Customer's buying their own parts

[Jonathan Ganther]

Hey guys. I'm new to the forum and was looking for this subject but couldn't find it. Sorry If I'm posted something that's already been discussed. I own a brake shop in Austin, TX. We do anywhere from 10-20 brake jobs a day. We only do brakes so I don't know how much full service auto shops deal with this problem but... Customers are constantly calling in claiming they've bought the best parts or they want to provide their own parts because they've done research and know what is best. This drives me crazy. First of all they don't know whats best. Then after being told no they get offended and act like tons of shops allow this. What is the best way to handle these customers? Just send them away? I'll quote them a price using our parts and they act as though its a rip off. What shops are doing this for their customers? I feel like I'm letting jobs get away from me. Any experience with this?

[FROGFINDER]

IF they ask please and thank me for talking to them I might use the supplied parts but with NO WARRANTY AT ALL!

[CMillet86]

You have to be firm and consistent. The only time I will install a customer supplied part is if it's a performance application, say a customer bought EBC rotors and brake pads or borla headers, something along those lines, labor rate goes up to account for lack of part profit though. Also a good idea I've heard a lot on here is to quit giving prices over the phone, sure you can price a brake job, but what if it needs a caliper, hose or both. Now you have to call that customer and tell them it's going to be more then it was quoted etc.

[dfrisby]

I to have been struggling with customer supplied parts. I always inform them that there is absolutely no warranty on customer supplied parts. Had a pickup in here last week that needed a transfer case. Quoted him a price to rebuild as well as a price to buy a reman. Money was an issue, so he called a friend that has a friend with the perfect transfer case for his pickup. He let me know he was bringing it in Friday morning, but had plans he needed his truck for Saturday. We pulled the t-case before he got here, and I had a bad feeling about the whole deal. Sure enough, he shows up with the wrong transfer case. I explained that there would be additional time billed because the truck couldn't stay in my shop all weekend and it takes time to shove it out and pull it in and everything. Customers that supply their own parts are usually to cheap to buy quality parts. I've decided to put an end to it and yesterday put signs up in the shop stating we do NOT install customer supplied parts for any reason. If they are buying the parts themselves, they can install them as well.

[LynxStarAuto]

This is a phenomena we are all dealing with I would have to believe. With things like YouTube fueling the DIY craze, and the typical mentality the public has of save every penny (they still spend a small fortune on lattes tho!) I think every shop owner will encounter it. I take these jobs on and charge my labor accordingly. As stated NO WARRANTY. I let the customer know that I cannot warranty the repair. Some are ok with it. Others get defensive, and take it elsewhere, and that is probably for the best.

 

Another thing I get a lot is a customer will call me to inquire on how much a certain repair will cost. For example "How much do you charge to do an alternator on X vehicle. This leads to the customer showing up with the vehicle and alternator so I can install it. I have mixed feelings about this. My SW says to just install it, collect the repair, and if there is a problem with the vehicle tell the customer are you trying to fix it for real now? Let me diagnose it, and sell you the correct repair. I have mixed feelings on this.

[Jonathan Ganther]

Thanks for the input. I think the biggest fear I have is that when I quote them what the fair labor is on the repair they'll go spout off on some review site about how expensive we are. I like the review sites because they provide me with new clientele constantly but the sites also have me tip toeing around aggressive, cheap customers. Customers don't understand, they think your just making X amount of dollars off them. So I'm hesitant to quote someone labor on replacing pads and rotors. They've gotten the parts for $75 at AutoZone and think "how hard could it be it's just brakes, probably cost me like $60 buck". And I agree with you, the way parts stores market themselves now along with DIY videos everyone thinks they're mechanic. It sure does make the sales parts of the job more difficult.

[ScottyP]

I also own a brake shop and in my first year I did install customer supplied parts on occasion. Over time I noticed a pattern with these people, they rarely showed up! Most likely they found some backyard guy to do it for $20 and a 12 pack, but didn't have the decency to call the shop to cancel. I quit doing it, no exceptions, and it doesn't bother me one bit if they don't like our policy. Let them go, they are not going to hurt you and only cause you grief. Focus on doing top notch work with quality parts and charging a fair price and you'll do just fine. After 4 years now I'm the go to brake guy in town and can barely keep up with the work.

 

Oh and if they need a reason I tell them it's a liability issue with our insurance company, that if their parts fail the insurance company has no recourse. They usually understand that. I even get one now and then that'll bring his parts back and let me do my job.

[Jonathan Ganther]

I also own a brake shop and in my first year I did install customer supplied parts on occasion. Over time I noticed a pattern with these people, they rarely showed up! Most likely they found some backyard guy to do it for $20 and a 12 pack, but didn't have the decency to call the shop to cancel. I quit doing it, no exceptions, and it doesn't bother me one bit if they don't like our policy. Let them go, they are not going to hurt you and only cause you grief. Focus on doing top notch work with quality parts and charging a fair price and you'll do just fine. After 4 years now I'm the go to brake guy in town and can barely keep up with the work.

 

Oh and if they need a reason I tell them it's a liability issue with our insurance company, that if their parts fail the insurance company has no recourse. They usually understand that. I even get one now and then that'll bring his parts back and let me do my job.

 

 

That's exactly what I've been telling them. "Our insurance won't allow us to install customer parts for liability reason's but let me give you a quote with our parts anyway" I appreciate the input. Nice to hear of a brake shop dealing with the exact same issue.

[alfredauto]

When you're working for half the money the full money jobs are going somewhere else. As a rule we don't put on customer supplied parts unless we're sweeping the floor and washing the walls.

[xrac]

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[AJFA]

I have the same way of doing it as all you guys but I don't like to make it cut & dry, yes or no to their own parts installation.

