Margin/markup on parts

Ricta · 21-01-2021 4:28pm #1

I was shocked to discover an Independant garage in Co. Galway putting an 18.5% markup on the price of parts for a clutch repair. Plus €390 labour to replace Pressure Plate, Disc, Concentric Slave Cylinder and Dual Mass Flywheel.

I could understand a markup from the trade price to the retail price, but another 18.5% on top again?

Is this close to normal or just plain greedy?

shanec1928 · 21-01-2021 4:33pm

is rent, insurance tools etc free?

Toyotafanboi · 21-01-2021 4:36pm

How are you working that out?

20%- 30% ish would be about right for mark-up on spurious parts.

I ask because the retail price of the same component can change from supplier to supplier.

A particular clutch kit for your car from one supplier could be €100 and the mechanic is getting it -20%, you may have seen it advertised from another supplier for €95 retail. Pays to shop around, same as anything but most workshops only have one or two "go to" suppliers and the part manufacturers usually don't insist on a consistent RRP for their parts.

mickdw · 21-01-2021 8:15pm

Toyotafanboi wrote: »

How are you working that out?

20%- 30% ish would be about right for mark-up on spurious parts.

I ask because the retail price of the same component can change from supplier to supplier.

A particular clutch kit for your car from one supplier could be €100 and the mechanic is getting it -20%, you may have seen it advertised from another supplier for €95 retail. Pays to shop around, same as anything but most workshops only have one or two "go to" suppliers and the part manufacturers usually don't insist on a consistent RRP for their parts.

Assuming the op is comparing like for like, nobody should be paying 20 percent above retail for their parts.

Del2005 · 21-01-2021 9:01pm

mickdw wrote: »

Assuming the op is comparing like for like, nobody should be paying 20 percent above retail for their parts.

Most retailers have a bigger mark up. They are businesses not charities, if they don't mark up on parts they will have to charge more for labour.

User1998 · 21-01-2021 9:11pm

God forbid a business makes money. Theres a mark up on parts in every trade. Electricians, plumbers, mechanics, etc etc

colm_mcm · 21-01-2021 9:12pm

User1998 wrote: »

God forbid a business makes money. Theres a mark up on parts in every trade. Electricians, plumbers, mechanics, etc etc

There’s also trade prices which they buy at.
That said a business can charge what they want. If the customer agreed a price for the job and parts then it’s irrelevant what the garage bought them for.

Toyotafanboi · 21-01-2021 9:22pm

mickdw wrote: »

Assuming the op is comparing like for like, nobody should be paying 20 percent above retail for their parts.

There is no set RRP from most component manufacturers it is set by the suppling retailer through their supplier who generally isn't the manufacturer either, so they aren't paying 20% over retail they just paid 20% more than the same product in a different supplier.

Maybe the place OP found was doing some kind of deal or sale and the mechanic's price was the going rate?

Same applys to a pair of runners or a bottle of coke though to be fair.

Brembo front brake pads for 2012 1.6TDCi Mondeo, for example;

Euro Car Parts €79.46
https://www.eurocarparts.com/en_ie/p/brembo-brake-pad-10159125A

Micks Garage €41.99
https://www.micksgarage.com/d/brake-pads/ford/ford-mondeo/mondeo-saloon-2007-to-2014/1-6-tdci-115-1560/products/3282862-6237-100896/brembo-front-brake-pads-full-set-for-front-axle-

and both products claim to already offer, bizzarely, 17% off.

mgbgt1978 · 21-01-2021 10:27pm

How is the OP aware that the Garage added exactly 18.5% to the Retail Price of the parts ?
It was hardly on the invoice !!!

Is the OP just comparing what he/she was charged against the micks garage price (for example) ?

Fair enough, the garage buys the parts from a local motor factors....gets a trade discount....adds the discount back on to the bill, etc.
But where did this 18.5% come from ?

Ricta · 22-01-2021 1:55pm

mgbgt1978 wrote: »

How is the OP aware that the Garage added exactly 18.5% to the Retail Price of the parts ?
It was hardly on the invoice !!!

Is the OP just comparing what he/she was charged against the micks garage price (for example) ?

Fair enough, the garage buys the parts from a local motor factors....gets a trade discount....adds the discount back on to the bill, etc.
But where did this 18.5% come from ?

When I received the quote I did some looking in places like Micksgarage etc. and noticed quite a difference in the part price, same brand part as in the quote, LUK. I rang the garage to see if they had made a mistake. They told me how much their supplier charges them for the part and that the extra in the price in the quote is their margin. The maths on the two figures give an 18.5% margin.

