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Margin/markup on parts

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24

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    #32
    bucketybuck
    Registered Users Posts: 18,175 ✭✭✭✭bucketybuck


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

    If I had to pay full retail from the main dealer in the first place, then yes I am sticking a mark up on top of that. If I can't do that then refer to my request to go get them yourself and save me the hassle.

    And please don't assume that all garages get all parts cheaper from the dealers. I have been on both sides of that equation, I have often had to pay full retail for parts and as a main dealer I also regularly charge full retail for the parts.

    Again, it is a margin on top of my actual cost price. If that cost price was the dealers full retail, then that is what it is.


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    #33
    Toyotafanboi
    Registered Users Posts: 12,917 ✭✭✭✭Toyotafanboi


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

    What are you saying should happen here?

    That every mechanic should make sure every part he ever supplies isn't cheaper at a main dealer?


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    #34
    silver2020
    Registered Users Posts: 2,045 ✭✭✭silver2020


    in many areas you have the "trade premium" and mostly its 15% - 20%

    This would include shopfitters, builders, plumbers and I would suspect car repairs.

    People in business/trade understand this and expect it, but usually when dealing with joe public, a simple gross cost of parts/good would be shown.

    Looks like the place was being too transparent


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    #35
    kirving
    Registered Users Posts: 5,911 ✭✭✭kirving


    Toyotafanboi wrote: »
    What are you saying should happen here?

    That every mechanic should make sure every part he ever supplies isn't cheaper at a main dealer?

    20% on whatever the mechanic pays is probably fine for the majority of bits - it's a few quid which covers their time to look up, collect, etc. No prob.

    But 18% on a clutch and flywheel kit is at least an extra €100. That's steep for what is the same work as any other part. Running a business is fine, but when customers think they're being taken advantage of, they'll never come back.


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    #36
    mickdw
    Registered Users Posts: 23,281 ✭✭✭✭mickdw


    Toyotafanboi wrote: »
    What are you saying should happen here?

    That every mechanic should make sure every part he ever supplies isn't cheaper at a main dealer?

    I said on average, parts pricing wouldnt want to be above main dealer pricing.
    I think the trade people here are making excuses re pricing. The main audi dealer has been known to knock off 10 percent for me after buying a few hundred euro worth on consecutive weeks.
    High turnover garages paying full retail is hard to swallow.


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    #37
    Toyotafanboi
    Registered Users Posts: 12,917 ✭✭✭✭Toyotafanboi


    Kevin Irving wrote: »
    20% on whatever the mechanic pays is probably fine for the majority of bits - it's a few quid which covers their time to look up, collect, etc. No prob.

    But 18% on a clutch and flywheel kit is at least an extra €100. That's steep for what is the same work as any other part. Running a business is fine, but when customers think they're being taken advantage of, they'll never come back.

    My issue with this is we are all working with arbitrary numbers and arbitrary brands.

    We don't know what OP paid or where it came from, we don't know what the main dealer price was or where it's coming from.

    Literally nothing here to suggest the OP was stitched up here, bar they have found out that they didn't get the absolute cheapest article on the market.

    Just because one number is higher than another, doesn't automatically mean someone got done.


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    #38
    Henry Ford III
    Moderators, Business & Finance Moderators Posts: 17,638 Mod ✭✭✭✭Henry Ford III


    Without markup there's no gross profit. No jobs.

    There isn't a successful business without markup in some way or form.


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    #39
    newmember2
    Registered Users Posts: 2,594 ✭✭✭newmember2


    Henry Ford III wrote: »
    Without markup there's no gross profit. No jobs.

    There isn't a successful business without markup in some way or form.

    How isn't there - he's a mechanic not a motor factor - he gets paid for his time and skill - that's his business.


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    #40
    khaldrogo
    Registered Users Posts: 1,572 ✭✭✭khaldrogo


    Just going on the labour..... That would work out to be between 4+5 hrs labour. For a clutch and flywheel. That's about right IMO.