 

So this guy calls and asks me if I will install his own exhaust pipe, he already had a good used part & clamps.

We are very busy at this time and I think it over, "what kind of car is it ask", a 2005 Audi A4 1.8T with 100000+ miles, I think, this car is a $$$$ money making pit. I say to him I will look at it and I only let a customer to bring his parts one time. I want to try to get them as a regular. He comes in & we look at it and he has the wrong pipe!!

 

He states he is tired of trying to save money on this job & for me to give him a price to fix it. We do our 27 point check & come back to him with a price for a new Audi center pipe & rear calipers, pads & rotors. He just spent $1500.00 here that we never would have seen if I said " we do not install customers parts".

Another guy this week couldn't get his Audi caliper bolts loose so he could replace pads. We turned that into a $500.00 job for a couple hours on the lift & I know he will return for other work, maybe even to do the brakes correctly.

 

I'm not saying I do this all the time, many times they are such a pain to deal with, I'm just saying I try not to just blow them off because I know if I do, we will never get another chance to see their car $$$$$$.

 

By the way, in NY we as a shop cannot work on a car without guaranteeing the job doesn't matter where the parts come from, part of repair shop law. Doesn't mean if I put a used muffler on I am on the hook to make it new, only that I did the job correctly.

Party on.

 

Dave

[skm]

Where I work we never use to install customers parts, but since ownership change we have also changed that . I for one don't think it is a good idea. One was the car diagnosed properly? You install the parts the customer brought in and they say the car isn't fixed etc.. leads to headaches that you don't need. Also you can not warranty the job. You also know the customer is bringing you the cheapest parts they could find. You install the brakes on a customers are and they are back a few weeks later complaining the brakes squeal. Now this can also give the shop a bad name if other customers are standing around and hear it , or if the person then starts spreading the word that you put brakes on their car and now it is squealing and you won't fix it right. Just like anything else too many people are eager to make a decision with out getting both sides of the story. Also you have to remember you also make money as a shop owner on the parts markup , so they supply the parts and you are loosing money there as well. You have a person come to your home to fix your a/c do you think they are going to allow you to go buy your own parts? Or even a plumber or electrician. You know the answer is going to be no. I think allowing customers to supply their own parts is just asking for trouble. Life is too short and our field of work is not an easy one why add more problems to it? After all aren't we all in this business as owners, techs, or future owners to make a living, to be able to provide for our families and to one day hopefully be able to retire and reap the benefits off all our hard work??

[Horse Stable]

We are a full service shop. We install customer supplied parts ALL the time.

We have a few polices with it. We guarantee to install the part correctly, but there is NO warranty.

Also, people who order these parts half the time bring the WRONG parts or they dont fit. Can be anything, brakes or cats.

If we take apart your car and the parts you brought dont FIT you have 2 options. Buy our part, or we put your car back together with your original part on it and still charge you the labor. We wont wait for a customer to order more parts for them to "save" $

Edited November 5, 2015 by Horse Stable

[mspecperformance]

The issue with having special policies about customer provided parts is that if the job doesn't go perfectly (their part working flawlessly) and even with a disclaimer you generally have a less than satisfied customer.

[ATSAutomotive]

We can't install customer supplied parts. As the professional, we become liable. There are tons of articles about this subject. Shops have gotten sued after installing customer parts that fail and they lose. We as the professionals are liable for the work we do, parts do not matter. I do not allow in our shop not only for this reason, but because parts & labor are how we profit in order to stay in business. We only use certain brands for certain jobs. We over time have come to find what good brands are and what bad brands to stay away from. Why? Because we are the professional! How many brakes, ball joints, calipers, Mass Air Flow Sensors, etc have we installed in our careers? We know what fails and what doesn't. Stand up, be proud of your profession and let them know exactly why we can't adhere to this practice. We deserve to make a profit and make a living for the work we do.

 

Still haven't even thought about taking my own steak to a restaurant. I feel great to pay others for the services they provide for me that I know nothing about. Home HVAC, not my thing, but I know who to call. Plumber!!! Got a company for that too.

[John 1972]

I have a local independent parts shop that I send customers to if they want to buy their own parts. They get a bit of discount, good quality parts and I get the difference between what they paid and what the parts should have cost me. Anybody else got a deal going with a parts supplier for referring business like this?

[mspecperformance]

I have a local independent parts shop that I send customers to if they want to buy their own parts. They get a bit of discount, good quality parts and I get the difference between what they paid and what the parts should have cost me. Anybody else got a deal going with a parts supplier for referring business like this?

 

What kind of margins are you getting back from the parts store?

 

I would be worried about the liability factor and attracting the wrong type of client. I can trace back all of my headaches to letting customer bring their own parts, use used parts etc.

[John 1972]

Getting 10-15% back on parts normally. The parts shop owner used to work as a Motorcycle mechanic so appreciates the level of skill and tools required today. His business is 90% trade so only stocks good quality parts and will treat any warranty claims as if I had bought the parts directly from him.

I think sometimes the customers think they are getting a better deal if they pay for the parts first then get them fitted. Maybe it just seems like that because they are handing over 2 smaller amounts of cash rather than one big amount.

[mspecperformance]

Getting 10-15% back on parts normally. The parts shop owner used to work as a Motorcycle mechanic so appreciates the level of skill and tools required today. His business is 90% trade so only stocks good quality parts and will treat any warranty claims as if I had bought the parts directly from him.

I think sometimes the customers think they are getting a better deal if they pay for the parts first then get them fitted. Maybe it just seems like that because they are handing over 2 smaller amounts of cash rather than one big amount.

