How much markup is too much? - Page 2 - Vintage Mustang Forums
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post #16 of 47 (permalink) Old 09-07-2019, 08:19 PM
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Did the cost of the cam include lifters that the shop installed?

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post #17 of 47 (permalink) Old 09-07-2019, 08:44 PM
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Brick and mortar
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post #18 of 47 (permalink) Old 09-07-2019, 08:45 PM
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post #19 of 47 (permalink) Old 09-07-2019, 08:51 PM
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https://www.amazon.com/MOOG-Chassis-.../dp/B000C560O8 $53.68 all for the same part. I was going to order from Rockauto but it's cheaper from Amazon with free shipping! Sweet!

It's a tough gig for brick and mortar these days!

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post #20 of 47 (permalink) Old 09-07-2019, 09:10 PM
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Actually, the markup on the cam is 55% and the intake is a little shy of 52%. STILL a tad excessive over the "norm" which would be 40-50% of wholesale cost, not what the public can buy it for.

On the other side of the coin, had you purchased and supplied the parts they may have declined to DO the work or charged a premium labor rate.

Now, some folks who have never owned or run a business that deals with sales of both products and services may not understand markups, margins, overhead and other such terms but let me just say this.... if you can't make about the same dollar amount in GROSS profit from parts AND labor then you need to re-think doing the job. When you have to pay salaries, benefits, workers comp, unemployment insurance, 7.65% of the employees social security contribution, property and casualty insurance, garagekeepers liability insurance, utilities, capital improvements, repairs, subscription services, tool costs, refuse, recycling, environmental, government fees, permits and licenses, it's not like you can charge fifty bucks an hour and call it "good".
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post #21 of 47 (permalink) Old 09-07-2019, 09:16 PM
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So,, Say for example fast food. Pick most any item from the menu. Cheaper to make your self.Right your paying for the convenience
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post #22 of 47 (permalink) Old 09-08-2019, 07:37 PM
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post #23 of 47 (permalink) Old 09-08-2019, 09:22 PM
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Brick and mortar
Advance isn't a good example of brick and mortar, that's them ripping off the unfortunates after they drove all the other parts stores out of business by selling at cost, then tripling their prices. Now you have Advance, Orelly and Autozone, all selling for at least double what the parts should cost.

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post #24 of 47 (permalink) Old 09-08-2019, 10:11 PM
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Actually, the markup on the cam is 55% and the intake is a little shy of 52%. STILL a tad excessive over the "norm" which would be 40-50% of wholesale cost, not what the public can buy it for.
Many of the custom or restoration shops are charging 20-50% over what they buy it for regardless of if they get dealer pricing or not. That could get spendy for parts they dont have wholesale deals with.

Just to pile on to the employee costs when I was running companies wed figure at 1/3 to half as much as the hourly rate for all we had to pay and markup. It can be a shock when the employee sees you bill $50/hr for what they get paid $30/hr with benefits. If they employees balked I tell them to add up all those other costs, tools, benefits, self employment tax, liability and workers comp and get a real business going then see how much of that $50 is left.
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post #25 of 47 (permalink) Old 09-09-2019, 02:37 AM
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Most "real" businesses would buy the parts at wholesale from their distributor and mark them up to the suggested retail. I have a friend who owns an automotive machine shop and from what Ive seen, most of us would be shocked at how cheap engine components can be purchased from a wholesale distributor when compared to suggested retail.

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post #26 of 47 (permalink) Old 09-09-2019, 12:31 PM
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Many businesses particularly narrow markets like restoration dont make the minimum orders for mass produced parts at wholesale. Raw engine components are pretty easy but mass market performance parts not so much. Tires and wheels are another. Even then Jegs and Summit will have them beat in quantity with many times the retail not being too much more than wholesale for the small shops.

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post #27 of 47 (permalink) Old 09-09-2019, 01:04 PM
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I do electrical work on the side. The price I charge is what the customer would pay at Lowes, or sometimes cheaper if I got a real good deal. I knew a popular glass shop that told me they charge exactly twice what the glass cost them, in case they broke the first one getting it in.
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post #28 of 47 (permalink) Old 09-09-2019, 01:26 PM
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My usual response to people who complain about The prices for parts that are charged by repair shops
is to buy the part yourself , diagnosis , and install it yourself . The average person doesn't realize what
scan tool updates or new tools cost .
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post #29 of 47 (permalink) Old 09-09-2019, 01:44 PM
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Originally Posted by Woodchuck View Post
Actually, the markup on the cam is 55% and the intake is a little shy of 52%. STILL a tad excessive over the "norm" which would be 40-50% of wholesale cost, not what the public can buy it for.

On the other side of the coin, had you purchased and supplied the parts they may have declined to DO the work or charged a premium labor rate.

Now, some folks who have never owned or run a business that deals with sales of both products and services may not understand markups, margins, overhead and other such terms but let me just say this.... if you can't make about the same dollar amount in GROSS profit from parts AND labor then you need to re-think doing the job. When you have to pay salaries, benefits, workers comp, unemployment insurance, 7.65% of the employees social security contribution, property and casualty insurance, garagekeepers liability insurance, utilities, capital improvements, repairs, subscription services, tool costs, refuse, recycling, environmental, government fees, permits and licenses, it's not like you can charge fifty bucks an hour and call it "good".
I've run my own business, worked for a really big corporation and worked for government. Unless you've run your own business you have no idea what it costs to actually keep the doors open. @Woodchuck 's list is only the beginning. Don't forget the cost of supplies (pens, pencils, paper, etc.), bank fees, phone, etc can be overwhelming.
But I also agree, the OP should have had an understanding/agreement/contract with the shop regarding their mark-up. I also agree that usually the customer pays the same price it would have cost him at the mechanic's supplier and the mechanic pays a lower "wholesale" cost for the part.
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post #30 of 47 (permalink) Old 09-09-2019, 03:03 PM
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A good example of why to get a quote before authorizing any work.
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