    I would imagine the parts would be 500 to 700 depending on make

    We are usually between 1000e and 1400e for a clutch and flywheel depending on cost of parts and make of vehicle.
    Ricta wrote: »
    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?


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    #41
    Stihl waters
    Registered Users Posts: 715 ✭✭✭Stihl waters


    "Slight intake of breath " I'd say he did alright op


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    #42
    Hellrazer
    Moderators, Arts Moderators, Recreation & Hobbies Moderators Posts: 10,592 Mod ✭✭✭✭Hellrazer


    Toyotafanboi wrote: »
    My issue with this is we are all working with arbitrary numbers and arbitrary brands.

    We don't know what OP paid or where it came from, we don't know what the main dealer price was or where it's coming from.

    Literally nothing here to suggest the OP was stitched up here, bar they have found out that they didn't get the absolute cheapest article on the market.

    Just because one number is higher than another, doesn't automatically mean someone got done.

    Exactly - we don't know how much he paid. What the parts cost the mechanic.

    Where did the 18.5% come from?
    Its a strange figure as most trade discounts are usually round figures ie 10%15% etc.

    Also If im adding on a percentage it would usually be the same - a nice round figure to work with.

    Im the same a you - probably got the job done, paid the mechanic and then someone said "sure I got mine cheaper" in X.

    Op goes off and scours the net for pricing and realises the part can be bought cheaper than they paid.

    I posted here a while back about a civic rear axle. Quoted the job using genuine parts and then a number of poster linked to an ebay special - its not like for like.

    The other side of this is that most mechanics wont fit parts that they don't supply.

    For a few reasons - they get a trade discount and can make a few quid on the part , they know where they got it,the quality of it and the fact that they can return it if its incorrect.

    Theres more to being a mechanic than just swinging tools.


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    #43
    Stoolbend
    Registered Users Posts: 1,285 ✭✭✭Stoolbend


    The garage markup covers a warranty too. If you supply parts and they become faulty you'll have to pay labour. If the garage supplies them they'll have to suck it up or chase the supplier which often isn't worth the time it'd take.


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    #44
    Del2005
    Registered Users Posts: 18,915 ✭✭✭✭Del2005


    newmember? wrote: »
    How isn't there - he's a mechanic not a motor factor - he gets paid for his time and skill - that's his business.

    He had to look up the part number, order them and make sure they are correct when they arrive and if they aren't correct he has to then order new ones.

    You are free to source your own parts but then if they don't fit which happens a lot even when ordering off a main dealer, for my last few cars none of the online sites had the incorrect headlight bulbs and all my cars where as they came from the factory, you then have to pay for the ramp space in the garage while you try to source the correct part all the time you've no car.

    Why do you think it's OK for some companies to make a profit on parts like motor factors, distributors and manufactures but not others? If a business doesn't make a profit it won't last long.


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    #45
    bladespin
    Registered Users Posts: 7,334 ✭✭✭bladespin


    colm_mcm wrote: »
    30% on what though? cost?

    Yep, take your buying price, divide by 7 and multiply by 10.


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    #46
    Buddy Bubs
    Registered Users Posts: 3,515 ✭✭✭Buddy Bubs


    newmember? wrote: »
    How isn't there - he's a mechanic not a motor factor - he gets paid for his time and skill - that's his business.

    Would you be happy if I said the markup is for knowing which part is needed in first place?
    How would you react if the mechanic said yes, I can fix it for you, you go order the parts, get them to me and I'll start work.

    You wouldn't know how which parts were needed, even if you did you'd spend ages researching cheap prices then research how to get them delivered cheaply and quickly adding more time.


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    #47
    newmember2
    Registered Users Posts: 2,594 ✭✭✭newmember2


    Buddy Bubs wrote: »
    Would you be happy if I said the markup is for knowing which part is needed in first place?
    How would you react if the mechanic said yes, I can fix it for you, you go order the parts, get them to me and I'll start work.

