Should a body shop charge markup on parts they buy for repairs

[ptownTSI]

So I'm just wondering what you all think about this topic. I run into it all the time with my work.

Should body shops make a profit off the parts they buy to put on a vehicle they are repairing.

I say no, and the reason is they are not incurring any storage, shelving, maintenance or any sort of fee's for the item that you actually NEED to have a markup for. A shop like Napa charges a mark up on parts because they sit of a shelf, in a store, that has expenses directly related to the sale of that item. a Body shop has no expenses directly related to a part they get for a customer car and therefore should not charge any sort of markup.

[blunttech]

its a business. there are administrative costs, bookwork, filing taxes etc etc. yes, they are in business to make money and they should mark shit up.

[Justin B]

I understand your point, but no mark up at all they wont make any money on bothering to order the parts, get them, and whatever else. Perhaps they may mark it up slightly less than if someone came in and for some reason just wanted a fender to do themselves (not that the shop would do that) but they do get the parts at their cost, and are essentially selling them anyway even if its included in the total price. By your reasoning you should be able to go to any store and special order something they dont regularly stock and get it for no mark up? Exactly what Blunt said, it still makes the rest of the business money. Who knows, if they didn't mark parts up, they could just sneak it in in labor charges, but they would be ridiculously high and nobody would want to go there.

[golde30]

i think it depends on the shop, and who they are doing the work for. if the work is on an insurance companys dime, then why the hell wouldnt u charge full retail value no matter how cheap yer getting it for.

if some1 were to come in and needs repairs done and they are paying out of their pocket, then i can see some shops charging cost for parts. they still make a good amount on labor and paint supply charges.

[LINUS]

Blunt's answer was pretty on target. I can see charging roughly ~15% as it takes them time & resources to obtain parts, but the costs need to be reasonable.

Paint is another key factor in cost, what brand you go with will vary your bottom line wildly - so if it matters so much to you, you should also be able to know what brand/type paint will be used.

Let the labor rate dictate what level of worksmanship you get - if a shop can charge $150 / hr and their work backs it up, more power to them.

There's so many variables in body repair costs that you almost need to be in the industy to understand the bill it seems.

[ptownTSI]

1st off i work for an insurance company. We won't pay shops more than about 80/hr for paint work, and no more than 40-80/hr for labor work. All these places that charge 100, 120 per hour for labor are crazy because they are only ripping off individuals.

Also, i'm not talking a little "mark up". on a hood that I can find online for $200, a body shop should not be charging $385 for.

that is a HUGE markup. I just took off $700 off a repair bill that was submitted to me because a shop nearly doubled the price of some parts they were buying... I'm definitely reasonable, I can understand 10-15% markup.

sure you get a hood for $200 and want to charge $220 for it. FINE, but don't submit a bill to my desk for $385 and expect me to pay it.

[ptownTSI]

a lot of shops that would charge an individual 120hr mechanical, and $100/hr body, and 80/hr paint, would if they were dealing with an insurance company get that reduced 30-40% through appraisers and adjusters. we just say 'nuh uh' not gonna fly.

[der affe]

CAN OF WORMS IS NOW OPEN.
i am a bodyman, is it fair that you try to screw us out of labor time by making LARGE repairs (read ,major collisions) with just about every panel overlaping time, making us fix body panels that should be replaced for a proper repair, just to cut corners for the company, retape trim, cladding etc insted of buying new and expect us to do the labor for free, unless we fight for the time, fair that when you come out to do an initial est. on a car you undercut the repair times, hopeing we will do it for the cut labor times, then when we call for a reinspect you drag your feet for days, there by tying up the customers car longer in the shop, sometimes making them run out of rental car time, so they pay out of there own pocket, fair that you force us to use aftermarket sheetmetal and parts on 1-2 year old cars insted of factory parts.
body shops pay below wholesale $ for parts, and are supposed to charge the insurance co. jobber prices....some what less than retail at a percentage that is set by the insurance company.
the bodyshop is your advocate against the insurance company, most people don't realize that. we (read a good bodyshop) try to get the best repair for the most money we can get from the insurance company, so we can pay good body techs and painters to do a quality job. less money means lower pay, less qualified techs, lower quailty work for the customer. bodyshops get alot of bad rap for bad repairs, but sometimes when the insurance company has you hands tied with low quality parts, you can only do so much.
there it is in several run-on sentences in a nut shell:hitler:

[atomic]

It is no different than any other business out there that tries to make a profit. That's why they call it capitalism. If all business' were out there to sell you goods that they do not make money on there would be no business' period nor would you be getting your car fixed at a body shop because they would probably not exist. Nor would you have a car( that you could at least use) becuase the gas retailers and wholesalers would not be around to sell you the gas to drive it with so on and so on.......

[LINUS]

In my 1st post I threw out $150/hr as a example, I don't know anything about current labor rates.

Judging by seeing def affe's post though, it looks like they have to run up the rates for parts in order to 'cook the books' on the smaller parts you as an insurer aren't too thrilled in paying for, despite something being a part you would want fixed if it was your own personal car.

Now that you disclose you are an insurance claim guy, I don't have any pity for you getting jacked on parts, your industry jacks all us customers when you total out cars.

Tell me how wrong I am by telling me what payout is for say - an '89 M3 with 120K on the odometer, decent maint. records, no prior collision on record. Be honest, we all know we have to hire a lawyer to get anywhere near full replacement cost, and then we have to pay the lawyer.

I bet the car I mention would sell in the open market for at least $15K - you want to tell me what payout is?

[1991 318is]

It's pretty much irrelevant because it is an industry practice and entrenched in the business model. Body work is young man's occupation and generally there are no benefits. A good body man will bill out 80 hours a week while working 40. Look around next time you're in one. You will rarely find a body man in his 40's. Body work is wrenching and craft. Painting is craft. I've worked in shops and for insurance companies. The irony is that they pay the same for mediocrity as they do for the best.

[der affe]

i'm usually at 90-100 a week ;)

[gazellebeigem3]

For serious, how do you expect any business to keep its doors open without having a decent profit margin? Getting wholesale pricing is just part of the package.

[hugh jass]

as a general rule, i rate insurance companies just slightly above child rapists and genocidal dictators. insurance companies are out to screw EVERYBODY in the equation - the insured as well as the shop doing the repairs. i have no doubt that shops have to fight tooth and nail to get a fair price from insurers, just like consumers have to fight to get a fair price for a totaled vehicles, etc.

[StereoInstaller1]

as a general rule, i rate insurance companies just slightly above child rapists and genocidal dictators.

/ FUCKING thread