Shop Supplies

[Gene]

I am getting some push back on shop supplies from customers especially with gasoline pices. Even if we tell customers up front. We are at 17% of labor with a max of 29.95 and min. of 3.00. Has any body thought about raising labor rates and going to a flate fee on every ro.If you have how in the world would you calculate what you would need to raise your rate.

[jazdale]

17% seems like a lot to me. Especially as we push $100/hour labor.

[Gene]

I am at $100.00 with a bell curve grid. (Atcon) AutoNation in Denver is at $49.95 max on supplies. I was thinking about getting rid of this charge and basically hiding it in the Labor rate.

[Old Irish]

Holy cow. I gotta tell ya, I'd really have a hard time looking a customer in the eye at $49.95 for non-itemized "supplies".

We're at wimpy 7% with, as I recall, a $10.00 max.

If you eliminate the charge and increase your labor rate to cover it I'd have the office make a journal entry every month so you can actually SEE the offset to your supply account. Name your figure...$1.50 per very flat rate hour or whatever....but be consistant.

Cheers
DD

[chrabo]

Old Irish is right. Look at what "supplies" are flowing in and out of that account. We are at 5% of parts with a $12.00 Max with no charge for repair orders under $50.00. I don't feel it is important to make profit on shop supplies, break even is good. Maybe some of those "supplies" can be inventoried and sold for profit.

[Gene]

I hear you. Its a little peer pressure from our 20 group I got into. The owner seems to think if AutoNation can get $49.95 we can get $49.95. It was a struggle to get down to earth at $29.95. I just want to raise my labor rate to make up for it and not charge it on the ro as a seperate charge. If the customer pays for it in the labor rate they wont realize it and wont question it.

[Old Irish]

We're gradually moving more and more "supply" items into our parts inventory and selling them at a profit.

It works.

Cheers
DD

[mnmiamato]

I have heard that it is illegal to add shop supplies in Oregon. Is this true? Can any one verify this? Thanks

[btk]

It is illegal in California. We just charge what we use-4 bolts at .25 c each, brake cleaner -needs to itemized

[Parts Guru]

It is illegal here in Ontario to bill a fee for Shop Supplies. We have diverted most shop supplies to the RO as parts. Everything from Lock Lube to wheel weights and it means more money for parts!

[This message has been edited by Parts Guru (edited 05-01-2008).]