Seems like there's no one answer for this. It's probably the situation where a deal is made on a case by case basis. Obviously, there's profit in the parts and in the labor. If the shop is not busy, and its guys are sitting around waiting for work, I would assume they'd be willing to install the customer's parts (with the proper disclaimer). If they're very busy, and it's a choice for them between a job where the customer supplies the parts, and a job where they'll also make profit on the parts --- well, you know.

Maybe if the customer is providing the parts, there can be a "corking fee" negotiated?

 

Everybody hates installing customer supplied parts, whether they admit it or not. Every independent's business model is based on a the sale of parts as well as service.
1. Why would they want to entertain your job with no parts margin as opposed to one to one with? Every technician hour sold has an intrinsic part's value. So, yes there is an immediate fiscal disadvantage to electing to afford you "X" service hours with no parts potential to another with actual parts revenue. That is simple.
2. Few independents can compete with the cut rate online suppliers and given their relatively small buying power can rarely even buy the parts for what the likes of Suncoast or Pelican are retailing them for. This is a HUGE burden, and cuts significantly into the independent's ability to operate profitably.
3. Used parts, incorrect parts and incomplete part collections is a whole other matter, with customers having little command of the "FULL" scope of their objective and providing literal piles of "crap"" for the independent to sort out. This is no fun at all and is a both an inconvenience and profit drain for the afflicted independent, who must scurry to unscrew up what his customer has put in motion.

There is no argument that the internet provides a ton of options for "discount" parts. If an independent can't minimally maintain a profit of 25%-30% on his parts, he will struggle and likely fail. If you are under the illusion that the independent can and will absorb the loss of profit on the part, you are dreaming. Any such businessman will simply spank you in the long run on labor to make up for the loss. So, you can persist under the illusion that you have saved money, but you are paying whether you realize it or not.

 

This makes no sense to me. If the indy shop can't source a part cheaper than it can be obtained, retail, at Suncoast or Pelican - they should just get it from Suncoast or Pelican. Why go through a "wholesale" channel, if the item costs more than low-margin retailers sell it for?

If an indy has a competitive, yet profitable, labor rate - they should be able to perform installation services for their clients with client-supplied hardware. Whether they do, or not, is simply a business decision. Obviously they can't warranty the hardware, but they should be able to stand behind their labor and the work being done properly.

IMHO, I think a lot of people are tired of the "old-model" where the mechanic charges Y for labor, but X for the part... and a cursory search finds that the itemized part-cost is 3x what it could be obtained for elsewhere, retail. Not to mention charging 8 hours' labor of "book time" for a job that takes them 3 or 4.

 

Answer:
1. The indy (unless he is in Suncoast's region) can not generally have a wholesale relationship. Territories are governed by the manufacturer. And even if he could, there would be the surcharge of shipping and the fact that there is still no margin. Suncoast enjoys the luxury of an average 45% margin on parts from the manufacturer. They typically sell for 15% over dealer cost. The fact that they ***** out their parts cripples the entire system. Furthermore, what customer would wait a week+ to ground ship a Mass Air Flow from CA? Hell, I can buy a steak cheaper at the market, but I wouldn't expect bring in in a tote to my favorite restaurant.

You are assuming that profitability is a function of labor rate and can be achieved without parts. That is a false assumption. Top "A" technician talent is not cheap, nor is a PIWIS, Laser Alignment Machine, specialty tools, or the facility cost. There is ridiculous overhead. If all an indy sold was labor, he would be out of business.

You are certainly entitled to that opinion. There are "A" techs, "B" techs, "C" techs and , well-Sears. Sears would like spend 20 hours on a 997tt clutch and render it a useless POS. The "C" tech, who just graduated from Tech school, might do it in 16 and you would come back with a vibration off idle, a check eng light and a whiring noise, the "B" guy might knock it out in 12 hours, but never have the experience to notice your IMS was about to blow apart. The "A" tech with 25+ experience would knock it out in 6, advise you of the IMS problem, save you a failure in the future. Which time on average do you think is fair to charge the world? Evidently, you think the "A" tech should get penalized for his excellence and experience? Interesting. I would recommend you take your car to Sears.

