketing a feel good discount. Some dealers boost list price then discount from there. A lot of shops never purchase enough to get any real price break.

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I want to make the point that not matter what we pay, we need to understand that what we charge will determine if we are profitable or not. 

 

Paying $20.00 for a rotor or $30.00 for that same rotor from another suppier is one issue, but the price to customer is what we need to consider. 

 

I have said this in the past, we need to find a balance between being competitive and being profitable.

Exactly! In most cases list is no where near high enough!

 

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Being competitive and being profitable isn't what is used to be. One can only structure creative pricing so far. Small shops provide good service, good value and a caring relationship to our customers. At the end of the day dealerships and chain stores continue to chip away at us by crossing into the advantages we have and owning purchasing power we don't have.

Edited by slowtech
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I have little experience purchasing from big parts stores as my suppliers namely worldpac and northside are a wholesale only or wholesale first business. That being said, do your customers know that the parts they are getting installed in their car are atz or big parts store parts? Does that cause a problem for you all?

 

The atz, pep boys, advanced parts stores all seem like low quality bottom of the barrel operations and I wouldn't be caught dead using them as a supplier. NAPA on the other hand treats us very well. No complaints about them.

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As far as where parts are sourced from all the big parts chains sell a lot of the same major brands. Worldpac & CARQUEST are now owned by Advance Auto Parts. Borg Warner is owned by Standard Motor Products ( Standard ignition/Bluestreak/Four Seasons etc.) Standard Motor Products is the supplier to NAPA Echlin. The list goes on.

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As far as where parts are sourced from all the big parts chains sell a lot of the same major brands. Worldpac & CARQUEST are now owned by Advance Auto Parts. Borg Warner is owned by Standard Motor Products ( Standard ignition/Bluestreak/Four Seasons etc.) Standard Motor Products is the supplier to NAPA Echlin. The list goes on.

I like the higher quality and oem brands that worldpac offers and the speed of service and professionalism offered by advance. My issue with advance isn't part quality, it's the manner in which they operate. That may be the private store factor.

 

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I like the higher quality and oem brands that worldpac offers and the speed of service and professionalism offered by advance. My issue with advance isn't part quality, it's the manner in which they operate. That may be the private store factor.

 

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Our Advance goes above and beyond and they have the best people of any store in town. Napa does well for us too but they have some grumpy people there and I hate dealing with grumpy people especially when I'm paying. Rarely have to deal with them though since all orders are done online, but thinking about it now the grumpy seems to slide down to the delivery people, and one girl in particular leaves my lobby door wide open the whole time she's in my shop dropping off parts. Ticks me off when it's -10f!

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I've learned the parts store managers are good liars. They tell everyone that they achieved diamond or top tier level or whatever and it makes you feel good . Normally we get 10% off walk in price as the norm on our our computer's catalog. We base our markup matrix off of this number. Once the job is sold we call our contacts at the parts store and ask for a deeper discount, this extra 5-70% is real money in our pockets. We aren't PITA customers and most of the time we don't haggle on a couple dollars, but our main parts supplier will sell us parts at a much better price than initially offered to keep us as the first call. Some parts stores won't budge at all, we don't give them as much business. Think about it from the part stores eyes - $20000 a month in commercial parts sales @ 40% profit is way better than $2000 in sales @ 80%. The truck uses the same amount of gas and the part driver gets paid the same in both scenarios. On some big jobs we pass the savings on to the customers to stay competitive. A lost sale = 0 profit for everyone. Some stores have a "creep" where we get 50% off walk in the first month, then 40%, and so on until there's little discount. They know that most shops get too busy to shop around. It keeps us on our toes, that's for sure.

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Not to over post but a comment on parts quality. Compare an economy Autozone bearing to one from Advance, Napa, Carquest, or any other store and tell me the difference. They are exactly the same part with a different sticker on the box. Same goes for anything rebuilt - it's almost all restickered A1 Cardone. We buy from the store that offers us the best price, service, and warranty. Right now AZ has the best parts and labor warranty we have ever seen. FYI rock auto shares the same warehouse as some major parts chains, the only difference is the price. The parts are the same at the bargain quality level. That said we try to put premium brand name parts on everything, it's way better for everyone.

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  • 4 weeks later...

Not to over post but a comment on parts quality. Compare an economy Autozone bearing to one from Advance, Napa, Carquest, or any other store and tell me the difference. They are exactly the same part with a different sticker on the box. Same goes for anything rebuilt - it's almost all restickered A1 Cardone. We buy from the store that offers us the best price, service, and warranty. Right now AZ has the best parts and labor warranty we have ever seen. FYI rock auto shares the same warehouse as some major parts chains, the only difference is the price. The parts are the same at the bargain quality level. That said we try to put premium brand name parts on everything, it's way better for everyone.

