Dealing with customer supplied parts, lets share ideas.

[Silver Star]

So I had a customer the other day that decided to compare my pricing to a internet website. Well what he found was I was basically making 500.00 in profit off the parts sales and he didn't think he should have to pay for it. After getting over this myself and dealing with him tactfully I'm still waiting to hear if he is going to have us do the work or not after I gave him a 7.5% discount on the whole repair job in an effort to keep him a customer but understand he has to pay for quality work. It had me searching this forum for ideas on how to deal with this guy and I came up with a lot of great ideas and I figured I would share my list I made for myself to refer to the next time I have a customer telling me I should not charge him a fair price. I would like to get input from others on here on ways they have dealt with this too. I hope what we do is form an arsenal of ways to deal with this issue and a easy to access spot so when the battle is brought to us we can open it up and fire back with professional and effective ways of stopping the behavior.

 

*As a note a lot of these are ideas and info I gathered from guys on this forum, so please don't feel like I stole your idea. I did not make notes of who said what if I had I would certainly give you credit.

 

Ways of dealing with customer supplied parts:

-We have built a relationship over the past ____years/months, I want to nurture that rather than destroy it.

 

-We have a pricing structure based on MSRP, our cost on the part, and a fair margin we need to meet to stay in business while growing to meet the advances in the industry.

 

-Online parts sales centers are designed for the do it yourself repair person, they do not have the overhead cost for all of the tools and equipment related to doing the repair job.

Brake clean, shop rags, vehicle lift, indoor space to do repair, fluids, seals and gaskets, adhesives and liquid gasket materials, cleaning equipment, spare nuts and bolts.

 

-We simply cannot stay in business and meet the needs the vehicle requires if we are to install parts supplied by the vehicle owner.

 

-The liability on the repair is too great to use something I have no control over where it comes from.

 

-We cannot warranty the repair, and we want to guarantee our work. This is a craft we perform and a craft we take very seriously.

[mspecperformance]

All great ones. I lean on warranty, parts procurement and having the ability to provide a full service. Grocery store to restaurant analogy is s good one. You go through the motions and explain all the details to inquiring customers however if the customer still REFUSES to get its time for us as an industry to fire that customer. Sure it sucks to lose a sale and a customer but id rather build culture where everyone wins, not just one party. Im dure your employees and your family eont appreciate cut backs and reduced income due to customers that dont want to follow standards you have set for your business. Just my 2c

[marista]

I have seen quite a few good ideas here for those struggling with this issue. We will (depending on the part/job) install customer purchased parts - though we do explain to them that we don't charge more than the local retail price so they are really not saving $. Doing this, we sometimes make a decent profit on parts - sometimes not so much, but it usually alleviates the hassle.

 

Some here on the forum have suggested raising their labor rate when installing customer provided parts which I think it a great idea. Someone also suggested a bay rental fee for $35. I like that idea as well. That however is a moot point in the warmer weather months when we can do some of this stuff outside unless you need the lift and then it can be a lift rental fee.

 

The two biggest problems we have with the customer buying the parts is 1) it's not the solution to their problem and 2) it's the wrong part ex. vehicle has two options for brake rotors and they get the wrong ones. This ties up our guys and our bays. Now you are in limbo waiting on them to get the correct part and you have their car so now they're stuck for a ride to get back to the store or you have to wind up ordering it (which you could have just done in the first place!) and the car is still stuck on your lift/in your bay. Basically, if they want to us to install their parts, they are going to have to pay for it one way or another.

 

We have used the increased labor rate here lately. This works really well depending on what state your in I guess - instead of using the regular hourly rate - flat rate it compensating for the lost revenue on parts.

[mmotley]

After the first of the year, I made a decision that I would not allow customer supplied parts unless we were making more than what we would make getting the parts ourselves.

 

Example: A customer bought a part online for his car. It cost him $150. He asked how much I would charge to install it. I said $275. He asked how much it would be if I supplied the part. I told him $300 total. So it was going to be more expensive for him to get his own part and I was actually going to make more if he supplied it. On top of that, he was not going to get any sort of warranty.

 

I have come to dread these customers, but they exist nonetheless. I figure if they are going to get their own parts anyway, I might as well make a killing installing them. I usually either double the labor or look at how much I was going to make off parts and then double that.

[xrac]

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[mspecperformance]

I have seen quite a few good ideas here for those struggling with this issue. We will (depending on the part/job) install customer purchased parts - though we do explain to them that we don't charge more than the local retail price so they are really not saving $. Doing this, we sometimes make a decent profit on parts - sometimes not so much, but it usually alleviates the hassle.

