Tradesman - Price markup on parts

[GB]

Even I get a 10% discount at Wickes.

[alan_m]

Go and Google for the best price for, say, a TV (identical model numbers) or white goods (identical model numbers). Prices inclusive of delivery and only from those suppliers with stock who can deliver quickly. You may find that it takes more than a few seconds.

[John Rumm]

Not if you are buying at retail price yourself and then selling on.

Many small businesses find that their "trade" prices are often only very slightly below retail (if it at all), and in some cases they can be higher!

So if a customer wants you to supply both materials and service, they will have to be prepared to pay the higher prices on the materials.

[Chris Green]

Not to mention that it's only those suppliers who pay who get their goods onto Google Shopping (I'm assuming you mean to use Google Shopping).

Google Shopping can be quite good for finding reasonable prices on straightforward things but for 'insides of boilers' type things (which is what this thread started with) it's often not the best/cheapest approach.

[John Rumm]

If I supply equipment to a customer, and something fails, then its my responsibility to fix, even if the failure was not my fault.

That costs time and money, and in the circumstances, its time and money I can't recover that from the customer if the equipment is still under warranty.

So that is an overhead that one has to build into your prices.

Even if the OEM will replace the kit FoC, there is still the time spent diagnosing, and orchestrating the process.

(hence why some OEMs will voluntarily take on the responsibility for warranty support directly with end users even though they have no legal obligation to do so - it can be a cost and risk reduction exercise for the retailer, that makes those companies products more attractive to sell)

Not necessarily. For businesses that make a significant proportion of their income though product sales, then the margins will tend to be higher since they need to cover the majority of the costs of operating the business. Pubs for example will typically mark up drink well in excess of 100%, and most of those are running very close to the edge even then.

If you go buy a sandwich in M&S you will pay several 100% over the cost of the bread and fillings. You are paying for many things, not just the cost of the materials.

[tabbypurr]

It's a free market, they can quote what they like & you can say yes or no.

Re customers getting parts, that route is a recipe for trouble for the professional. I'm not surprised most won't get involved with that.

NT

[Theo]

But also bear in mind that random suppliers returned by that Google search may or may not be reliable, may send the items by Hermes who fling it into a hedge, etc. Getting everything on one delivery / one trip saves a lot of hassle.

For example, there's a lot of merit to one-stop-shop suppliers like Farnell

- they aren't cheapest, but when your BOM is a hundred lines long it gets a lot of hassle to try to source every part from a different supplier. You could make one order per job, and have all the bits arrive next day in the same box.

I suffered the opposite of this when I had a 30 year old car. I'd take it to a garage to get say the brake pads changed. Tap,tap,tap (or in the more basic places, ringing round their suppliers), I'm sorry we can't find the parts. But the parts were readily available on ebay for pennies, from decent brands just NOS that had sat on a shelf for a while (probably out of production).

It was often an uphill struggle to convince them to let me supply my own parts - they would complain they wouldn't get the markup on the parts. To which my response was: fine, just quote me a price including whatever markup you would have made. I didn't mind paying extra for that - because even if they could buy the part for £50 and mark it up to £100, paying them £50 plus the £10 ebay price was still a win from my point of view. Many didn't see it that way.

(there's a risk with user-supplied parts that they don't fit, but again that's my risk not theirs - I should still pay for their time either way. And I spent more time staring at the parts catalogue making sure they fit than they would ever have done)

Theo

[Tim Streater]

Who d'ye think the customer is going to contact, if the part is faulty? Who d'ye think the customer is going to expect will pay for a new part. Who d'ye think the customer is going to expect to have to hassle the supplier for a refund?

[williamwright]

30% mark up on what I paid. It was arbitrary really.

The facts are

1. Tradesmen need to make a certain amount of money

1. They are in competition with other providers or with alternative ways the customer has of getting the job done.

2. The public can be unrealistic about hourly rates, because they don't understand about overheads.

1. Some tradesmen try to hide the necessary hourly rate by excessive mark-up on materials.

2. Some tradesmen are too cheap; some are too dear. Both of these tend to go bust.

1. Some tradesmen are crooks, no other word for them.

Bill

[williamwright]

Many years ago a major aerial manufacturer lost a lot of their trade business because they were selling to the DIY sheds at much cheaper prices than they were selling to aerial riggers. The trade simply switched to other brands en masse.

Bill

[williamwright]

Sometimes it's best. If they want some weird gear so they can get a weird foreign TV channel or whatever, or if it's some radio ham wants a strange aerial, a sensible tradesman will not offer to supply.

Bill

[tabbypurr]

Few tradesmen will get involved in odd setups these days. Times have changed. I remember buying from a place where they had electrical stuff plugged in, some with bare live bits that should not have been live. They knew and couldn't care less.

NT

[DJC]

The difference between 'trade' and 'retail' is very vague these days. A small tradesman is probably not getting a significantly better deal than anyone else prepared to shop around.

[Andrew]

100% is pretty well par for the course in the garage trade. My ex-MOT-tester neighbour still does it for all the private work he still does. And he charges VAT on the bullshit 'retail' price and then pockets the extra 20% on the markup.

[Andrew]

I'd bet that the product sold in big volumes to the likes of B&Q was made from thinner tubing etc, like Labgear s**te.

[Andrew]

even screwfix have a 'trade only' grotto now.

[Andrew]

Or even "some 'strange' radio ham wants an aerial" :-)

[RJH]

Might that explain why any garage I've had dealings with won't fit parts I'd supply?

[Fredxx]

Some garages will, but then qualify the fitting where if the item fails they are not responsible.

I specifically known a local garage fit the owner's supplied discs and pads without issue.

[alan_m]

Too many customer supplied counterfeit parts purchased on Ebay?

Need for traceability of parts from known suppliers for safety, liability or insurance purposes?