 

Maybe my mechanic is just being nice to me, but he has no problem installing parts that I bring to him. He is definately in the "A" category with over 30 years of Porsche only experience. I don't think you can generalize that all shops are so hung up on the parts profit margin.

 

It would appear that you're kinda passionate about this topic... How's about we bring it down a notch or two and try not to come across so abrasive, hmm?

 

Let's say you buy a performance kit from vendor X who is out of state. The kit is sold to you tax free. You find a shop to install and negotiate an install price. The other scenario would be letting the shop handle everything including the purchase of the kit and install. Now you would have to pay tax to the shop on the parts that the shop is reselling to you. In CA, that's an extra 10% or so. Do people think at the end of the day, both methods would yield the same cost to the customer and profit to the shop?

 

Interesting discussion. I probably have a very unique perspective on the topic of this thread. Most shops are not fond of Pelican because we sell parts at reasonable margins and reasonable prices. The shops that have the most difficulty with this are the ones that buy parts and then charge Porsche "list price" to their customers. For Genuine Porsche parts sourced directly from Porsche, I don't think there is a problem with this. But, for parts that are OEM or aftermarket, I believe this is a bit of an ethical issue. A lot of shops will buy the *cheapest* Chinese brand available and then charge their customer the Porsche list price on the part. That's just not right in my opinion (my suppliers who sell to shops have confirmed that this happens a lot of the time).

Even if you use OEM - take for example, a BOSCH OEM Mass Air Flow sensor (MAF). Some shops will buy one for $120 and install it and then feel okay charging the customer Porsche list price for the part ($400 or so), even though the BOSCH unit is not a Genuine Porsche part (it's probably the same exact part in a Porsche box, but that's not the point). I don't think it's right to do this either.

My comments apply only to *some* shops, not all shops obviously. I think the shops that charge $400 for a MAF when Pelican is selling the BOSCH ones for $150 are setting themselves up for customers to come in and bring their own parts. If Pelican is charging $150 for a MAF, and the shop wants to charge $180, then I would think that is close enough that the customer would be okay paying a premium to the shop, in order to get the shop warranty. But when the same part is charged at $400, then that's clearly a stretch in my opinion.

-Wayne

 

Amen.

 

agreed...there is a margin that most sustomers would be ok with when dealing with shop supplied parts on a job - the only issue I think are margins which are less than reasonable. The market has changed, the net has made buyers much more savvy in pricing their own jobs. The crappy economy does not help shops, lots of indy shops are struggling, faced with this they are trying to increae margins and reduce operatiing costs, however at the expense of the customer this strategy will only lead to people choosing to source their own parts and go to the shop that will install said parts - while all the others struggle to hang on meanwhile A level techs will go to those shops doing well because they can afford their labor rates...at the end of the day what do they care where the parts come from, that's the owner/managers issue to increase margins, stay profitable, and bloster operating costs...

 

Wayne,

I would argue, having been the Parts Manager at Porsche indy for 10+ years, and having principle wholesale sources such as Worldpac and SSF, with purchase volumes in excess of 10K per month, that I still could not achieve a cost basis of your advertised retail. Regardless of what I may have chosen to retail the part at.
If I log in to my Worldpac account and punch in a MAF as you have suggested, such as 996-606-123-00 my cost from Worldpac is $215.00 with a Porsche suggested list of $611.96.
The question is not what the retail is, but the fact that you are selling the part for EXACTLY my cost on the part!. This is what results in the calamity. No indy who's business model is (as it is historically) based on the sale of both parts and service can compete with the buying clout of a large, online, parts only wholesaler.

As for TTDude's comment about tax free. That is a fallacy. The fact that the masses elect not to disclose their out of state purchases is not to say they are not subject to the tax. They are simply evading it.

My assertion is that more and more shops are getting sick of the online wholesaler (because that is what you are doing-Selling at WHOLESALE-NOT SUGGESTED retail) are crippling the indy. I further assert that this is totally fine is you as the customer are able to capitalize on that savings and have the skill to install it yourself (DIY). I maintain that it is entirely presumptuous and frankly unfair to think that you are somehow entitled in the case of the Automotive aftermarket EXCLUSIVELY to impose these parts. There is NO OTHER industry that would tolerate it. You couldn't go to your local Verizon store with bits on online refuge, or a restaurant, or hire a plumber to install your Home Depot faucet. But somehow, the masses have all adopted the false premise that the indy auto repairer should just suck it up.