 

Some here on the forum have suggested raising their labor rate when installing customer provided parts which I think it a great idea. Someone also suggested a bay rental fee for $35. I like that idea as well. That however is a moot point in the warmer weather months when we can do some of this stuff outside unless you need the lift and then it can be a lift rental fee.

 

The two biggest problems we have with the customer buying the parts is 1) it's not the solution to their problem and 2) it's the wrong part ex. vehicle has two options for brake rotors and they get the wrong ones. This ties up our guys and our bays. Now you are in limbo waiting on them to get the correct part and you have their car so now they're stuck for a ride to get back to the store or you have to wind up ordering it (which you could have just done in the first place!) and the car is still stuck on your lift/in your bay. Basically, if they want to us to install their parts, they are going to have to pay for it one way or another.

 

We have used the increased labor rate here lately. This works really well depending on what state your in I guess - instead of using the regular hourly rate - flat rate it compensating for the lost revenue on parts.

 

A bay rental fee as in you are allowing customers to use your bay by themselves? I would highly suggest against this as it would be a HUGE liability problem for you. If you are not making more than $35/hour with one of your bays then there is a serious business problem.

 

 

After the first of the year, I made a decision that I would not allow customer supplied parts unless we were making more than what we would make getting the parts ourselves.

 

Example: A customer bought a part online for his car. It cost him $150. He asked how much I would charge to install it. I said $275. He asked how much it would be if I supplied the part. I told him $300 total. So it was going to be more expensive for him to get his own part and I was actually going to make more if he supplied it. On top of that, he was not going to get any sort of warranty.

 

I have come to dread these customers, but they exist nonetheless. I figure if they are going to get their own parts anyway, I might as well make a killing installing them. I usually either double the labor or look at how much I was going to make off parts and then double that.

 

 

 

It's a judgement call if you want to allow customers to bring their own parts. From a biz stand point you are losing out 1/2 of your potential total sale. Only by doubling your labor rate would you be in line with making the correct margins. That still doesn't address the matter of wrong parts, time, liability.

 

We just don't do it period unless we are super slow and then I charge accordingly. The people who goes elsewhere because of this will have the bottom of the barrel working on their cars and their results will probably be unsatisfactory. Eventually they may return after they take their lumps.

Part of the reason why we don't allow customers to provide their own parts. Also I am trying to build a customer database of preferred clients. Customers that will do business our way. Once you start a customer on the wrong foot, they will always expect to be treated that way. It would be difficult to recover after you allow them to bring their own parts.

[marista]

 

 

A bay rental fee as in you are allowing customers to use your bay by themselves? I would highly suggest against this as it would be a HUGE liability problem for you. If you are not making more than $35/hour with one of your bays then there is a serious business problem.

 

 

No, not allowing customer to use bays. This was another member's wording - just using it as an example of some of the methods suggested and that's in addition to labor not in place of it.

 

 

 

 

Part of the reason why we don't allow customers to provide their own parts. Also I am trying to build a customer database of preferred clients. Customers that will do business our way. Once you start a customer on the wrong foot, they will always expect to be treated that way. It would be difficult to recover after you allow them to bring their own parts.

We also have come to the conclusion that we would like to be more selective with our customers. Basically, weed out those that are a constant issue with regard to pricing or respecting your advice, question everything we do, or have the 'your the last one that touched it, you own it" mentality. However, sometimes circumstances force you to compromise. If none of your "preferred" customers are having issues, you have to bring money in the door. Not thrilled with the idea but as long as we are not losing money and make up the difference lost on the part, I'm okay with that. - No warranty on part and if it fails you pay for part and our time again. That usually sways them to allow us to get the part.

And playing Devil's advocate: Some customers who want custom/specialty items installed, exhaust, suspension, etc. If we are installing for them, what's the difference if we install a starter purchased by customer.

[cdhowell]

I think the fee was in regards to my posting in another thread. I do a lot of aftermarket work. Lift kits, Lowering kits, Hitches, Nerf bars, Tonneau covers, Air bags, Winches, roll cages, Performance parts.......... You name it. As well as auto repair and service.

 

The part margins are not really there with the internet competition in aftermarket parts. My pricing on aftermarket stuff is Slightly higher than what they will find on line. Yet they want to supply their own. I will agree to do it with no warranty and a down time agreement. But If the parts they provided are wrong, don't fit correctly or halt progress from missing components. They will be charged hourly for the down time in that bay until "They" get it resolved.