 

 

What worries me is that you are getting say 12.5% on average margins. I am not sure if you are calculating Mark Up or Gross Profit Percentage. Lets just say we are talking about Gross Profit Percentage. Industry standard is around 50% Gross Profit on parts. If you are only making 12.5% on parts opposed to the recommended 50%, you would have to raise your labor rate significantly to compensate for the loss in parts profit.

 

We are also still not touching on liability if anything goes wrong etc.

[PAPShop]

We are a full service shop. We install customer supplied parts ALL the time.

 

We have a few polices with it. We guarantee to install the part correctly, but there is NO warranty.

 

Also, people who order these parts half the time bring the WRONG parts or they dont fit. Can be anything, brakes or cats.

 

If we take apart your car and the parts you brought dont FIT you have 2 options. Buy our part, or we put your car back together with your original part on it and still charge you the labor. We wont wait for a customer to order more parts for them to "save" $

 

Most of the time the answer is no because of liability, however we do make exceptions depending on the customer and the situation. We will NEVER install Ebay parts.... no matter what (turbos and exhaust systems are the most common Ebay crap that they want us to install) nor will we install customer supplied lift/level kits.

 

The quoted policies apply with one exception. If we take apart your car and the parts you brought are wrong, not only will we order and put in the correct part, but we will charge you hoist time for researching what part is the correct one and the wait time to have it delivered. And if this does not fix the problem we are not responsible for the wrong diagnosis, we did not diagnose your problem, we are only installing the part. This is explained when the car is dropped off. ---So, are you REALLY sure you brought in the right part?

[John 1972]

If you are only making 12.5% on parts opposed to the recommended 50%, you would have to raise your labor rate significantly to compensate for the loss in parts profit.

 

We are also still not touching on liability if anything goes wrong etc.

 

Forgot to say that I'm in Ireland not USA so things are slightly different regarding pricing but your points are still valid. Liability is with us if anything goes wrong.

 

Just recently we noticed some websites are shipping parts from Germany for significantly less than we can buy. We said this to our parts supplier and they can't match the prices either. This is just the way things are going now, so we made a decision to meet it head on.

 

There is a national vehicle Road worthiness test here so customers wait until the car fails the test and then have a list of faults to rectify. If they buy parts to rectify the faults from our supplier we will carry out the work at a slightly higher labour rate.

 

We won't let them supply parts from any other source.

 

Without a test fail sheet, we offer a vehicle check and let them make an appointment to get the parts fitted at a later date. We charge for the inspection and again a slightly higher labour rate.

 

Once they have been cleared by us to buy parts from our supplier, we get a cut of ANY parts, accessories etc they buy

[alfredauto]

Think about the headache when cheapo's parts are wrong. He's already got rock auto up on his screen when you call, and I'm pretty sure he's not willing to pay $200 for a bearing he can get for $39.99 which in his mind is the same.

 

Here's the bring your own eggs to the diner checklist, see if you want to opt in.

 

1. Customer states he is cheap and does not care about your bottom line.

2. Customer does not see a value in your warranty.

3. Customer does not respect your expertise.

4. Customer proves he can re-negotiate your estimate.

5. Customer will prove he can renegotiate your warranty policy via litigation, bad reviews, Facebook, etc when his part didn't fix the problem or failed prematurely.

6. Customer will refer his doper friends who pull the same sh!t.

 

No thanks its all bad. There are some exceptions, but not many.

[TheTrustedMechanic]

You install the brakes on a customers are and they are back a few weeks later complaining the brakes squeal. Now this can also give the shop a bad name if other customers are standing around and hear it , or if the person then starts spreading the word that you put brakes on their car and now it is squealing and you won't fix it right. Just like anything else too many people are eager to make a decision with out getting both sides of the story.

This is exactly what happened to me with one customer. She came to me to diagnose the problem with her A/C. The clutch was bad and would fail as it heated up . She complained about the price to replace the compressor since that was the only way to get the clutch. I don't blame her, 1300 for 3 months of real use each year was a tough pill to swallow. So she calls me a few weeks later to schedule the work. I say sure, let me check ont eh availability fo parts so I know how long it will take me to get them. "Oh. I already have the parts. I just need you to install them." Well the shop was a little slow so I recalculated the labor at a "Customer supplied Parts" rate kinda hoping that would scare her away. She paused and said, okay. She keeps her apointment and supplies, yes CHEAP parts. I mean these were to Chinese products what Chinese products are to quality products. But I installed them, recharged the system and all seemed to work well. Until, the stretch fit belt stretched and started to squeal. The original discussion about installing her parts and the work order both specifically stated there was NO WARRANTY whatsoever. She returned and wanted me to fix the squealing belt. After much investigation I found that the belt she supplied was the correct belt, based on ACDelco's catalog.but the NAPA ProLink catalog showed two belts with an obscure qualification with one belt being shorter. Guess which one her car took? Well based on the NO WARRANTY stipulation and the fact that the problem was based on her supplied parts, not improper installation of said parts I demanded she pay me to check it out. Then I quoted her the repair based on the ONLY belt available that day. She wanted me to put the car back together and let her go get the part and then install it for only the inspection charge. I refused and she refused the proper repair.

I now have a bad review on THREE sites because I

• created a FIRE HAZARD by installing the wrong belt
• wanted to charge her 150 to install a belt that her dealer installed for $40. (The OE belt list price was $24 and the 'booktime' to replace is .8 hr.)
• i took 6 hours to do the initial repair when I "told her it would be 4 hours." (expansion valve book time is 2.4, plus flush, plus R&R compressor,etc. etc.)
• I am "Quick to fly off the handle when you disagree with me" (especially when you deny what you read, acknowledged and signed)

[TheTrustedMechanic]

Think about the headache when cheapo's parts are wrong. He's already got rock auto up on his screen when you call, and I'm pretty sure he's not willing to pay $200 for a bearing he can get for $39.99 which in his mind is the same.

