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Parts Suppliers Selling Practice:
Hello Everyone:
I’m a newbie to the forum and find it a great site with information and forms for the shop owner. I have been in the auto repair business almost 40 years and have enjoyed most of those years. As I’m sure most of you have experienced. My issue is, and I’d like to get feedback on this, is that most parts that we buy from our suppliers have a discount applied to it, and we need to sell those parts at a profit margin based on OUR price matrix. The SUGGESTED suppliers pricing is exactly that, SUGGESTED. Now, this doesn’t happen often where customers question my pricing, but I’ve had a handful of times. The suppliers are selling the same part that we are buying for less than what their suggested price would be. Example, you quote out a brake job (for easy math) our cost on a set of brake pads is $40 and suppliers suggested price for us is $70. Same customer now begins to search to see what brake pads cost (curiosity of new customer) He calls or goes to the same supplier and that suppliers sells the exact same set of brake pads over the counter for $55. Guess what just happened, that person will now begin to question you and your service. We are all in business to make money, that’s what keeps us open for business and yes there are those out there that gouge, but for most of us we all run a really honest ship. So now my issue and question is two fold. Why are the suppliers selling parts over the counter at a discounted rate and if they are in the business of making money also, why would they not sell the same part over the counter at the same suggested price that shows on our suppliers invoices. We, as an automotive repair industry do more business with parts suppliers than their walk in customers. We as an industry buy much more than walk in customers and I personally feel that suppliers should have more of a partner with us. I’m not sure what can be done but i know I have spent many years trying to get things changed at the shop level but with no luck. Just a suggestion but maybe we need to get together as an industry and have parts co-op hub that maybe 4 to 10 local shops can be part of. They can have the buying power to get a better discount from manufactures and potentially make a better GP on the parts we sell. I know there would be cost involved (i haven’t done the math yet) but we need to see if the costs can out weigh the reputation. Again, this does not happen often, maybe 6 times in my 40 years but it still bothers me.
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3 Replies
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Oliver, we moved locations about ten years ago, and one thing we noticed is that we get less of those types of questions from customers in our new location. I completely understand your point. Having said that, I believe that the best approach to this issue is to try to get better customers to replace the ones that would do as you described. When I hire a company to do some work on my shop or home, I do not get online after the service and attempt to price check the materials I was billed for. Most people don’t do that. Most people are looking at the big picture of the whole service, from pricing to convenience to results. Those are the customers we try to get to our shop. ????
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Tom, I completely agree and we do not have those types of customer. But this was a case of a new customer. I think it was more of a venting session for me. But like I said, it still bothers me.
Thanks for the reply.
Oliver
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You’ll always have the price shoppers. Those are not the customers that are going to give you good reviews and be in for the long term.
We have noticed more and more lately people saying stuff to us about they saw the part online for this or that price. But if you want the expertise, warranty and peace of mind you have to buy the parts from us.
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