I then rang the parts dept. of the local main dealer for my car and asked how much would the part be to me as a non-trade price (to my mind that is retail price), I was quoted the exact same figure as the garage said their supplier was selling it to them for. He also said that if I was willing to wait for a slower delivery, he could get lower prices from outside sources for LUK or Sachs parts.

I had a conversation with the guy in the parts dept. about garages adding a markup to parts prices, he said that was normal, they either add it to the parts or thay charge more for labour. He asked me what the labour was in the quote, there was a slight intake of breath and an opinion expressed that the labour costs were on the higher side, which would seem at odds with adding 18.5% to the retail price of the parts.

I understand that the guy is trying to run a profitable business, I would understand a markup from trade price to "retail price", probably even a bit more. I'm wondering how this particular markup would compare with other garages practices. Does the labour look like it's on the higher end of a normal range?

It would seem that all that matters in a quote is the bottom line price, that different garages will spread the markup between labour and parts, some may find it useful to put it in the parts to make the labour seem more competitive, or vice versa, or, indeed, charge well for labour and put a good markup on parts as well.

There are a lot of car owners who would not be aware of this practice and thus would not be able to do an informed shop-around.

mickdw · 22-01-2021 2:08pm

Ricta wrote: »

When I received the quote I did some looking in places like Micksgarage etc. and noticed quite a difference in the part price, same brand part as in the quote, LUK. I rang the garage to see if they had made a mistake. They told me how much their supplier charges them for the part and that the extra in the price in the quote is their margin. The maths on the two figures give an 18.5% margin.

I then rang the parts dept. of the local main dealer for my car and asked how much would the part be to me as a non-trade price (to my mind that is retail price), I was quoted the exact same figure as the garage said their supplier was selling it to them for. He also said that if I was willing to wait for a slower delivery, he could get lower prices from outside sources for LUK or Sachs parts.

I had a conversation with the guy in the parts dept. about garages adding a markup to parts prices, he said that was normal, they either add it to the parts or thay charge more for labour. He asked me what the labour was in the quote, there was a slight intake of breath and an opinion expressed that the labour costs were on the higher side, which would seem at odds with adding 18.5% to the retail price of the parts.

I understand that the guy is trying to run a profitable business, I would understand a markup from trade price to "retail price", probably even a bit more. I'm wondering how this particular markup would compare with other garages practices. Does the labour look like it's on the higher end of a normal range?

It would seem that all that matters in a quote is the bottom line price, that different garages will spread the markup between labour and parts, some may find it useful to put it in the parts to make the labour seem more competitive, or vice versa, or, indeed, charge well for labour and put a good markup on parts as well.

There are a lot of car owners who would not be aware of this practice and thus would not be able to do an informed shop-around.

Not good enough in my opinion.
I think you are more than fair in how you are assessing you retail price.
A garage charging way over main dealer retail is not on.
Surely that is what trade pricing is for - to allow the garage to buy even at main dealer and still bill it out at a fair price while making some margin.

Eric Cartman · 22-01-2021 2:23pm

Also the garage may have to pay for the delivery van to come out with parts. If youre the only part needed that day in the van the mechanic might be paying a 10er to have that dropped out to him

Toyotafanboi · 22-01-2021 2:27pm

I think you're digging too deep OP, sorry. Unless you know who supplied the actual clutch kit in your car, you're comparisons aren't relavant. You're making asumptions based on the unknown.

Micksgarage isn't an accurate depiction of real world workshop pricing. A parts guy wouldn't have a bulls notion of an accurate labour time. I'd take the whole thing with a pinch of salt. It's too easy to be sucking his gums and agreeing with you that another workshops repair is dicey, after the fact.

Birka · 22-01-2021 2:29pm

Ricta wrote: »

I had a conversation with the guy in the parts dept. about garages adding a markup to parts prices, he said that was normal, they either add it to the parts or thay charge more for labour. He asked me what the labour was in the quote, there was a slight intake of breath and an opinion expressed that the labour costs were on the higher side, which would seem at odds with adding 18.5% to the retail price of the parts.

So in this case, is it cheaper to get the work done with the main dealer?

mickdw · 22-01-2021 4:11pm

Toyotafanboi wrote: »

I think you're digging too deep OP, sorry. Unless you know who supplied the actual clutch kit in your car, you're comparisons aren't relavant. You're making asumptions based on the unknown.

