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The Ranting Room Got a gripe about life? Want to sound off about the unfairness of the universe? Does something just REALLY piss you off? Well, come on in and talk about it!

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Unread 03-28-2007, 06:46 PM   #11
irfgt
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Since I have been in the Automotive Service Business for 32 years I feel qualified to answer this question. Any Business needs a profit margin to break even and then make a profit. The name of the game is to make the most in the least amount of time that the market will bear. A parts mark up is added to a labor charge based on a Flat rate, straight time basis ,or a contract price. A well run Business knows how much per hour profit is necessary to survive. If you cut out the parts then the labor will need to be raised to overcome the loss. As far as a Customer bringing their own parts, there is a huge warranty problem. I have actually used a Customers parts and had an immediate failure of the part at installation. The Customer then claims that it was not installed properly and his part is brand new and couldn't possibly be bad. If the part is clearly defective the Customer still balks at having to pay double labor to replace it again. Now to satisfy the Customer, you have to wait for the customer to take the part back to who knows where while you do the labor for free while the Service Bay is tied up with his car. All this inconvenience and profit loss just so the Customer can save some money on their car. If The Shop installs a part supplied by the Shop, there is no question as to who pays for the parts and labor. It is like buying an insurance policy on the repair. Put yourself in the Shop Owners position and you will understand. No Business is there to see how much money they can save the Customer. They are only interested in gaining repeat customers and making a good living by doing just that. If they don't make a profit, they will not be there long, nor will any Business.
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Unread 03-28-2007, 09:24 PM   #12
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Hi guys, we're in a much better frame of mind today! I was just venting on my first post. Please allow me to clarify. I fully understand the economics of business. But I also have insight when I speak of certain unscrupulous individuals that I've had the displeasure of doing business with. I have no problem paying a reasonable and fair markup for any item. But just what constitutes reasonable and fair? From time to time I have to buy certain items from a dealership due to needing a "dealer only" item. At one point I had to have a Delco electric solonoid. I was only able to locate it at a certain dealer. I was quoted $52.XX and told they had only one in stock. Due to a commitment I had my wife stop by to pick it up. She was told they did NOT have it, but she could pay for it at the dealer and drive down to their "warehouse" and pick it up. She went to this "warehouse" (read parts house) to pick up the part and casually asked if she could have purchased the part from them and was told, yes, certainly. My wife asked how much it would cost and was given an out the door price of $23.XX.
I know I'm a little old school, but when I started in the automotive business back in the 70's, 15 to 25 percent was a usual and customary mark up. Later, in the 80's I was introduced to the "sliding scale" mark up. This is accomplished by taking an item cost factor of .01 to $9.99 and marking it up 400%. Items costing $10.00 to $19.99 would be marked up 200%, etc., etc. To my understanding this practice is still ongoing in certain dealers today. This is why there is such a broad dislike of dealerships among so many consumers. The dealers generally have the best trained technicians in the field and many of us don't mind paying a premium labor charge for the expertise, but the outrageous price of "genuine" dealer parts drives many consumers away. As I stated before, I've sold dealer parts to consumers, only to have the dept. replace the part with an obviously inferior aftermarket item yet still charge for the premium part.
Sorry to run on so long, I'm not disputing a business's right to make a profit, I just don't believe the unsuspecting consumers should be taken advantage of. So shop around folks, use the internet, it's a wonderful tool. I understand many of you want to keep your Vette all GM, and if I was doing a correct resto, or if my Vette was all original, I would too. To some of you, money is no object, and you don't need to shop around. And the dealers absolutely love you!
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Unread 03-28-2007, 10:00 PM   #13
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All of the above for dealers and markups. I own 2 harleys and it is the same across the board with them as well. Most dealers won't install parts that you do not purchase from them, wether it is GM or H-D or whatever.
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Unread 04-12-2007, 05:40 PM   #14
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Quote:
Originally Posted by irfgt
Since I have been in the Automotive Service Business for 32 years I feel qualified to answer this question. Any Business needs a profit margin to break even and then make a profit. The name of the game is to make the most in the least amount of time that the market will bear. A parts mark up is added to a labor charge based on a Flat rate, straight time basis ,or a contract price. A well run Business knows how much per hour profit is necessary to survive. If you cut out the parts then the labor will need to be raised to overcome the loss. As far as a Customer bringing their own parts, there is a huge warranty problem. I have actually used a Customers parts and had an immediate failure of the part at installation. The Customer then claims that it was not installed properly and his part is brand new and couldn't possibly be bad. If the part is clearly defective the Customer still balks at having to pay double labor to replace it again. Now to satisfy the Customer, you have to wait for the customer to take the part back to who knows where while you do the labor for free while the Service Bay is tied up with his car. All this inconvenience and profit loss just so the Customer can save some money on their car. If The Shop installs a part supplied by the Shop, there is no question as to who pays for the parts and labor. It is like buying an insurance policy on the repair. Put yourself in the Shop Owners position and you will understand. No Business is there to see how much money they can save the Customer. They are only interested in gaining repeat customers and making a good living by doing just that. If they don't make a profit, they will not be there long, nor will any Business.
Good post... most people have no idea of what it takes to keep a shops doors open, and parts markup is a part of the business equation. As a consumer, you might not like it, but that's how it is...

When somebody comes in looking for me to install their parts, I politely inform them that when you buy your own parts, this assumes you have the facilities, tools and knowledge to also do your own labor. If it's their own catback system, certainly I'll install it, but the labor charged will reflect that, as I have overhead to consider. Catback exhausts are about the only customer supplied part I will install.

I'm both a Corvette enthusiast and a businessman. If I did the work "for the love of it", I wouldn't be in business to serve the public, as I would have no money to keep going.

I won't even go into the "would you sponsor my car?" thing....
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