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

[FredK]

They do this all the time in auto repair as well. A control arm that costs $70 is marked up to $129. That's the way the cookie crumbles, for better or for worse. Sure you can bring in your own parts, but mechs don't like that.

[Charlie]

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.

Welcome to America, Vladmir.

-Charlie

[Jscotty]

As the customer, you expect the business to handle and resolve any problems that come up. Markup covers a the cost of doing business and the abilty of the business to provide good service. For instance if they order a fender that is rusted and then the supplier gives the body shop a hard time about it, all you really care is that you want your car fixed. You wouldn't accept the manager of the body shop giving you a story about how he needs another $388 because he got screwed over by his supplier.

In B2B transactions you do not get the same liberties that you get as a customer when it comes to buying materials and supplies. Like if you go to home depot and buy wood for a fence, you are going to pay a higher price than the contractor would through a wood supplier, HOWEVER, you can take that wood back to home depot and get your money back- no questions asked and for whatever reason. Like if its the wrong size or you meant to get pressure treated wood instead of regular yellow pine, Home Depot will gladly take it back and give you your money back.

But when it comes to a business to business transaction, the price of the wood is significantly cheaper but if the contractor makes the purchase and then the customer changes his mind or backs out of the deal, then the contractor is stuck with the wood. Maybe he could go back to the supplier and get his money back or exchange the materials for something else, however, its generally understood that there are no returns of merchandise when dealing wholesale. Usually in wholesale all sales are final. So then the contractor has to act as a retailer when selling the fence to you so that he can absorb the cost of storing the materials or having to haul it all back to the supplier.

[Fanzotti]

Ptown, Are you serious? Or are you just asking this question to stir things up. If your really an insurance adjuster your a brave man for admitting it. First off body guys work there asses off. I think every adjuster should be required to do bodywork for a year before they can sell insurance. I have a ton of friends that get rich off of selling insurance. I say we say no, not gonna do it, when you charge us to pay for insurance, but we can't do that cause you have the law that requires us to come to you. Yeah let's pay the body shop less so they can cut corners on our cars just so they can keep the lights on so you guys can get even bigger profits.

[ptownTSI]

i don't sell insurance i'm an adjuster. I have never "screwed" anyone and the only time we can really adjust prices down is when they are putting brand new parts on a 10 year old car, when very good used LKQ parts can be had for 20% of the price. then I will make the shop get the LKQ parts.

Labor times are standardized through mitchell and averaged pay is calculated for that area. If a shop is 40% (i'm pulling that number out of my head) or higher than others in there area then I will usually call them and try to work them down.

special area's have special prices, shops in alaska can usually charge more since there aren't many shops up there and we have to pay it.

I'm more frustrated from a personal standpoint. Insurance companies have millions of dollars so its not a big deal for them. when i say bring my E30 fenders in, I really don't want them billing me MORE than they bill an insurance company that has very deep pockets.

[ptownTSI]

Ptown, Are you serious? Or are you just asking this question to stir things up. If your really an insurance adjuster your a brave man for admitting it. First off body guys work there asses off. I think every adjuster should be required to do bodywork for a year before they can sell insurance. I have a ton of friends that get rich off of selling insurance. I say we say no, not gonna do it, when you charge us to pay for insurance, but we can't do that cause you have the law that requires us to come to you. Yeah let's pay the body shop less so they can cut corners on our cars just so they can keep the lights on so you guys can get even bigger profits.

I know the guys that DO the work, work their ASSES off. but for example, go look at this bodyshops page. http://gandcautobody.com/ they spend all their extra money they rip ins companies and individuals off with on basically building a castle, marble floors, hdtv flat screens, etc. They probably don't pay the bodymen anymore than normal.

I believe when I was there and got a tailgate on my jeep painted they wanted 2.5 hours of paint labor @ 95/hr, and $150 for paint. I had removed every single part from that panel so it was bare and all they needed to do was paint it. when i showed up to pick it up they were not honoring the $400 quoted price, they wanted an extra $50 too.

[Midnight Sun]

i don't sell insurance i'm an adjuster. I have never "screwed" anyone and the only time we can really adjust prices down is when they are putting brand new parts on a 10 year old car, when very good used LKQ parts can be had for 20% of the price. then I will make the shop get the LKQ parts

That is laughable in some aspects.

Like the time the guy in the white ford escape with blue lettering on the side made me buy a LKQ trunklid for a 2003 Nissan Sentra... Yep, all $536 of it.

Brand new they are only $360...

Or how about that used quarter panel he wanted us to buy for a Grand Am... Great deal there. 400 dollars for a quarter panel that required 5 hours clean up.

Brand new, 514.


Sorry.. I just get aggravated with some adjusters, they see LKQ and automatically think it is a great deal without ever calling to check the condition of it.

[thectrlguy]

It's a business... you don't stay in business, by not charging people.

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.

[trent]

I know the guys that DO the work, work their ASSES off. but for example, go look at this bodyshops page. http://gandcautobody.com/ they spend all their extra money they rip ins companies and individuals off with on basically building a castle, marble floors, hdtv flat screens, etc. They probably don't pay the bodymen anymore than normal.

I believe when I was there and got a tailgate on my jeep painted they wanted 2.5 hours of paint labor @ 95/hr, and $150 for paint. I had removed every single part from that panel so it was bare and all they needed to do was paint it. when i showed up to pick it up they were not honoring the $400 quoted price, they wanted an extra $50 too.