 

Here's the bring your own eggs to the diner checklist, see if you want to opt in.

 

1. Customer states he is cheap and does not care about your bottom line.

2. Customer does not see a value in your warranty.

3. Customer does not respect your expertise.

4. Customer proves he can re-negotiate your estimate.

5. Customer will prove he can renegotiate your warranty policy via litigation, bad reviews, Facebook, etc when his part didn't fix the problem or failed prematurely.

6. Customer will refer his doper friends who pull the same sh!t.

 

No thanks its all bad. There are some exceptions, but not many.

Can I swipe your list for future use? It serves many other "problems" in our profession too.

[TheTrustedMechanic]

So do you think I still install customer supplied parts? Well.......

Later this week I will be installing customer supplied parts for a gentleman I have know since I was 18. It is a battery door to cover the batter compartment on his shuttle bus. When he needed the underhood fuse block he asked me if it would be better for him to get it from the dealer and I told him, "No, it would be better for me to get it in case there is a warranty issue." Of course there were more discussions but he got the message. The only reason why he asked me to do the battery door was because he had already ordered it and has other issues for me to look at as well. Otherwise he would have put the door on himself.

 

If I install customer supplied parts it is only after much discussion. Usually only because the caller thought they could do the job themselves but were smart enough to identify when they were in over their heads. How many of us derive great pleasure from doing it ourselves? Not because we are cheap but because we like that feeling of accomplishment. I know I do. Call them kindred spirits but if they can identify that they can't do it after all, they understand the value of my knowledge, my skill, my investment in tools. I have gained some customers this way. They find their "I did it myself" fix from other areas. When I was young and too poor to take my cars in for repairs I would do research (in books at that time) and only go so far as I could put it back together to take it into a shop if I couldn’t do it myself after all. Of course I would then take the parts back to the parts store. I understood that I wasn’t buying parts and labor but I was buying a complete repair. So do I install customer supplied parts, well……..

[oktire]

I think some of the deal is the parts stores don't have a big enough margin between wholesale and end user. When we as a shop give an estimate for say pads and rotors over the phone the call the customer calls the parts store and sees they can save some money.

[3PuttFever]

I expect every retail service provider I use makes money on the parts and labor. I don't want to hassle with it. Some people will spend a dollar to save a dime. We have the privilege of dealing with all kinds of great and not-so great folks from time to time. We're respectful and don't install outside parts. Liability is the primary reason. The other is profitability. If a prospect doesn't want me to make a fair profit then I'm fine with losing their 'business'.

[totalautocare]

Here's one for everybody. Does your shop insurance actually cover it?

 

To many of your surprise, it won't!

 

My reply is generally, sorry sir/ma'am. Insurance won't cover it if something happens to you and I can't put you in a situation like that.

 

"But Bob's tire will.."

 

Sir/ma'am. Does Bob's tire know that there insurance likely won't cover you for your supplied parts?

 

Let's get you in, treated right, covered by our part and labor warranty with insurance covering you!

 

Sent from my SM-N900P using Tapatalk

[totalautocare]

Think about the headache when cheapo's parts are wrong. He's already got rock auto up on his screen when you call, and I'm pretty sure he's not willing to pay $200 for a bearing he can get for $39.99 which in his mind is the same.

 

Here's the bring your own eggs to the diner checklist, see if you want to opt in.

 

1. Customer states he is cheap and does not care about your bottom line.

2. Customer does not see a value in your warranty.

3. Customer does not respect your expertise.

4. Customer proves he can re-negotiate your estimate.

5. Customer will prove he can renegotiate your warranty policy via litigation, bad reviews, Facebook, etc when his part didn't fix the problem or failed prematurely.

6. Customer will refer his doper friends who pull the same sh!t.

 

No thanks its all bad. There are some exceptions, but not many.

Absolutely agreed. Instead of playing "let's make a deal" with the wrong customers, get out there and shake hands/kiss babies with the right people!

 

Sent from my SM-N900P using Tapatalk

[OOOooo]

One thing that has not been discussed is what part of town your shop is in an who your customers are. I am in a low income area and all my competition will use customer parts. There are 3 salvage yards very close to me so this is the situation that I have to deal with. If they use their parts they do not get my discounted labor rate (I learned that here), I will not mix my parts with their parts. If I put their pads on I will not turn the rotors. Guess who's fault it will be if the I did and the brakes squeak? Sometimes you have to play the hand you are dealt but you do the best you can.

[stowintegrity]

Let's face it - we make money supplying parts to our customers, and anyone that's not making a healthy margin on parts needs to re-evaluate why. For the record, we've stopped accepting customer-supplied parts on any job, regardless of who they are to us. The reason is simply that despite their "explanation" as to why they have their own parts, they're doing it to save a few dollars. They can always take them back to the parts store, and get a full refund. It's a non-issue.

 

This is an emotional (or psychological) challenge, not a financial one. Anyone that is still compelled to find someone to install their supplied parts is still operating under the belief that they can make the transaction less costly, less painful, or they think they'll be left feeling "better" about the visit, because they feel they can rest assured they weren't overcharged for the parts.

 

When someone asks me about installing their supplied parts anymore, we try to find out the real reason why, not give credit to the story that "I was going to have my brother do it, but he doesn't have the time, so I guess I already have the parts" When we USED to install customer supplied parts, I removed the discount I give on ALL my customers' estimates, telling people that the "Discount Labor Rate" is only eligible when we provide the parts. It was a 20% bump on the labor dollars at the time. Now, the stated "Standard Labor Rate" is 50% higher than the normal rate we offer.