 

Now they have a choice to make. Take a chance on some Additional Charges, or pay a little more up front and let me do my job.

[mmotley]

 

It's a judgement call if you want to allow customers to bring their own parts. From a biz stand point you are losing out 1/2 of your potential total sale. Only by doubling your labor rate would you be in line with making the correct margins. That still doesn't address the matter of wrong parts, time, liability.

 

Agreed. I should have specified that my example was of a customer who bought their own key/remote online. All I was having to do was cut the key and attempt to program There was no risk for occupying a stall or anything like that. I told the customer I would take payment upfront and if it didn't program after 2 tries, he was on the hook regardless. He ended up returning the key/remote and just buying mine.

 

Anything like an oxygen sensor, spark plugs, valve cover gaskets, etc, no way. I used to struggle with this. I didn't want to let the job walk out but I hated the way those customers would smile like they had figured out some way to take advantage of me and save money by getting the parts online. I was speaking with a mentor of mine and he told me the solution was easy. 'Just say NO! How hard is that to understand?' Since then, it haven't had to deal with any customer supplied parts. I've let a few walk out the door though, and it allowed me to get back to work on better customer's cars.

[mspecperformance]

No, not allowing customer to use bays. This was another member's wording - just using it as an example of some of the methods suggested and that's in addition to labor not in place of it.

 

 

We also have come to the conclusion that we would like to be more selective with our customers. Basically, weed out those that are a constant issue with regard to pricing or respecting your advice, question everything we do, or have the 'your the last one that touched it, you own it" mentality. However, sometimes circumstances force you to compromise. If none of your "preferred" customers are having issues, you have to bring money in the door. Not thrilled with the idea but as long as we are not losing money and make up the difference lost on the part, I'm okay with that. - No warranty on part and if it fails you pay for part and our time again. That usually sways them to allow us to get the part.

And playing Devil's advocate: Some customers who want custom/specialty items installed, exhaust, suspension, etc. If we are installing for them, what's the difference if we install a starter purchased by customer.

I would argue that if you want to build the shop of your dreams, the business of your dreams even then you can never compromise your ethics. I understand the need to bring money to the door and there can be lean times. At the end of the day it is your business and you should manage it the way you see fit. Being that I've been in the position of "well it's still money and it's an easy enough job let me just go and let this customer off the hook from my policies" and it's a slippery slope. Everything about customer relations comes down to managing expectations. Under estimate over deliver. If you allow them to do it once they will expect it's ok to do it again. Besides that what if they refer more customers to you. They will expect the same treatment. What if those customers aren't as amiable as the one that referred them. What if you charge the referred customer for parts and told him your policy was such and then he has a convo with your original customer, someone is going to feel slighted and your customer satisfaction scores will go way down.

 

Point being every day that goes by customers have more and more power in their hands. You might not feel it as much in your market now but it is the future. My whole philosophy now is to keep my customers happy at whatever reasonable cost. I can not possibly do that if I flip flop on my policies.

[Silver Star]

All good discussion, but i would like to try and redirect this thread. My idea was we share scripts on how to respond to people that bring this up to us. We can all agree that this is not good practice but we all will make adjustments as we see fit. Lucky for us we take the big risks of being in business so we get to make that choice. I think we can all benifit from a collection of how to approach this with the customer but also formulate ways we want to i struct our staff as well. I know its a nice waste of my time when i have a staff member come to me with this issue and its all the same story and its always consuming my time comparing what customer has found to what we can do and discuss the differences and why we wont do it, blah blah blah. The issue i see is it dosent happen enough so the pencil is never sharp at that moment. So again having this info stored in a sticky that we can pull up when the situation arises and help is sharpen the pencil real quick will save is all alot of time! Agreed?

[bstewart]

I would also bring up the fact that the parts people buy online are inferior quality 90% of the time, unless they are getting the same brand/part number as you would sell.

 

Not to mention that there is lots of counterfeit parts circulating around, which are much easier to sell online then through a legitimate retailer.

And don't think that just because it's priced high, it's not a counterfeit. Counterfeiters have been increasing their prices to match real prices, taking out the "seems too good to be true" factor out of it.

Counterfeiters have also been improving the visual quality of their parts so much so that life long techs have been fooled (aka less white box, more real looking logos and better outer "shells" of parts, still putting the same crap inside where you can't see it)

 

I would say that the inferior part/risk of counterfeit parts angle would be an easy sell to a lot of safety conscious customers. The ones who don't understand this, should go to a shop that doesn't care.

http://www.rmi.org.za/wp-content/uploads/2011/09/CounterfeitAutoParts.pdf

[UsedTireShop]

As automotive industry professionals we must stick together and simply say "NO".