    You wouldn't know how which parts were needed, even if you did you'd spend ages researching cheap prices then research how to get them delivered cheaply and quickly adding more time.

    As I said above, if I go to a mechanic I expect to pay him for his time and skill to complete the job. I expect him to supply any parts needed for the job, but I don't expect him to be inflating the price of the parts needed.
    As it happens, I don't go to a mechanic very often, and when I do I've already sourced the parts for the job. I wasn't aware mechanics made a profit on parts they supplied.


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    #48
    the_pen_turner
    Registered Users Posts: 7,506 ✭✭✭the_pen_turner


    why should anyone sell you something for the same as they bought it for.
    you think all the markup is profit and goes into the owners back pocket
    that mark up covers the headache scourcing the parts and any warrnty work because of those parts including new parts and the labour fitting them plus the lost income that should have been made during that time

    why should the garage put a warranty on those parts and all the liability that goes with it for no reward


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    #49
    PCeeeee
    Registered Users Posts: 1,465 ✭✭✭PCeeeee


    Dirty Nails wrote: »
    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.

    4 year Apprentiship same as a Mechanic.

    Van & a mixer would be the biggest overheads but he'd probably want a bit more than a trowel and a pair of boots. He's alsolikely paying at lad to keep the blocks and muck thrown up to him.


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    #50
    mickdw
    Registered Users Posts: 23,281 ✭✭✭✭mickdw


    the_pen_turner wrote: »
    why should anyone sell you something for the same as they bought it for.
    you think all the markup is profit and goes into the owners back pocket
    that mark up covers the headache scourcing the parts and any warrnty work because of those parts including new parts and the labour fitting them plus the lost income that should have been made during that time

    why should the garage put a warranty on those parts and all the liability that goes with it for no reward

    In my own game, outlay goes on the invoice as exactly what it was and is recovered from client sometimes at a much distant date!
    Mechanics job is different and ive no issue with markup assuming he can buy it at a trade price
    to allow him invoice it out at a price equal to what i can but it at. Im not talking about comparing to the cheapest m factors crap i can get. Main dealer price was the comparison here all along.


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    #51
    trellheim
    Registered Users Posts: 5,864 ✭✭✭trellheim


    if I go to a mechanic I expect to pay him for his time and skill to complete the job. I expect him to supply any parts needed for the job, but I don't expect him to be inflating the price of the parts needed.

    Cobblers. If he's had to figure out the part number required from an expensive-to-access database, source it, get it ( at his cost until you pay him) , store it, unpack it etc then he's more than entitled to charge whatever he wants.

    There's things wrong with the motor trade but markup on parts isnt one of them

    In any event what do you care ? Final figure at the bottom of the page is all you should be looking at anyway because its not a choice - those parts are on the motor now


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    #52
    bucketybuck
    Registered Users Posts: 18,175 ✭✭✭✭bucketybuck


    mickdw wrote: »
    Mechanics job is different and ive no issue with markup assuming he can buy it at a trade price
    to allow him invoice it out at a price equal to what i can but it at.

    So you have no issue with markup as long as it suits you.

    I think you have an incomplete understanding of the economic transactions involved.


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    #53
    Buddy Bubs
    Registered Users Posts: 3,515 ✭✭✭Buddy Bubs