 

I won't install customer-supplied parts for the very real liability it brings, but usually if I'm given the chance to ask some questions, I'm able to appease their concerns.

 

"Ma'am, the comparable quote for service at my shop has your parts costing about $18 more than what you paid for them at a discount parts store, but your service is backed by a 2 year/24k mile nationwide (parts & labor) warranty, not to mention that the brand caliber, relative quality of the parts I install has proven over the years to give thousands of our customers the greatest comfort & assurance of long-life & use. No more inconvenient break-downs, no more excuses....just enjoy that it'll do what it's designed to do, and for a LONG time. I'm sure if you make enough phone calls, you'll find someone willing to help you save that $18 by putting on your supplied parts, but it is really worth not having someone look you in the eye and tell you they're willing to be on your side, and stand behind every bit of the service?"

 

I'm really all about doing what I think is in their best interest, but all too often, the customer is either asking the wrong question, getting the answer they didn't want to hear, or they have some "head knowledge" they read on the internet that leaves them wondering. Give them someone they can always count on to stand behind them, and fight for their right to fair, competitive service that lasts.

Edited November 20, 2015 by stowintegrity

[alfredauto]

000ooo - we are in the statistically poorest county in NY. Low income people can't afford to pay twice to repair their car. They benefit from quality parts because its cheaper for them in the long run. You can definitly have a successful business in a low income area, it takes a little more work. Educate your customers on the value of quality, don't keep them down.

 

Speaking of quality, I suggest reading "zen and the art of motorcycle maintenance" by Robert Persig. It is not an automotive business novel by any means, but provides a good insight on "quality"

[CAautogroup]

We typically do not install customer supplied parts as well due to the fact that it ultimately leads to headaches and problems down the line.

 

But that being said, does anyone here have a sample waiver form / template they would like to share to protect against liability for that states the precautions etc?

 

Thanks in advance for your help.

[jamcneely]

We've played the customer supplied parts game before. We as professionals are liable for fit and function of any parts installed on a customers car. By the time you have determined it to be the correct part, installed it and found it doesn't work you could have easily sold this customer on the quality parts and labor you offer. We explain to our customers that our parts will fit and function as intended and come with a 2 year 24K mile warranty which includes towing, over night accommodations, rental car, etc. should it be needed. We want to be 100% responsible for the service we perform because in reality, whether we supply the parts or not, we are responsible. (at least in California) We also explain to them if they were to supply the part, we disassemble their car and find the part is not correct, faulty, etc. they can be liable to pay the hourly rate of rack time since it is keeping us from taking care of our other customers. Usually when its explained this way they return their parts and have us do the job because they would rather not have any worries.

 

Jerimy

[autoguy]

This is getting much more pronounced with the online auto parts stores selling parts cheap to everyone.

[ScottSpec]

I think we all know the endless list of reasons why it's a bad idea to install customer supplied parts. Many are listed here in this thread. If you do, or are considering using a customer's supplied parts, keep in mind, that you are 100% liable. You need to provide the same warranty, and liability insurance for their part, as you do to any other you sell. A signed waiver from the customer will not change the situation in any way. You may end up buying them new parts if theirs fails. You may also be held liable for any damage a failure causes. I highly suggest that you check with your insurance carrier to see if you have coverage for this. I know our garage keepers does not. 

I'm fighting with a customer right now. We did not install her part, but she came to us and asked us to replace her cam position sensor. When a customer comes to us and requests a part be replaced, we usually have a long discussion about why they want it replaced, and we recommend the customer have us do diagnostic work to confirm the part is in fact faulty. This customer was not interested in any of that. She just wanted the sensor replaced. So we did it, and when she came to pick up the car, she lets us she requested the wrong thing based on a miss-communication she had with someone else. 

Within 2 weeks she filed a complaint with the local consumer agency, the BBB, and then disputed the charge on her credit card because we did an "unnecessary repair" on her car by not testing the sensor first. Despite providing the CC company with all the documentation that she received exactly what she requested, at exactly the price quoted, they found in her favor saying I didn't present any documentation to address her claim. I'm now suing her in small claims court. The invoice clearly states replace cam position sensor at customers request. We'll see how that goes.

Now to the real point of my post. How to handle when a customer asks you to install their part. Rather than trying to have a discussion where you are trying to get the customer to understand your position, which is almost never going to happen because their desire to save money is just too strong. It becomes a negotiation, and they will keep at it. We tell our customers that our insurer won't allow us to install customer supplied parts. Sometimes I take it a little further and explain to them that my business license, landlord, and many of the other organizations I depend on, require me to have a minimum level of insurance and I cannot afford to lose those.

Scott    

   

[Topauto]

When asked if the customer can supply the parts I simply say , sorry we are not the shop you . Thanks for calling - goodbye and hang up 

[autoguy]

2 hours ago, ScottSpec said:

We tell our customers that our insurer won't allow us to install customer supplied parts. Sometimes I take it a little further and explain to them that my business license, landlord, and many of the other organizations I depend on, require me to have a minimum level of insurance and I cannot afford to lose those.   

I like it 👍

[Wheelingauto]

18 hours ago, ScottSpec said:

 We did not install her part, but she came to us and asked us to replace her cam position sensor. When a customer comes to us and requests a part be replaced, we usually have a long discussion about why they want it replaced, and we recommend the customer have us do diagnostic work to confirm the part is in fact faulty. This customer was not interested in any of that. She just wanted the sensor replaced. So we did it,
 

Scott    

   

When you allow consumers to dictate how you do business you loose. When they come in and say I want this done to my car the first question must be what are you trying to solve and the appropriate inspect/testing fee should be quoted. You may get push back but who the hell cares..Pass on it if they dont want you to be the professional.