Micksgarage isn't an accurate depiction of real world workshop pricing. A parts guy wouldn't have a bulls notion of an accurate labour time. I'd take the whole thing with a pinch of salt. It's too easy to be sucking his gums and agreeing with you that another workshops repair is dicey, after the fact.

So its ok for garage to be billing customer 18 percent more than the main dealer parts counter full retail figure?

DaveyDave · 22-01-2021 4:19pm

mickdw wrote: »

So its ok for garage to be billing customer 18 percent more than the main dealer parts counter full retail figure?

Yes. They can charge whatever they want. It's up to the customer to go elsewhere if they think they're getting ripped off.

Toyotafanboi · 22-01-2021 4:46pm

mickdw wrote: »

So its ok for garage to be billing customer 18 percent more than the main dealer parts counter full retail figure?

Yeah, absolutely.

Sometimes main dealers are cheaper than aftermarket suppliers.

There's still no confirmation from OP that we are comparing exact like for like here, as in, same part from same supplier.

I can see the headlines now, "different part from different supplier in different price shocker".

The OP was offered a price, that we don't even know to be outlandish, just that it was more expensive that a different price, that we don't know is a bargain. They were offered a price, accepted and the job was done.

Buyers remorse IMO, the time for shopping around was before the work was started. We've all been there with something or other before.

bladespin · 22-01-2021 5:08pm

Always assumed 30% was standard, looks like you've actually found yourself a bargain

mickdw · 22-01-2021 5:48pm

Toyotafanboi wrote: »

Yeah, absolutely.

Sometimes main dealers are cheaper than aftermarket suppliers.

There's still no confirmation from OP that we are comparing exact like for like here, as in, same part from same supplier.

I can see the headlines now, "different part from different supplier in different price shocker".

The OP was offered a price, that we don't even know to be outlandish, just that it was more expensive that a different price, that we don't know is a bargain. They were offered a price, accepted and the job was done.

Buyers remorse IMO, the time for shopping around was before the work was started. We've all been there with something or other before.

Well i wouldnt pay it. Fair enough i would have worked it out before agreeing but if for example i priced a clutch and flywheel at 700 at main dealer, id be quick to walk away from garage who would price the part at 825.

Toyotafanboi · 22-01-2021 5:53pm

mickdw wrote: »

Well i wouldnt pay it. Fair enough i would have worked it out before agreeing but if for example i priced a clutch and flywheel at 700 at main dealer, id be quick to walk away from garage who would price the part at 825.

That's how shopping around works, it's much easier and more fruitful before the job is done though.

colm_mcm · 22-01-2021 6:31pm

bladespin wrote: »

Always assumed 30% was standard, looks like you've actually found yourself a bargain

30% on what though? cost?

Hellrazer · 22-01-2021 6:52pm

The thread title is a bit misleading as Margin and Mark up are 2 different things.

Say I buy something for €70.00 and I sell it for €100.00 the margin on it is €30.00 or 30% MARGIN.

Mark up is different.

Same example the MARKUP is 43%.

Profit margin shows profit as it relates to a product's sales price or revenue generated. Markup shows profit as it relates to costs.

I wouldn't be happy with an 18% mark up in the parts department as 18% mark up is only around 15.5% profit.

Most main dealers aim for 25-30% MARGIN (43-53% MARKUP) on parts overall. That's when you take into account warranty parts rates / trade discounts etc.

Dirty Nails · 22-01-2021 7:00pm

Back in the good old days of block exemption rules,main dealers were bound by their contract to abide manufacturers RRP. Whether they all did or not is another story.

Main dealer party are sometimes cheaper than spurious parts.Ford & Opel were good examples.

Another example is a Purflux oil filter from a factors costing a garage €3 more than a genuine Peugeot branded Purflux filters retailed at.

newmember2 · 22-01-2021 8:03pm

bladespin wrote: »

Always assumed 30% was standard, looks like you've actually found yourself a bargain

You're saying if you needed a set of brake pads fitted, you'd be happy to pay the mechanic 30% more for the pads than what you could buy them for yourself??
As said, surely the profit the mechanic makes on parts is his trade discount against selling on to the customer at retail price. Added to this are mechanic labour rates that any brickie or whoever would be more than delighted with. The extra in labour cost should be offsetting the overheads of the mechanic IMO.

