What is a Fair Mark Up on Repair Parts?

[Travelover]

That is why one asks for an estimate of what the repair costs. If you sign the work order in most cases it states the repair will not exceed 10 percent of the total estimated. This is why I have a hoist and a tool box..... for myself and relatives that can't afford taking their vehicle to a professional shop. Buy quality replacement parts and do computer searches. Someone has completed the repair and may have tips on installation.

Thanks, it looks like I have my answer - a big markup is standard and if I don't like it, I should take my business elsewhere or do my own work.

As I posted earlier, I agree. I wasn't aware that it is standard practice to mark up parts this much. I thought the parts profit came from the difference between the repair shop's wholesale price and the retail price. I was wrong.

 

[rtimgray]

OP - I'm with you on this. I've had a thread or two before where I am more or lessing whining about the huge mark-up that service shops or dealerships charge. My main complaint is not that they mark the parts up (that's expected) but the amount of mark up. My last example was a couple of cabin air filters required for my Kia Sorento. From the dealer, they were almost $100. From O'Reilly auto parts, the Wix filter cost $10-$15. The thing was, I was already at the dealership. If the filters cost even $40 or $50, I probably would have bought them and had them installed there (installation was free) just for the convenience and because I was at the dealer anyway having warranty work done. However, the excessive mark up drove me away.

And I am with the guys on the board that choose to do as much work as possible themselves. The only mechanic work that I passover is stuff like transmission rebuilds - but I will remove and replace the tranny myself. I understand that businesses must mark up parts and charge high dollars for labor to cover their expenses, and I respect that. It does, however, prevent my patronage of said businesses.

Good luck and take care.

 

[BobRip]

I used to hang around a TV repair shop when I was a kid. If we replaced a resistor which cost us 10 cents, and charged the consumer 20 cents for the part, and then charged them $20 for labor we got complaints. We might spend 2 hours finding that bad resistor. We found that most people would rather pay more for parts and less for labor, even if the total bill was the same. Of course most people did not even know what a resistor was. You and many here know what the parts are and how much they wholesale for. This is not the norm. If the repair technician is driving a real nice car, has a real nice home and no debt then I guess he is paid too much. Of course you don't see that.

 

[Turbys_1700]

Fair mark up is what will allow the company to stay in business after all of their costs are calculated and also give the company/owner a reasonable return on their investment...
One reason Toyota, Honda, BMW, ect... have higher profit margins than their American counter parts is that more of their parts are controlled by their company...
I currently drive a Buick Lesabre...
Parts for that darn thing are everywhere and most all parts suppliers...
Not so for many other foreign makes...

 

[RickB]

Any serious conversation about retail markup or margin percentage has to start with the retailer's actual cost for that particular part.
All comments here are based on speculation, not fact, concerning what the retailer's cost actually is.
Anyone thinking that tractor parts retailers work on 100% markup (or margin, for that matter) needs to jump right in the business and get educated.

 

[newbury]

<snip>
But I wonder....I went to a Ford dealer auction last year and included were a number of special tools for mechanics to do repairs on Ford proprietary parts. In other words, if your widget breaks, you need the $500 Ford tool to do it and since you don't have it, you pony over to the dealer for the work. But most of these 1970's tools were nearly new in the box which tells me the customer found a way around Ford and it's proprietary gimmics by shopping elsewhere. Rest assured, some other car maker--likely foreign--will find a way to capitalize on your unhappiness. I would say it helped put that dealer out of biz...

My manual for my '59 FLH laid out a lot of special tools required for any repair. I relied on a Bronson Rock.

 

[banjodunn]

G'day I have been reading this with some interest and I note that some compare dealer prices with aftermarket. Over here it is a very similar thing I recently had to buy some lower linkage balls for a customer who did not have a sample of what would fit his tractor so I order genuine ones expecting to pay maybe $20 ea, not happy when they turn up and are over $200 for the 2:shocked:. When I measured them up I could get them from my a/market supplier and they would cost me $20 the pair..... Owner gets the bill and says " I don't want them at that price" and leaves me with them muttering something about not getting ripped off as he walked out the door. So now I have parts that are non returnable items and no one likely to pay that price for them. I know this happens ( thankfully not alot) so you got to wear it, but what I am trying to get at is that dealer prices are usually dearer because they get charged more from the manufacturer than what they would pay aftermarket, BUT due to being a dealer they are usually bound to supply genuine parts. If I was to walk into my local ford dealer and buy a part I will guarantee you that I can walk literally next door and if the same part is available at the auto parts store it will be 50+% cheaper. I will not go on about service tools and time spent at service schools and the like as this was well covered earlier. As a rule we add 30% to our parts unless you start talking multiple thousands of dollars then we usually only charge a little extra to cover the time spent looking up and ordering.


Jon