[newport5]

This is a touchy and delicate situation.

When I get that call asking how much to put on their part, I groan a bit and say, “You know, most shops don’t like putting on customer’s parts. We have to guarantee the part even if we didn’t sell it to you. And the markup on that part is part of the normal profit margin.” Notice I haven’t said no yet. I made it sound like an industry standard, not just me. Then I ask how they know it needs that part. Is it their diagnosis, the car-guy in the neighborhood or another shop? And then the infamous: “Do you want me to just put that part on or fix your car?” (They hate that!). The truly cheap car owners don’t want to hear any more so the call ends soon. But I haven’t been an arrogant jerk and probably won’t get a bad review.

If they are still with me, they will ask for a quote. I think you have to quote a price. Here’s why:  if they call 5 shops and 3 give a quote, now they have something to work with. Why would they go to a shop where you have no idea how much it will cost?

Now we get to the part where you recommend determining the actual problem, where you diagnose it. The delicate part is when you come up with the same diagnosis. How can you charge them for something they think they already knew? You MAY have to eat that to get the job and the new customer – who has car-owner friends.

Luckily we don’t get those calls too often.

[Wheelingauto]

19 hours ago, newport5 said:

This is a touchy and delicate situation.

 

When I get that call asking how much to put on their part, I groan a bit and say, “You know, most shops don’t like putting on customer’s parts. We have to guarantee the part even if we didn’t sell it to you. And the markup on that part is part of the normal profit margin.” Notice I haven’t said no yet. I made it sound like an industry standard, not just me. Then I ask how they know it needs that part. Is it their diagnosis, the car-guy in the neighborhood or another shop? And then the infamous: “Do you want me to just put that part on or fix your car?” (They hate that!). The truly cheap car owners don’t want to hear any more so the call ends soon. But I haven’t been an arrogant jerk and probably won’t get a bad review.

 

In my mind it is a straight forward situation where a vehicle owner is trying to circumvent the proper steps in solving an automotive problem most of the time in an attempt to save money. Asking "Do you want me to put on the part of fix the car" can be taken as a challenge and also arrogant. Obviously they want the car fixed and are hoping the part is the answer, if it doesn't they will try to hold you responsible. More importantly if you entertain this sort of thing you are giving up control.

 

 

19 hours ago, newport5 said:

If they are still with me, they will ask for a quote. I think you have to quote a price. Here’s why:  if they call 5 shops and 3 give a quote, now they have something to work with. Why would they go to a shop where you have no idea how much it will cost?

But they have no facts to work with. They have 3 different prices. If they do happen to select you what basis did they have to make the decision?!? And most of the time after you've wasted time estimating up some sort of repair they say thanks and hang up and go away. You...just wasted valuable time entertaining a consumer when you could have been paying more attention to a customer who's car was in your shop. If the only value you have to win a new customer is giving stuff away you have BIG problems.

 

19 hours ago, newport5 said:

Now we get to the part where you recommend determining the actual problem, where you diagnose it. The delicate part is when you come up with the same diagnosis. How can you charge them for something they think they already knew? You MAY have to eat that to get the job and the new customer – who has car-owner friends.

 

 

No, we don't recommend it...we insist on it! We insist on testing or inspecting to find the root cause of your complaint and recommending a course of action that will effectively, efficiently solve that problem completely and we will stand behind it with an exceptional warranty. If you don't like our findings, don't want to afford our course of action that is ok, you can go about your day after paying us for the time we spent analyzing your problem. I love the thought we should work for free for an opportunity to get paying work... FREE BRAKE INSPECTIONS.....whats the incentive to tell them everything is ok? Cause you're the last good guy around...lol, until you are starving, then maybe those brakes dont look so good....

Free code checks... hopefully we'll get a car in the bay and then we can get paid.  BS!

I say you can all go work for free. If I am going to work for free it will not be to subsidize someones automotive ownership costs. I have value, I am a professional, I get paid for my expertise. If you wish to attempt to strip me of that expertise you can go elsewhere.

 

 

[newport5]

You’ve made me rethink this. I used to think I would take 5 minutes and hope to change their mind to the regular way to repair their car (versus them supplying the part) and get a new customer. As I look back, my success rate is very low. And I’d get a very frugal/cheap customer. Darn. And they probably just call shops until they find one who’ll put on their part.

Maybe I’ll aim for 2 minutes next time. 😉

I recall one caller who bought his parts at the Porsche dealer ! 

[Wheelingauto]

2 hours ago, newport5 said:

😉

I recall one caller who bought his parts at the Porsche dealer !

First off I hope they were the right parts...actually fixed the problem.

Secondly there is the aspect of a maintenance repair. Becky Witt often used this example. If a customer went out and bought all Honda parts for a timing belt/water pump replacement with the intent to do it themselves only to find out it was above them. Now, what? Junk parts... nope...that is most likely an exception to the rule. I think if I were to get that call I might just take my hourly overall gross profit average per hour from the last year and quote the job at that labor rate explaining how I came to that rate and at that point I would warranty it. If they went for it I am ok with it...but it is the rare exception. MOst of the time it's cheap fu%*s trying to save a buck.

 

 

[Wheelingauto]

9 minutes ago, CAR_AutoReports said:

We've had life long customers start to request to buy their own parts online, at an alarming rate.

They will come in and get a quote, leave... call back in a month when they want to do the service.  When they call, they indicate that they would like to bring their parts in and only pay for labor.  It puts everyone in a really difficult position.

In addition, we are also having fleet accounts price shop online and complain about our prices.  In many instances, we have had to show customers our purchase receipts to assure them, we are not "overcharging".

