The day I realized my pricing was all wrong after a customer walked out

I run a small auto repair shop over on Gratiot, been at it for about 12 years now. Last summer, a guy drove in with a 2010 Ford Focus, needed a new alternator. I quoted him $650 like I always did for that job, parts and labor. He just laughed, said 'I can get this done for $400 down the street' and left. I was pissed at first but then I started calling around my competitors to see what they were actually charging. Turns out I was marking up parts by almost 40% while every other shop in Detroit was doing 20% max. I had been scaring off customers for years without even knowing it. Now I track my pricing against three other shops every quarter. Anybody else ever get a wake up call like that where you realized your numbers were just off?

3 comments

3 Comments

the_wendy4d ago

That 40% markup on parts really hits home. I went through something similar five years ago when I ran a little bakery in Hamtramck and found out my flour and butter supplier was charging me almost double what the bigger shops paid. I spent a whole weekend on the phone and switched suppliers, saved 30% overnight. It is a tough pill to swallow when you realize you have been the one making it harder for yourself, but good for you for actually checking it out instead of just staying angry.

corablack4d ago

Oh man. That stings but saves you later.

jakejones4d ago

The part about realizing you've been making it harder for yourself really sticks with me. That's the kicker, right? It is one thing to get ripped off by some faceless corporation, but it hits different when you find out you were the one signing the bad checks the whole time. The bakery story proves that sometimes the big shops aren't smarter, they just happened to ask the right person first. A weekend of phone calls to save 30% is a no-brainer once you know what you are looking for. The hard part is getting over that initial embarrassment and actually picking up the phone.