 

 

I have noticed this tool. A canister purge valve that we ordered from oreillys in a pinch was a dealer bosch part in a standard/bwd box.

We buy from napa because they offer a 2 year parts and labor warranty that we can pass on to our customers when we install their premium parts. 1 year parts/labor on their "Value" brands.

Plus napa actually wants to help us. Sales rep comes by almost once a week, delivery times are good. Parts they stock is outstanding. And the prices are suprisingly close to advance's prices.

 

We only buy hard parts(for warranty to our customers) and diesel engine oi from napa(valvoline premium blue is an amazing deal). Most of our filters and fluids come from advance. Oriellys is really quick for delivery so we get things we need quick from them.

 

Bottom line is, you can hardly ever use one place for everything. Just see who is best at what, and what is hype.

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There are extremes in our pricing from parts stores. Sometimes, we get a huge discount off retail $, others it's literally a couple of dollars. I know this is sacrilege to some of you guys, but a some of our customers come from referrals from auto parts stores so we feel we have to match their retail on parts. I have price checked the retail sometimes and found that my customers could get the part cheaper than I can because of on line discounts and gift card offers (Advance). That's when I call my parts guys and give them some crap. They will lower my price at this point, but MY point is that I shouldn't have to call at all. I should be confident that I am getting the best price possible and not have to spend my time price researching. We do a lot of business with our local parts stores and we have a great rapport with all of them. I have to keep in mind that they (my commerical reps) are not responsible for the retail discount program, but somebody should be ensuring that their commercial accounts are in a position to make some money on parts.

If it's not a referral from one of the stores, I mark my parts up accordingly so I am ensured to make money on the parts, but we don't go crazy, we try to stay fair. I also think the list $ on some of my purchases is ridiculously high and there is no way in good conscience I could charge that to a customer.

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Getting to know the staff, that is key. I get at least 5-10 new customers a week from our local parts store. Also with the relationship, I just disregard my pricing that comes up in the computer. I call and they give me at about 20% off my top tier price. My advise is be upfront and honest with them. Understand that we are all just trying to make a buck. Let them know that you understand that they need to make profit on these parts but you also need help making money.

What are some good ways for a new startup auto shop to form these relationships, because it seems that until you are actually buying parts it is hard to do?

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What are some good ways for a new startup auto shop to form these relationships, because it seems that until you are actually buying parts it is hard to do?

Sometimes it is not about buying the parts but the relationship. Go in and talk to the staff, talk to the managers and get to know them. I started out very small but staff would remember me because I was the one that would send them pizza once a week or so. Also they spend most of their day dealing with headache customers. Make sure you are not one of them. Be understanding, nice and outgoing and they will repay the favor when they are able.

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I shop for the best price on parts that I can, but I can't help myself but sit back and chuckle a little. We want our customers to pay top dollar for quality service and professionalism, yet on our side of the counter we whine and complain over finding the cheapest or near cheapest priced parts we can get ahold of.

 

I feel like the price shopping customer we all get annoyed by.

 

I generally buy from a local wholesaler called car parts warehouse. I do shop with az and advance due to proximity and wide selection of in stock odd ball parts. Tires come from American tire distributor

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  • Have you checked out Joe's Latest Blog?

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      It always amazes me when I hear about a technician who quits one repair shop to go work at another shop for less money. I know you have heard of this too, and you’ve probably asked yourself, “Can this be true? And Why?” The answer rests within the culture of the company. More specifically, the boss, manager, or a toxic work environment literally pushed the technician out the door.
      While money and benefits tend to attract people to a company, it won’t keep them there. When a technician begins to look over the fence for greener grass, that is usually a sign that something is wrong within the workplace. It also means that his or her heart is probably already gone. If the issue is not resolved, no amount of money will keep that technician for the long term. The heart is always the first to leave. The last thing that leaves is the technician’s toolbox.
      Shop owners: Focus more on employee retention than acquisition. This is not to say that you should not be constantly recruiting. You should. What it does means is that once you hire someone, your job isn’t over, that’s when it begins. Get to know your technicians. Build strong relationships. Have frequent one-on-ones. Engage in meaningful conversation. Find what truly motivates your technicians. You may be surprised that while money is a motivator, it’s usually not the prime motivator.
      One last thing; the cost of technician turnover can be financially devastating. It also affects shop morale. Do all you can to create a workplace where technicians feel they are respected, recognized, and know that their work contributes to the overall success of the company. This will lead to improved morale and team spirit. Remember, when you see a technician’s toolbox rolling out of the bay on its way to another shop, the heart was most likely gone long before that.
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