Who gives a fuck if they have a pimp shop or not? This even more so shows that you don't know how businesses work. A nice looking business can get more business. People don't goto dumps (for the most part). They obviously care about their customers and want the shop to look nice. Obviously from a business standpoint, if you think their prices are so high and outragous, the shop would not be in business. They must be doing something right.

[ptownTSI]

from a personal standpoint I can get much better work for less elsewhere.

and i think its wrong for a shop to charge so much markup on parts. I learned a new trick from a guy at a shop this week. They get two receipts from their supplier one (a lot less, that they put in their file), and another (a lot more they give to the insurance company).

a lot of you don't see the shit shops pull on a day to day basis you all think every shop is this glory child ( AND FOR THE MOST PART WE DON'T HAVE PROBLEMS).

those of you that are honest, and hard working you fix our customer cars well, and in turn we send more business to your shop. if it wasn't for adjusters and field adjusters who would be there to protect the consumer from shops putting on cheap aftermarket parts when an insurance company is paying for premium parts?

We had a shop last week caught putting on cheap cheap foreign stuff on a brand new Chevy Impala we were paying for brand new GM parts.

[ptownTSI]

I would like to post up a real estimate I got from a shop (all info about the company's and parties involved, blocked out) and someone can tell me where our (independent) appraiser may have been screwing someone, where they are making extra money, and where the shop is barely breaking even. On the internal side yes I am the adjuster but I don't write the appraisals.

If it turns out that maybe I or the appraiser was being unfair in some situation I'd like to know.

[thectrlguy]

Have you ever ran your own business? I am guessing not, based on your stance.

As a business owner myself, it's fair practice to mark up materials PERIOD! Businesses cost money, your simplified view of the matter is really quite ridiculous. Are you telling me a business owner can function in todays market on labor rates alone?

What about......
- Rent / Mortgage
- Utilities
- Permits
- Liability Insurance
- Wages
- Advertising
- Equipment
- Maintenance
- Taxes
- Office Consumables
- Equipment Depreciation
- etc, etc....

It's pretty easy to sit at your desk and judge everyone. I'll admit, some operations are scam artists, but every business sector will encounter those.

So get off your soapbox, seriously.

---- EDIT ------------------------------------------------

One more thing, I recently got into an accident with my truck. Nothing serious, went to the local insurance office to have my vehicle "adjusted". I then proceed to the body shop to arrange to have said work completed. As we are reviewing the vehicle, we noticed a scratch on the top of my hood, and the body guy said it wasn't covered by the insurance company.

I proceed to call them, and ask why this wasn't covered under the accident. They proceed to tell me "we feel it was existing damage", I said "existing damage?" and he said "thats our judgment, case closed". My truck is fucking immaculate, this prick has the nerve to tell me it's existing, like I was trying to pull the heist of the fucking century. FUCKING SPARE ME!

This little asshole was probably having a bad day, and figured I should pay for his misery. After telling this guy he's a waste of skin, and really lives up to the global reputation of insurance companies, I headed back to the body shop. I told the body shop guy what happened, and they fixed it FOR FREE!!

As far as I am concerned, insurance companies are trash... PERIOD, I would love to review the financial statements of any large insurance company. These assholes make a ton of money, yet our insurance rates aren't getting any cheaper... would you care to explain that?

[Jscotty]

I am completely against blatent insurance fraud, however, sometimes you have to finagle the settlement a bit to get things done. Many years ago my place of employment was burned in a fire. The adjuster determined that everything inside of the office space including the walls was damaged by the fire and then he cut the owner a check to completely gut the place out and rebuild it from scratch.

Then when the fire restoration people came, they determined that the walls and the floors could be cleaned up and restored without tearing them down.

So when I asked the guy why go through all of that trouble if the insurance is going to pay for everything? He stated that its because if the construction crew finds other problems, that can free up some of the money that might be needed for other things that the adjuster did see. So I think that sometimes a body shop has to build in some degree of safety in the estimate so that if the car appears to just have a smashed fender and door but then the body shop realizes that it also has a bent strut, a cracked floor pan and other minor things that the adjuster didn't see, then they can still satisfactorily repair the car without a financial burden.

And I am sure that they built in enough wiggle room to be able to fix that other scratch. It cuts back on some of their profits but they win you as a lifelong customer.

[thectrlguy]

They most likely had enough margin to cover it, but that's not the point. They made a repair, and should have been compensated accordingly.

You are correct, there attitude towards customer service has "won" my business.

And I am sure that they built in enough wiggle room to be able to fix that other scratch. It cuts back on some of their profits but they win you as a lifelong customer.

[Fanzotti]

P town, that castle of a body shop is a poor example. 95% of body shops are in shit buildings. Have you ever seen the castle or even sky scrapers that insurance companys build? They make that deluxe shop look like a storage shed. Alot of my friends are in the insurance game and they make bank. I even have at least two friends whose parents started major insurance companys, I see how they live and to tell you the truth, even though their friends of mine I'm not to worried about them having to pay a mark up on a fender, they'll be way more than just fine. I guaruntee Body shops are getting the raw end of the insurance deal and their passing their loss ontom you.

I'm sure you're a good guy but insurance companys blow monkey nuts.