Parts Markup?!?

[PARKSINDUST]

Hi guys I am new to the forum. I thought this would be a great place to talk to other shop owners about questions we have. Sometimes Alldata doesnt have everything you need and Google and Youtube actually come in handy lol... but hopefully in the future can have some other great minds help us.

My boyfriend & I started our shop in January. I asked a good friend of mine (she does bookkeeping & accounting) how people markup on parts. She said 47%.

 

When I call Napa, O'Reillys etc I ask for list price, but then list isn't what the "average Joe" can walk in and get it for. I cant go off of average joe price because we wouldn't still be in business. I cant sell it at manufacturer list either because that would mean taking an arm and a leg...

 

I meet in the middle, on small stuff markup more cause not a lot of room to move, and big stuff markup less. And dealer I just sell it at what dealer would sell it at, because I don't want someone going into our place or the dealership stating I sold it at less or more than dealer or vice versa. And then aftermarket parts I sell lower than MSRP. So if we do 20% markup we lose money, 45% on small stuff, 30% on bigger items? What does everyone mark their parts up? And just an FYI our labor rate is competitive from the rates other shops charge we are much lower at $80.00/hr whereas others charge $100.

 

Can someone please explain to me auto parts markup or how they markup or how I am doing it is okay for an auto shop?

 

Amanda S

Edited September 26, 2012 by PARKSINDUST

[xrac]

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[Joey N.]

I want to say first that i dont think there is one right answer to this question, every business and situation requires different standards. You need to find out what works best for you and how to remain profitable without taking advantage of anyone.

 

In the case of my business every job and situation is different, we mark up dealer parts from 15 to 50% and aftermarket parts from 50% to 150%. Lesser expensive parts are marked up higher than more expensive items, but once again every job is different.

 

Good luck

 

 

Hi guys I am new to the forum. I thought this would be a great place to talk to other shop owners about questions we have. Sometimes Alldata doesnt have everything you need and Google and Youtube actually come in handy lol... but hopefully in the future can have some other great minds help us.

My boyfriend & I started our shop in January. I asked a good friend of mine (she does bookkeeping & accounting) how people markup on parts. She said 47%.

 

When I call Napa, O'Reillys etc I ask for list price, but then list isn't what the "average Joe" can walk in and get it for. I cant go off of average joe price because we wouldn't still be in business. I cant sell it at manufacturer list either because that would mean taking an arm and a leg...

 

I meet in the middle, on small stuff markup more cause not a lot of room to move, and big stuff markup less. And dealer I just sell it at what dealer would sell it at, because I don't want someone going into our place or the dealership stating I sold it at less or more than dealer or vice versa. And then aftermarket parts I sell lower than MSRP. So if we do 20% markup we lose money, 45% on small stuff, 30% on bigger items? What does everyone mark their parts up? And just an FYI our labor rate is competitive from the rates other shops charge we are much lower at $80.00/hr whereas others charge $100.

 

Can someone please explain to me auto parts markup or how they markup or how I am doing it is okay for an auto shop?

 

Amanda S

[Mario]

Low working wages in the area, still crawling out of an economic recession, and a competitive auto repair market here. We charge 30% mark up on MOST parts. You mark up large parts here ($200+) it will throw your estimate to high and say bye bye to the repair job. Every customer seems to be a price shopper and they know the fair market price before they call or enter the door. I don't lose out on too many jobs with this method ($60/hr labor + reasonable 30% mark up). It would help to charge more, but it is either win the bid, or sit on the computer all day.

[Joe Marconi]

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[PARKSINDUST]

thank you for all the feedback! it helps a lot. Its harder explaining it to my other half/ business partner about price markup still and trying to be competitive and stay in business

[TTP]

Joe brings up a really good point, especially for all of us with a highly competitive market. Normal repairs have to be priced within a reasonable amount in order to stay in business. BUT on a specialty niches, you can, no you must charge more. Thats the only way you will stay in business and make alongside the low ballers. Trust me I know, I am in a very competitive market dealing with offroad and diesel performance. Everyone her is a DIYer- they can do it better than you, faster than you and cheaper than you...BUT run into trouble and the internet idiots can't give them a good answer, you are a GOD then. SO, for all those idiots that ask you every question under the sun, and have NO intention of using you are purchasing anything from you...You have to have a way to make up that time you lost and were unprofitable.

OK I will get off my sopabox now...just my nickels worth of advice from the school of hard knocks.