I personally, have been making noise about this for over 5 years and everyone generally brushes me off as an anomaly.  Yet, here we are... all becoming anomalies.  Our vision for parts in this industry is a little scary initially, but overall we think the outcome will just lead to much higher labor rates and parts at a 15% above cost model.  Welcome to the Costco model for Auto Repair.

There is at least one very successful shop I know of who marks up parts minimally and charges for actual labor times taken. I would assume the rate is higher than the traditional model. The problem with allowing customers to bring in their own parts is parts quality period. They dont know what is good and what is not. If it becomes that big a problem offer to supply parts at near cost (obviously you could negotiate a little back end money) and just raise the labor rate to account for it. In the end, same dollars, same level of service just different model.

[rpllib]

I believe one of the challenges we have in this industry is that there is a metric/kpi  that we do not embrace. If we spent some time tracking gross profit dollars per hour of tech/shop/equipment time, we might figure out quickly that we simply can't afford to install customer supplied parts at any of the old/average methods we have used in the past. In my shop we need to produce $140 in gross profit dollars for every hour the shop/tech/equipment is in production. That's to just start being happy/profitable. Even a tire tech in my store will produce $140 in gross profit dollars an hour of tech/shop/equipment time, mounting and balancing a new set of tires. Yet, in many cases when this subject come up, we are talking about tying up a seasoned technician on much higher skilled work, for substantially less gross profit dollars per hour. 

Same amount of tech/shop/equipment time is necessary, regardless of who supplies the parts or tires. All we really have ever sold is shop/tech/equipment time. Parts margin as a contribution towards the total shop charge, was decided on long, long ago. Likely because shop owners did not have the courage to charge enough "labor". 

It's yet to be seen, what if any factor of labor, will produce the same gross profit dollars. I haven't figured it out. The variables of sales mix and individual productivity  make it a moving target for sure. 

We may find that taking two minutes educating customers on the "why" of customer supplied parts, will help us as an industry, in the long run. We educate them to the fact that it saves very little (very little if any!) as shifts to a "shop rate", which is substantially higher than the labor rate by itself.  We frequently see a glimmer of understanding, when we explain that what we ultimately charge for, is the amount of time that our shop/techs and equipment are tied up.  

This industry has always been a test of our courage and educational skills.... 

[bstewart]

On 10/18/2018 at 10:38 AM, CAR_AutoReports said:

We've had life long customers start to request to buy their own parts online, at an alarming rate.

They will come in and get a quote, leave... call back in a month when they want to do the service.  When they call, they indicate that they would like to bring their parts in and only pay for labor.  It puts everyone in a really difficult position.

In addition, we are also having fleet accounts price shop online and complain about our prices.  In many instances, we have had to show customers our purchase receipts to assure them, we are not "overcharging".

I personally, have been making noise about this for over 5 years and everyone generally brushes me off as an anomaly.  Yet, here we are... all becoming anomalies.  Our vision for parts in this industry is a little scary initially, but overall we think the outcome will just lead to much higher labor rates and parts at a 15% above cost model.  Welcome to the Costco model for Auto Repair.

I've talked about this multiple times in the past on this forum.

I come from the heavy duty industry at a dealership, and this is the industry standard. Shop rates are in the $130-150 range, and most shops make 0-10% on parts. Dealer shop rates are $160-180.

The HD industry is a bit different than automotive, there is less aftermarket available, and OEM parts are generally priced somewhat competitive with the aftermarket anyways (in many cases cheaper), so there is not a huge amount to be gained by shopping around. It's a bit of a running joke among us that so many customers still think the dealer is "too expensive" when in reality the OEM part is much higher quality, but still on par or less money than the aftermarket.

Because many HD customers have fleets rather than single trucks, they generally buy a lot from the dealership, and they get volume discounts, while repair shops buy less from dealerships and get weaker discounts and in many cases pay retail prices. This is why many repair shops don't/can't markup their parts. A common markup is 1% on parts to cover administrative costs of ordering the parts. Even bigger shops that get volume discounts still only do a 10% markup in many cases. 20% markup on parts in the HD industry is pretty much unheard of.

Yes, part of the situation is that HD parts cost a lot more than automotive parts, but at the same time, HD repair shops have realized that what you are truly charging for is your EXPERTISE to fix problems, not selling parts. This is reflected in the higher labour rates.

[BOBBYK]

I’m sure it been said before but I look as it that we are in the Auto Repair industry not the hang your parts business. The only person that we makes out is the customer when they bring in there own parts is the customer. Why would anyone give up there profit and open themselves up to a problem if the customer has a problem with the work. In Maryland you must honor the warranty even if the customer supplied the parts.  We do not install customer parts at all. Also you will never get this person as a customer that will just go to the lowest priced shop they can find.  Is that really a good business model for our industry. 

[Guest]

Why would any of you feel ashamed or the need to make excuses for making a profit off of parts ?Every business makes money off of the product they sell.  How is it possible that everyone on here understands the shortage of qualified mechanics yet act like theres a surplus? 

What I've told people us that every bay in my shop is like a machine in a factory. It has to make me money. I have bills to pay. Not only am I giving away profit but what happens when the part is wrong? Now that car is trying up a bay (my machine) while I wait for them to get off of work, pick up their wrong part, fix THEIR mistake, bring (hopefully) the correct part back the next day or so, and then we can finish the job. Who's going to pay for the downtime for my machine? Are they willing to pay me for 1 1/2 days of idleness just so they can save $50? No. They only want to use you. After this, theyll be on to the next chump. Dont be that chump. 