And who takes the hit when the "box-o-parts' is short a critical o-ring or seal or turns out to be the wrong fitment? Who gets to have the productivity of the job go in the toilet because Joe customer failed to identify the correct part or recognize the "FULL" scope of the project? It is these realities that the consumer fails to take in to account. And it is this reality that the indy must contend with when forced to acquiesce to customer supplied parts. Just how long is the indy obliged to loose the productivity of a lift while the customer sorts out a clutch return with Pelican?

I am not taking about price gouging. I am merely stating that there is more to the profitability equation than labor. There is more to the parts equation than a single part in many cases. There is a high probability that the customer can and often does get it wrong at the indy's expense. It is unreasonable to expect that the indy can or should be expected to compete with glaring online WHOLESALE pricing, whether it be Suncoast or Pelican. To suggest that either organization is selling at anything other than deep wholesale price points (as opposed to anything remotely resembling suggested retail) is an absurd assertion. "Reasonable margins and reasonable prices" merely confirms that its sufficient to produce Pelican an attractive profit and entice the customer. That is a far cry from suggested retail. And I stress "suggested". There is a reason for "suggested" retail. And that is to avoid the conflict and disadvantageous, opportunistic whoring of their product.The fact that "at present" this has gone unchecked by most manufacturers, does not indicate that it goes unnoticed or that it will forever go unchecked. Nor should it be. There should be a fair and balanced parts pricing structure and it should not be allowed to be exploited by a select few.

 

I knew that a response similar to that was coming, from some shop owner out there. I am indeed an arch enemy of shop owners. Not only do we sell the parts at reasonable prices, but I also provide the DIY customer with detailed instructions and how-to manuals on how to actually perform the repair. We've sold about 100,000 of my books since they've been published, and the new Boxster 101 Projects book has been flying off the shelf.

That said, for as much as shops complain about Pelican's low prices, we are constantly undercut daily by other online competitors who are more than willing to price their product cheaper than us. These other competitors are the ones driving down the cost of the market, not Pelican. We strive to maintain our competitive advantage by providing excellent Customer Support, technical content, forums, and an extremely comprehensive catalog that is unmatched anywhere else.

If I ran my own shop, I don't think I would allow customers to bring in their own parts, except in special circumstances - there's just too much that can go wrong and too much finger-pointing that can occur. I would probably also charge about 35-40% markup over my cost on the parts that I did obtain for them.

As for suggested retail, this is a number that is randomly chosen by Porsche with apparently no basis in overall cost. The suggested retail for parts is sometimes 300% or more greater than the actual cost of the OEM Bosch part (as is with the MAF sensor mentioned above). I price our parts based upon the cost of what my suppliers (including Porsche) charge for them, not anything related to Suggested List.

I am sympathetic to the issues facing independent shops these days. Keeping up with the tools and technology is a constant cash drain on a small shop. However, if a shop charges $611.96 for a part that they paid $215 for, then that's definitely a contributor to the pricing perception problem.

-Wayne

 

Wayne,

Perhaps you might be good enough then to clear up this one little question.
You advertise a 997-116-013-10 for $285.25
According to the FVD website SRP (Suggested retail price) is $346.71.

If I call Mehmet at Sachs tomorrow, do you think he will tell me that the SRP is a fictitious price on that clutch fabricated by the manufactures or do you think he will tell me that there is a suggested Sachs specified SRP for that clutch?
And do you think your price will be woefully shy of that "probable" suggested level? And if so, what then is your justification?

 

Does this mentality apply to tires from Tire Rack or other online discount sellers?

 

The margin on tires is crap.
Most indy's resolve themselves to the fact that there is no competition.
They are lucky to be able to glean literally $5-$10 per tire.
Frankly, there is little or no advantage to tying up capital for that kind of return.
Most will tell you to simply drop ship.
Exception would be Michelin Cup Tires. Where there is ZERO margin. Most have adopted a fixed surcharge for these or will as you to source directly. Again, it ties up tons of capital for long periods with little such a low margin its hardly worth getting involved.