User1998 · 22-01-2021 8:16pm

If someone wants to buy parts at the lowest possible prices than they should try source the parts themselves. The mechanic is essentially acting as a middle man and making a profit on the parts they supply to you. They are entitled to do this as after all they are a business supplying you with goods and a service which they are of course entitled to make money on. As said above you should shop around and do some research if you want the lowest possible price. Leaving your car in and not having to worry about sourcing parts, phoning several suppliers, arranging collection/delivery is surely worth something?

mickdw · 22-01-2021 9:53pm

User1998 wrote: »

If someone wants to buy parts at the lowest possible prices than they should try source the parts themselves. The mechanic is essentially acting as a middle man and making a profit on the parts they supply to you. They are entitled to do this as after all they are a business supplying you with goods and a service which they are of course entitled to make money on. As said above you should shop around and do some research if you want the lowest possible price. Leaving your car in and not having to worry about sourcing parts, phoning several suppliers, arranging collection/delivery is surely worth something?

Yes its worth something and anyone would be happy to give them a decent margin but if that results in the part being billed out to the customer at 20 percent over main dealer retail, there is something a miss.
For oe standard parts, the garage would want to be maxing out at main dealer retail price on average.

bucketybuck · 22-01-2021 10:09pm

If I'm not getting at least 20% on the parts then frankly I'm not interested in selling them, jog on and buy your own.

And its 20% on my actual cost price thank you, not whatever cost price you think I should have paid. If you think I should be getting them cheaper elsewhere then again, feel free to go and get them yourself. I won't cry none.

Its worth pointing out while you have time and leisure to ring multiple different suppliers comparing prices on the few bits that you need, an independent mechanic with multiple cars to fix and dozens of parts to buy, well at some point he needs to actually get to work rather than farting about chasing parts.

They all price check as best they can, of course they do, but they aren't dedicated parts suppliers so course there is going to be variance in the prices.

Dirty Nails · 22-01-2021 10:32pm

newmember? wrote: »

You're saying if you needed a set of brake pads fitted, you'd be happy to pay the mechanic 30% more for the pads than what you could buy them for yourself??
As said, surely the profit the mechanic makes on parts is his trade discount against selling on to the customer at retail price. Added to this are mechanic labour rates that any brickie or whoever would be more than delighted with. The extra in labour cost should be offsetting the overheads of the mechanic IMO.

The problem arises when private customers can buy parts at trade prices.They are trade prices for a reason. Then of course there's the vat,23% as opposed to 13.5%.

Tesco won't sell you a loaf at the same price it paid Pat the Baker

Just to add,since when is a brickie (while skilled) as qualified as a good mechanic ? Also,his biggest overhead is a trowel & the odd pair of boots.

mickdw · 22-01-2021 10:35pm

bucketybuck wrote: »

If I'm not getting at least 20% on the parts then frankly I'm not interested in selling them, jog on and buy your own.

And its 20% on my actual cost price thank you, not whatever cost price you think I should have paid. If you think I should be getting them cheaper elsewhere then again, feel free to go and get them yourself. I won't cry none.

Its worth pointing out while you have time and leisure to ring multiple different suppliers comparing prices on the few bits that you need, an independent mechanic with multiple cars to fix and dozens of parts to buy, well at some point he needs to actually get to work rather than farting about chasing parts.

They all price check as best they can, of course they do, but they aren't dedicated parts suppliers so course there is going to be variance in the prices.

Yes thats perfectly acceptable but do you often sell parts out to customers at 18 percent above full retail from main dealer?

bucketybuck · 22-01-2021 10:38pm

Dirty Nails wrote: »

The problem arises when private customers can buy parts at trade prices.They are trade prices for a reason. Then of course there's the vat,23% as opposed to 13.5%.

Tesco won't sell you a loaf at the same price it paid Pat the Baker

In my opinion "Trade prices" became meaningless a long long time ago. Any guy off the street can go to a dealer or motor factor and get the same prices as the independent mechanic can.

It's simple economics, one motor factor started selling cheaper to the general public and the rest had to follow or be left behind.

Used to be there were trade customers and retail customers, now there are just customers full stop.

Dirty Nails · 22-01-2021 10:43pm

bucketybuck wrote: »

In my opinion "Trade prices" became meaningless a long long time ago. Any guy off the street can go to a dealer or motor factor and get the same prices as the independent mechanic can.

It's simple economics, one motor factor started selling cheaper to the general public and the rest had to follow or be left behind.

Used to be there were trade customers and retail customers, now there are just customers full stop.

That's very true. They were the days that even garage staff didn't get proper discount

Margin/markup on parts

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