    I was financial controller and now general manager of a business where we attend business premises and make repairs, usually urgent.
    Credit controller escalated a case to me a few weeks back where we attended a call in Offaly, out of hours, and solved a problem for the client. Client wouldn't pay. All he saw was the 20 mins on site.
    Took our technicians about 20 mins (always send 2 to each job because of size/weight of product and height involved holding ladders etc) he diagnosed fault, changed a sensor and got docket signed. On site for about 20 mins.
    We marked up the part by 30% and charged the client 6 hours out of hour labour 2 men x 3 hours.
    They got a fairly fruity bill I will admit, but we had to pay 6 hours wages, diesel bill for 200kms, tolls and price of the part plus absorb our overheads.
    Plus every job contains an element of paying the admin staff, the sales manager who negotiated the contract, the person that took the call and the person to process the docket and send an invoice, the credit controller to chase payment, escalated to me, insurance, premises overheads to pay the storage of parts, stores manager to order and keep stock levels up, the depreciation on the van and the tools they need to carry.
    Are we going to supply parts for whatbwe paid for them? Like f**k we are.
    Your mechanic has some if not all of these costs in their business so he can't be expected to spend time ordering parts and supplying them at cost. He is not excluded from being a motor factor as someone said.


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    #54
    James Bond Junior
    Registered Users Posts: 5,130 ✭✭✭James Bond Junior


    A good mechanic won't be pricing parts all morning. He will be calling in what he needs to get as many jobs done in as short a turn around as possible. Ringing around to see who has the cheapest clutch kit or pads is costing time and time is money. Ask any busy mechanic what's the fastest way to lose money and he will tell you cars taking up space on a lift not being worked on with 3 cars in the yard waiting to go in its place. An efficient mechanic wants your car the night before or first thing in the morning so he knows what is being ordered from the factors and cars spend as little time on the lift as possible.


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    #55
    mickdw
    Registered Users Posts: 23,281 ✭✭✭✭mickdw


    bucketybuck wrote: »
    So you have no issue with markup as long as it suits you.

    I think you have an incomplete understanding of the economic transactions involved.

    Ive no issue with markup as long as im not paying more than at my local main dealer - after all, they also have staff costs, time finding part number on system, delivery, returns to deal with etc.
    If the main dealer can source a part from germany for example and have it at the dealership including picking in germany, delivery etc for the retail price, im not paying more for that part from someone else. If my mechanic has trade deal or can source similar good quality that then allows him mark up to come up to that price point, all is good. I will not be giving money on top.
    Its not about suiting me, its about reasonably costs. Its up to trader to have his trade suppliers at the right price, not thinking they can just stick 30 percent on top of what a main dealer down the road will sell the part at. - If a garage cannot at least match main dealer, they need a better business manager.


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    #56
    Del2005
    Registered Users Posts: 18,915 ✭✭✭✭Del2005


    mickdw wrote: »
    Ive no issue with markup as long as im not paying more than at my local main dealer - after all, they also have staff costs, time finding part number on system, delivery, returns to deal with etc.
    If the main dealer can source a part from germany for example and have it at the dealership including picking in germany, delivery etc for the retail price, im not paying more for that part from someone else. If my mechanic has trade deal or can source similar good quality that then allows him mark up to come up to that price point, all is good. I will not be giving money on top.
    Its not about suiting me, its about reasonably costs. Its up to trader to have his trade suppliers at the right price, not thinking they can just stick 30 percent on top of what a main dealer down the road will sell the part at. - If a garage cannot at least match main dealer, they need a better business manager.

    Get the job done at the main dealer and see how much they charge you for labour, which has to pay the parts guy/receptionist/fancy showroom etc. The parts might be cheaper there vs a independent garage but it'll cost you more and they'll also have a mark up on the parts. So it's OK for a main dealer to add a mark up on parts but not an independent garage?:confused:


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    #57
    mickdw
    Registered Users Posts: 23,281 ✭✭✭✭mickdw


    Del2005 wrote: »
    Get the job done at the main dealer and see how much they charge you for labour, which has to pay the parts guy/receptionist/fancy showroom etc. The parts might be cheaper there vs a independent garage but it'll cost you more and they'll also have a mark up on the parts. So it's OK for a main dealer to add a mark up on parts but not an independent garage?:confused:
    Not what i said.
    I said indy would want to have suitable trade suppliers to allow him have his mark up without being dearer than a main dealer.