[ScottSpec]

6 hours ago, CAR_AutoReports said:

I can't speak for everyone, but I can tell you I am not ashamed to make a profit.  This is business and the way to survive is to adapt.  If you can name one industry that has not adapted to consumer behavior and survived, I would be very happy to hear about it.  Consumers have long treated this industry as if we are all thieves.  Before the internet, they had no recourse.  With the internet, they can put you out of business in 30 days time, if not sooner.

 

The medium here for discussion is how we all thrive in an environment that is turning every industry upside down, not just this one.  Part of that comes with providing a streamline experience where people pay for your experience and not your parts.  If we, as a group, adapted the mentality of my labor is where I make money, and not my parts... there would be less ability for the consumer to create havoc in our environment.  As long as we sell parts for multiples of what we are paying for them, while our consumers can research prices on their own... is as long as we'll have the mentality that's made this industry the last one to transform and shake the horrid reputation we have with the general public.

 

If you buy anything at a national chain, from the groceries in your house, to the device you are likely typing this on... you are a consumer.  Put yourself in their shoes and realize we provide the worst experience known to man.  There are no trades left where parts have such an influence on business, like this trade.  If you work on fleets, ask their owners how their business is going and what challenges they are facing.  Most of the fleets we service, make less than 20% on parts and all of their meaningful revenue is generated by labor.  Why?  Because the consumer can go to Home Depot and buy everything for the same price they can.  The consumer just can't install it, they realized that... adapted to it and are now seeing the benefit of not worrying about how much money to make on parts and focus on labor costs and managing them.

CAR,

What are your suggestions? I have long considered just selling parts at my cost and adjusting my labor, or some other fee to compensate. I've suggested it here on AutoShopOwner before. It would reduce work load, eliminate a more and more harmful data point for customers to judge our pricing, and eliminate the need to explain to customer's why we need a margin on parts. As if customers really care about why we charge a markup at all. As shop owners we continually search for the best price on everything. From parts, supplies, tools, rent, insurance, etc.. We shop on Amazon, eBay, AliExpress, etc., but we get frustrated with customers when they do the same thing. If there is anyone here that pays supplier B more money for parts than supplier A because supplier B needs to make a higher margin to pay his bills, I would love to hear from them. 

Having said all that, I have just not been able to get myself to do it. It's a radical change and we would need to make sure we have a labor formula that works.

Scott   

[ScottSpec]

4 hours ago, CAR_AutoReports said:

Scott, 

Please call me  Ricardo, as I'm likely the one posting on this account.  I've been giving this some thought for a while now and I think I finally have a solution that I'm going to slowly implement.  So there's one caveat, I use our software to track real time and hold my guys accountable to use the timer system on jobs.  It's been an adjustment period, but all I had to do was show them one job where we would have lost a lot of money without it, and they saw the light.

So our plan is to gradually raise the labor rate, next month we are going up just over 10%.  We plan on adjusting accordingly throughout the year.  So we are picking a baseline to start from based on expenses and projected decline in parts revenue.  Higher labor is an easier sell when you have a good relationship with your customers and you can tell them, your parts are reasonably priced and show them if need be the comparison.  An example would be, my best selling avenue at the shop for tires is showing people... look, here's the price on TireRack, this is what I can do for you today.  When we do that, their defenses are usually immediately disarmed, because we showed them they are getting a fair deal.

With parts, the same logic is going to be applied.  The second I am questioned on a price, I can show them what it costs online and say... "It's just a bit more, and we get it locally and it's fully warrantied by us now." Going on the tested theory that no one will cry at 30% mark up & value your service by showing them, you're getting a really fair deal.  After all, this is all about perception.  If you charge $200 for a service and $100 is parts and $100 is labor, and the guy down the street charges $200 and $150 for parts and $50 for labor... the price isn't different.  How it's billed is.  But the perception that you provide when people pay for the quality you provide, is what turns customer defense off.  Because now they go home and check the part and they see, ok, he didn't really gouge me.  They can't go verify labor, because the guy on the other side of town might have a cheaper labor rate, but who knows if his quality is any good.

It's really a delicate balance that we are testing and figuring out as we go along.

In addition, we are still exploring how to implement a "Membership" like strategy, where we become a member service that looks out for it's members with a pledge like, parts plus 25% and a set labor rate.  Although this will have to be more thought out and will have to go through some trial runs with current customers.  I'm thinking membership would be something along the lines of a fee that includes 2 basic services for your vehicle for a year and because you signed on, you now get the perks of fair parts pricing and stable labor pricing.

But please don't hesitate to share your thoughts on this plan or your own thoughts.

Ricardo

Ricardo,

If we stopped worrying about parts margins, this business would be much easier to evaluate, predict, and make a profit. The current model, which most of us are still using, me included really leaves a lot to chance in this business. I could sit down in a few minutes and calculate how much each bay cost me, how much each tech cost me, and how many hours at what rate I need to charge to make sure I am profitable. While we use a standard markup, it is very difficult to know what dollar amount I am going to sell in parts. Think about this for a moment. You have an A tech that spends 6 hours removing a dash to replace a $80 blend door motor which also requires calibration with a scan tool that cost him a few thousand dollars, or as I like to say $200 a month. Next to him, you have a B tech who spends 6 hours replacing 6 sets of brake pads. The B tech generated the same amount of labor, but ~$400 more in parts, and probably makes half of what you paid the A tech. Is your business really doing better because you made sure you made your $40 on the blend door motor. If you sold the parts at cost, assuming you had a 50% margin, you would only need to raise your labor rate $20 to come out ahead. I just ran some numbers from last out of curiosity. If I raised my labor rate $55 and stopped marking up parts, I would be ahead of the game.   

We all talk about how important it is to charge for diagnostic time, and it is. However, it's the most cost intensive work we do, and since there are no parts sales to go along with it, it's also the lowest sales generator per hour.

Scott