What markup do you think would have been fair? I don't know what is customary at independent auto repair shops, but I CAN share my experience from working at an extremely reputable and honest tv repair shop. We charged $1.00 for a simple fuse that you could buy three for 59 cents at Radio Shack. That sounds like a huge markup, but to be sure we had the right one when needed, we stocked about $300.00 worth of fuses, and sold perhaps two dozen per month. That didn't include those we popped in the shop in someone's tv, that we couldn't charge for. All shops in all service industries have a lot of money invested in inventory. That doesn't mean they get a huge return on all of it. My boss's shelves were full of special-order parts that didn't solve a problem, and there was little chance he would ever sell those parts. They represented breakfast not on his table.
More expensive parts had a much smaller markup but it was still typical for the retail price to be 25 percent higher than the wholesale price. No one that I know of ever asked us what we paid for their new high voltage transformer or picture tube. It was just understood part of the cost of doing business is covered by that markup.
In both trades, there is only one person earning the shop's income. That's the mechanic and the tv technician. The person who runs to town for the parts earns a paycheck but there's no "parts runner" charge on your bill. Someone in the office makes out your bill and collects your payment. They don't generate one single cent of income for the business, yet they deserve to get paid. Where is that money going to come from? Only one person's work generates the income that has to cover all of the business's expenses.
A different way of looking at it is to ask the shop if they will install parts that you bring in. You'll be lucky to find one out of ten that will agree to do that. The other nine know already you're going to be upset no matter what the outcome of the repair. If the part proves to be defective, (which happens more often than you'd think), you're going to have to pay again to have the job done a second time. There went your savings. The exception is sometimes with really old cars, parts can be hard to locate and takes someone's time away from other duties, so the car owner might be asked to help in that regard, but that is not very common.
Don't forget about all the stories about the huge markups for meds in hospitals. Plumbers charge more for pipe fittings than you'd pay at Home Depot. Hair stylists mark up the products they sell. Besides their labor charges, that markup also takes into account their training, experience, and their knowledge of which product is correct for the situation.
Some businesses don't have separate charges for labor and parts, but whether it be a carpenter, florist, restaurateur, or the guy who delivers propane, the markup is there. One way or another, you're going to pay more for any product than the person selling it paid. That's how businesses stay in business so they are there when you need their service.
So the question is not whether the price markup is justified; it's how much is appropriate? I have to agree that $298.00 seems like a lot for such an expensive part, but if that's the suggested retail price of the pump, your wallet wouldn't feel any better if the mechanic's cost was $569.00. The parts stores always give their best prices to their best customers, (shops), to gain their repeat business. (Napa marked the price up too). You should feel fortunate that Napa was willing to give you the same price as their best customers.
In Wisconsin, you have the right to receive a written estimate for repairs before the work is started, but sometimes it's hard to be accurate until some diagnostics are done. With that estimate in hand, you can sometimes comparison shop but without seeing your car, some shops will be reluctant to do that. It's easier doing that with standardized services such as four-wheel alignments, tire balancing, and other things that are likely to have preset prices. It's not so easy with things like fuel pumps and transmission repairs because there's too many variables. Being in Wisconsin, the road salt capital of the world, you know all about rust. That can double the published times of some jobs. Even the labor rate guides make allowances for rusty gas tank straps and fittings.
What you should not do when comparison shopping is tell someone the guy down the road will do a job for a certain amount; can they beat it? They will be inclined to give you a much lower amount to make themselves look better than their competitor. Later, of you bring the car there, they'll have to figure out a way to tell you it will cost more so they can charge their regular rates. Instead, just ask for a quote to perform the needed work on your car. Remember though that the first shop has diagnostic time invested in the repair.
On the other side of the coin, there are some shops that I feel are grossly over-priced. Here in Wausau, we have two chain stores that are well-known for being expensive. The work they do is fine, but one in particular, for a brake job, replaces way more parts than necessary. We were constantly giving second opinions where I worked at the Chrysler dealer across the street, and our $200.00 brake service was a far better deal than their $650.00 brake job with all those unneeded parts. That other shop often has empty service bays. The other high-priced place is a tire and alignment national chain store. They have a lot of good published prices for standard services, but when it comes to something "not on the menu", I've seen copies of some of their bills, and I don't know how they can sleep at night. Since then I've been telling people the new car dealerships are not necessarily the more expensive places to go. I have a lot of other unrelated stories about less-than-ideal business practices both in tv repair and car repair. Most shops were very honest, but a few were outright crooks that gave a black eye to their entire industry. THOSE are the ones we hear about. Honest mechanics and tv repairmen don't make news but there's a bunch of them.
So, while I agree I wouldn't be very happy to have to pay $1100.00 for a fuel pump, don't be too quick to be angry with the shop or mechanic, especially if they have good reputations. Give then a second chance to earn your trust, but try to get an estimate first, if possible.
Sunday, August 14th, 2011 AT 5:32 AM