    Its a simple enough idea. You cannot just add margin if it makes you uncompetitive - well you can try but nobody will use the service.
    The way people here are talking you would swear you can charge what you like and feck the customer.
    Sure why not get a taxi driver to take the parts down the road for ya too. He can buy them at main dealer price - add his 30 percent because he is worth it. You get the part in the door at 130% of main dealer price and add your 30 percent because after all you made the phone call.
    Customer pays 1.69 times main dealer price but sure its correct cause everyone entitled to margin..... thats just a silly example but everyone needs to be competitive and to say im having my 30 percent regardless is just head in the sand type stuff.


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    #58
    colm_mcm
    Registered Users Posts: 73,388 ✭✭✭✭colm_mcm


    Robalees wrote: »
    Takes about an hour to do the work

    You can do a clutch and flywheel in an hour?
    Are you looking for work?


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    #59
    the_pen_turner
    Registered Users Posts: 7,506 ✭✭✭the_pen_turner


    mickdw wrote: »
    Not what i said.
    I said indy would want to have suitable trade suppliers to allow him have his mark up without being dearer than a main dealer.

    Its a simple enough idea. You cannot just add margin if it makes you uncompetitive - well you can try but nobody will use the service.
    The way people here are talking you would swear you can charge what you like and feck the customer.
    Sure why not get a taxi driver to take the parts down the road for ya too. He can buy them at main dealer price - add his 30 percent because he is worth it. You get the part in the door at 130% of main dealer price and add your 30 percent because after all you made the phone call.
    Customer pays 1.69 times main dealer price but sure its correct cause everyone entitled to margin..... thats just a silly example but everyone needs to be competitive and to say im having my 30 percent regardless is just head in the sand type stuff.
    i agree that there is a point at which the customer wont buy from you but thats doesnt mean that you are wrong to charge more than that. it just means that the customer will go else where .

    at the end of the day a business has to charge enough to stay in business and profit is a big part of that. investing in new tools etc comes out of profit in a lot of cases


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    #60
    kirving
    Registered Users Posts: 5,911 ✭✭✭kirving


    Toyotafanboi wrote: »
    My issue with this is we are all working with arbitrary numbers and arbitrary brands.

    We don't know what OP paid or where it came from, we don't know what the main dealer price was or where it's coming from.

    A LUK clutch, DMF and other bits is likely to be be over €500 anywhere. I didn't get mine for a whole lot less than that, and a relation of mine works for a parts importing company so I got it at rock bottom price - noone in this country made any profit from it. It's current around €5-700 from MicksGarage depending on part number.

    Its possible that the dealer is less, but probable that they charge more than the motor factors for the branded part.

    But that's the ballpark number that 18% I'd being added to. So €90-125 to be made for calling up and collecting the part. That's pricing the ordering and collecting, of that part at around 2 hours of labour. That's expensive in my book.

    I'll be the first to say the mechanic should be compensated for their time, as I didn't just a few posts ago when someone was complaining about labor on a dodgy coil that "should take 2 minutes to fix", but I think that mark up is expensive.


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    #61
    mgbgt1978
    Registered Users Posts: 4,230 ✭✭✭mgbgt1978


    the_pen_turner wrote: »
    why should anyone sell you something for the same as they bought it for.
    you think all the markup is profit and goes into the owners back pocket
    that mark up covers the headache scourcing the parts and any warrnty work because of those parts including new parts and the labour fitting them plus the lost income that should have been made during that time

    why should the garage put a warranty on those parts and all the liability that goes with it for no reward
    In this particular case the garage didn't just charge the difference between Trade and retail prices. They apparently added 18.5% on top of the Retail Price (after they purchased the parts at a Trade price).


    When a garage buys parts from a motor factors (or main dealer) they will not take the hit for the cost of faulty parts. The garage will obviously have to cover the labour to replace any faulty parts, but they will return the faulty parts to their supplier and get a replacement.


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