You can not bring meat to McDonald's or beer to T.G.I.F.'s.

Allowing just 1 customer to bring his own parts in will only lead to more people bringing in their owns parts from word of mouth.

 

Do you think your customer would go to work on Monday for 1/2 his pay?

 

I simply state to the customer that our policy is to warranty the complete job. We only use the best parts with professional craftsmanship for the best possible repair. The word "Policy" is key here, the customer recognizes this word.

 

To be honest I think we seem desperate and hack if we allow people to bring their own parts.

[ATSAutomotive]

No matter what you do there is something called Expressed and Implied warranties. Simply writing no warranty on the invoice, will NOT hold up in court. You will be help responsible as the PROFESSIONAL!

 

http://consumer.findlaw.com/consumer-transactions/what-are-express-and-implied-warranties.html

 

This subject has been beat to death and every shop needs to understand the implications of installing customer supplied parts. You are risking your business, your employees livelihood and your own livelihood EVERYDAY that you install a customer supplied part. NO NO NO NO NO

 

http://www.extremewrench.com/resources/notice.pdf

 

http://www.searchautoparts.com/cust-supplied-parts-liability-again

 

http://www.asaohio.org/news/to-install-or-not-to-install%E2%80%A6that-is-the-question.html

 

http://www.northwoodsautotechs.com/documents/files/CUSTOMER%20PARTS%20NWAT.pdf

 

 

Mr or Mrs Customer, we do not provide the service of allowing customer supplied parts. As a professional in the automotive industry we are held liable for the service we provide you including parts. We establish relationships with our vendors in order to provide you with high quality genuine replacement parts. We also provide a warranty on our service to provide you with peace of mind. We simply won't risk the safety of our customers or the livelihood of our employees.

 

Simple, quick and explains LEGALLY why we can't install their parts. You would be surprised by how many people have thanked me for explaining why we can't install their part.

 

Now for shops that are dishonest or choose to install inferior parts, that's a whole different discussion.

[Mario]

I wouldn't use the word liable. Don't ever make yourself seem at risk. If that customer has a "safety issue" later down the road they may be more likely to looking at legal options.

Edited January 19, 2015 by Mario

[flacvabeach]

I'm with Used Tire Shop. Just say no. I want to guarantee the WHOLE job or not do it at all.

[ATSAutomotive]

I wouldn't use the word liable. Don't ever make yourself seem at risk. If that customer has a "safety issue" later down the road they may be more likely to looking at legal options.

 

I wouldn't disagree, I quickly wrote that out as the OP was looking for specific wording, etc. Going back over it, I can think of a much better way to write it but everyone needs to take it and make it their own.

[PACMAN]

We refuse to install customer supplied parts, end of story.

[Wes]

We refuse to install customer supplied parts related to engine, drivetrain, suspension and brakes. We do not do internal transmission service. If we agree to install a customer supplied part we charge $125.00 per hour and that is limited to extreme circumstances. I would recommend speaking to an attorney so you can find a solution that will protect you should a situation arise. In all, let the customer go down the road to another shop because it is just not worth the risk of a tarnished reputation, legal fees and potential judgments or criminal charges that you may face. Unfortunately, It is the world we live in.

[xrac]

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[Mario]

Yes. A lifetime warranty on a $59 heater core from the zone is useless when it's a $700 job in labor to replace it again.

[xrac]

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[ajnealey]

Great topic! Great read!

 

I feel I have the proper info to handle these questions without coming off as a curmudgeon

[mspecperformance]

Remember to always sell the customer on your people and your shop. All the benefits a customer would receive servicing their car with you. Best techs in town, best warranty, you stand behind all your work, peace of mind repairs done right the first time, shuttle service, complimentary loaner service. Whatever sets you apart let them know about it to reaffirm their decision in walking/calling into your place. Try to do this prior to shutting down their "I got my own parts" question. This helps psychologically because if they know who you are and like you they are more likely to say (internal monologue), "hmmm.... well I really like these guys, seems like the right place to service my car. Ok lets give it a shot" opposed to, "ehhhhhh maybe the shop down the block will let me bring my own parts."

 

If you have a good enough presentation then the good customers you want will understand and work with you. The price shoppers whom you don't want anyway won't even consider the VALUE your services provide.