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Funny time of night to begin such a discussion perhaps but it’s been bugging me today following a customer being shocked at the price of circulation pump for a WHP dw. I rang up WHP to check and quoted him their £91.44 which was only £15 over what I’d have to pay from MP. He decided to think long and hard about it muttering something about new ones even though the present one is built-in and only 2 years old.
I usually set my price at what I think the customer would have to pay if they got it from the cheapest source available to them (not including e-bay where part prices can occasionally be cheaper than trade).
So I’d be interested to know how others set their parts prices and whether we are subject to any legal/regulation on this aspect? ( 😳 I dunno.)
Mike.Re: How much to charge for parts?
The straight answer is “whatever you like”. There’s no RRP anymore, only the SSP. Obviously a bit of common sense must apply……..
In your example, the common Whirlpool d/w pump is £65 + VAT from Masterpart and I keep one on the van. I would charge £85 to the customer for it and 1.5 hours labour (£60). The difference seems to be that I can do the job “on the spot”, so the probability of the job being accepted is higher. Once they start umming and aahing about ordering and being without the machine is where the trouble seems to start. Sales skills become a little more important then……… Typical Whirlpool b/i d/w is what £400 -£450? Plus installation……. Repair in real terms is 25{e5d1b7155a01ef1f3b9c9968eaba33524ee81600d00d4be2b4d93ac2e58cec2d} of machine value, so should be a goer.
Chris.
Re: How much to charge for parts?
I normally use Connect’s SSP which the customer can often see when looking over my shoulder when ordering on my laptop.
If the customer sees the price over my shoulder and I think it is too low, I normally add VAT to the SSP.
Some of the SSPs on Connect are way over the top though (and some are really low) For example, EGO energy regulators have SSPs of £45 – £65.00, with trade prices of about £10! fit even one of these to a hob and you write the appliance off!
I feel that as long as I am making my labour charge and at least 15{e5d1b7155a01ef1f3b9c9968eaba33524ee81600d00d4be2b4d93ac2e58cec2d} on the part then I am making a sensible profit on the job. It’s pointless risking writing off a machine just to try and make a silly profit on a part.
The other point is that it is difficult to suddenly reduce the price after you have quoted, when the customer is umming and erring about the price; If you suddenly reduce the price by, say £20, then the customer may get the feeling that you were trying to rip them off in the first place.
I have been known to get out of this situation by suddenly finding a cheaper supplier. 😉
Bob
Re: How much to charge for parts?
bobokines wrote:I feel that as long as I am making my labour charge and at least 15{e5d1b7155a01ef1f3b9c9968eaba33524ee81600d00d4be2b4d93ac2e58cec2d} on the part then I am making a sensible profit on the job.
Extremely low mark up and would never cover your costs should that part fail within your guarantee period. 25 – 30{e5d1b7155a01ef1f3b9c9968eaba33524ee81600d00d4be2b4d93ac2e58cec2d} is a more acceptable level of profit however.
bobokines wrote:It’s pointless risking writing off a machine just to try and make a silly profit on a part.
A mark-up exceeding 30{e5d1b7155a01ef1f3b9c9968eaba33524ee81600d00d4be2b4d93ac2e58cec2d} would risk the machine being BER and certainly calculating your profit using Connect’s rip off rates will guarantee that, even using your lowest lower percentage calculation! 🙄
Re: How much to charge for parts?
My simple and quick method…
Take the cost price without the VAT, and double it!
This will cover the VAT, admin, and leave you with a nice profit. Remember, we’re not charities!
Unless the part is mega expensive; then just make whatever you want on it.
Re: How much to charge for parts?
Martin has it about right 30{e5d1b7155a01ef1f3b9c9968eaba33524ee81600d00d4be2b4d93ac2e58cec2d} ish. Remember the longer the guarantee the more it will cost your customer. If I have to order any parts I charge £35 plus vat as a deposit and deduct this off the final cost, it is all written down for the customer to see. This way the customer usually wants the job done, and if they don’t you come away with at least something for your efforts. By the way this deposit is non refundable and only lasts for 7 days after letting the customer know the cost of repair.
Re: How much to charge for parts?
40{e5d1b7155a01ef1f3b9c9968eaba33524ee81600d00d4be2b4d93ac2e58cec2d} or indeed double it and add vat.
Nige
Re: How much to charge for parts?
33{e5d1b7155a01ef1f3b9c9968eaba33524ee81600d00d4be2b4d93ac2e58cec2d} works fine for me 😆
Steve
Re: How much to charge for parts?
If I have to pay what I consider a ripoff price I try to still add 20{e5d1b7155a01ef1f3b9c9968eaba33524ee81600d00d4be2b4d93ac2e58cec2d} to the price I pay (not VAT registered). In some cases I take less than this rather than lose the job e.g. Zanussi bearing jobs I only add £20 if I find it needs a new spider as well as the bearings.
I see it as swings & roundabouts, you make money where you can. For example, today I fitted a new oven thermostat to a cheap & cheerful Jackson cooker. The genuine stat is about £22 trade + VAT but I used a Homespares universal one, 6949 which cost me £4.83 inclusive and I supplied for £20 + labour.Re: How much to charge for parts?
I never even bother working on a profit on spares basis. I just decide what i want out of the job and add the direct cost of spares and travel.
If the customer wants a breakdown (which is almost never in my experience as they are usually happy with the price) i just give them a callout & labour figure which sounds good and the remainder is the cost of spares etc.
Its quick and easy and has worked for me no probs for lots of years.
Andy 😀
Re: How much to charge for parts?
I work in a different market to most here (Australia) but have a very simple system; Items under $200 cost – add 50{e5d1b7155a01ef1f3b9c9968eaba33524ee81600d00d4be2b4d93ac2e58cec2d}, Items over $200 cost – add $100
Some parts have exceptions, inlet valves and belts tend to have higher markups, even the RRP can be >100{e5d1b7155a01ef1f3b9c9968eaba33524ee81600d00d4be2b4d93ac2e58cec2d}.
I figure anything less and it’s not worth my while, particularly for some manufacturers I have to pay up front with credit card to get the parts.
Mostly I work on upmarket products which helps as when there has been a bigger investment in the product, there is more chance of a repair being done.
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