A few days ago I bought a 94 Ford F-150 pickup with a 5.8 litre(351 cubic in.) engine. I noticed the oil looked black and needed a change. Living over 100 miles from an Advance Auto Parts or Wal-Mart, I went to my local friendly Ford dealer to purchase a couple of Motorcraft fl-820s oil filters. Their price was $7.75 each not including tax. If Wal-Mart can sell them for $2.77 each and still make a profit I figure Ford must have atleast a 200% markup. If they have that kind of markup on something as common and competitive as an oil filter, What kind of profit do they make on parts that can only be purchased through Ford? Does anyone have any idea or any inside information? I realise this is not exactly an oil related question, but after thinking about it I couldn't help but ask. TIA for any replies.
How much is the markup on Ford parts?
- Thread starter highmiles
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There are numerous websites that will give discounted prices for Ford Parts--and will also give the list price.
An Example would be:www.cheapfordparts.com
These site suggest that there is a sizable markup on the price that is "list"or "suggested".
An Example would be:www.cheapfordparts.com
These site suggest that there is a sizable markup on the price that is "list"or "suggested".
Dealers ALLWAYS way overprice everything they do/sell. ALLWAYS! That's why many people refer to them as "stealers". I know someone who works for Mercedes so I am suppost to get all Daimler Chrysler vehicles/parts "at cost". They wanted to charge me $250 something for an alternator! I can't imagine what they would charge the average person...
Kestas
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My girlfriend works at the Ford Brownstown warehouse facility. She sees Ford's purchase price as well as the selling price. The markup is roughly ten times what Ford pays from the supplier. For example, she sees headlamps that are bought for $16 that are probably sold for $130 at the dealer. To be fair, the warehouse workers need to get paid and Ford is sensitive to quick delivery to the dealer service facilities. And then there's the issue of low volume specialized parts. That's why I'm not a big fan of auto manufacturers offering "niche" vehicles. But ten times!!... Geez!!
Given these markups, you can see why the japanese have started selling replacement parts for American cars, even though these are low volume parts by industry standards.
I used to work at Ford. I remember during slow sales in a recession, people held on to their cars longer, and it was the Parts and Service Division that turned a profit to keep the company afloat.
Given these markups, you can see why the japanese have started selling replacement parts for American cars, even though these are low volume parts by industry standards.
I used to work at Ford. I remember during slow sales in a recession, people held on to their cars longer, and it was the Parts and Service Division that turned a profit to keep the company afloat.
It generaly works like this: Corperate marks part up 10X before it sells to dealer. Dealer marks it up 2X before he sells to consumer.
So if a part cost the OEM $1 they will charge dealer $10 for the part. The dealer turns around and charges $20 to the consumer.
This is just a general rule of thumb. Obviouly if the part is ultra cheap or ultra expensive a different mark up rate is used. So a $.05 fastner or an engine would not follow this rule of thumb.
So if a part cost the OEM $1 they will charge dealer $10 for the part. The dealer turns around and charges $20 to the consumer.
This is just a general rule of thumb. Obviouly if the part is ultra cheap or ultra expensive a different mark up rate is used. So a $.05 fastner or an engine would not follow this rule of thumb.
When I had a bunch of work done on my '99 Taurus a few months ago (at the dealer not under warranty) I looked up the part #'s on Fordpartsnetwork.com and they were about the same if not a touch more than what the dealer charged me. I've always have found a price discrepancy between local dealers in my area though.
A buddy of mine uses an fl820s on his cobra. He was buying them at a dealer for 15 bucks a piece. Due to the cost, he thought that they were some special kind of filter, and didn't know that autozone carried them for 3.50. Walmart around here doesn't carry that model for some reason.
Understand that dealer are privzate business man and can gouge if they want to. THey can also give you a discount if they choose too!
I have 2 dealers by me. One is 8 miles away and the other is 10 miles in the opposite direction. The closer dealer charges $4.95 for a FL200 oil filter and the other one charges $7.95. Unfortunately WallyWorld doesn't carry this Motorcraft model. Yet I can get the same oil change service at the dealer that charges more for the oil filter, for $8.00 less than the "cheaper" filter dealer. And they use Motorcraft oil. I'm not sure what oil the dealer that charges more for the oil change service uses. The important thing is to shop around. Either comparing different local retail establishments or use the internet to shop.
Whimsey
I've been trying to do more DIY on my vehicles as of late. I have been at my local Dodge dealer a dozen times in the last 2 months. I always ask the parts guy if they can "help me out" on a price and they always knock 10-20% off.
When convenient I try to get parts where the fleet department guys in my company get their parts and ask for the same discount. I never had a problem in getting 15-20% off Ford OEM parts.
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Going slightly OT here....
When I used to work in the trade and had a few buddies that owned autoparts stores the pricing was simple.
List: 100%
Trade: 75%
Jobber: 50%
Distributor: Less X% (10%) less X% (5%) less X% (5%)dependant upon volume.
The same thing worked for tires in the past.
Now, however, it goes something like:
List:100%
Trade: variable price dependant upon the negotiated volume purchase price of the jobber (PepBoys, NAPA, BIG A,).
Hence a set of normally $65 ceramic pads for a Honda of a high volume mover..may be $29 to the shop who installs them. While the $85 list remanufactured wiper motor may cost them $69.
When I used to work in the trade and had a few buddies that owned autoparts stores the pricing was simple.
List: 100%
Trade: 75%
Jobber: 50%
Distributor: Less X% (10%) less X% (5%) less X% (5%)dependant upon volume.
The same thing worked for tires in the past.
Now, however, it goes something like:
List:100%
Trade: variable price dependant upon the negotiated volume purchase price of the jobber (PepBoys, NAPA, BIG A,).
Hence a set of normally $65 ceramic pads for a Honda of a high volume mover..may be $29 to the shop who installs them. While the $85 list remanufactured wiper motor may cost them $69.
I have purchased genuine Ford OEM parts wholesale from Lone Star Ford in Texas, they have a web site. Great service, huge savings, even with shipping, and based upon that I would say that the average dealer is as much as 100% higher then wholesale by a Ford dealer (retail) depending on the part. What irrtates me is that for many parts the dealer does not even have it in inventory (normally a reason for higher cost) and just orders it from the warehouse yet they get to gouge the consumer for it.
OEM sensors are a necessity. Like o2 sensor, knock sensor, etc.
Some other stuff is best only at dealerships. like fuel pumps. I had one fail, looked around - autozone, etc. had them for $150. I wanted an OEM one, because of the labor involved - they were $200 or on the web anywhere I looked. Local dealer had one for $175.
A lot of stuff at Autozone/Advanced auto parts etc. is junk. Like anything electrical, plug wires, the cheapest is junk. Sometimes you must use OEM. You may or may not get the best price on-line, especially considering shipping.
Some other stuff is best only at dealerships. like fuel pumps. I had one fail, looked around - autozone, etc. had them for $150. I wanted an OEM one, because of the labor involved - they were $200 or on the web anywhere I looked. Local dealer had one for $175.
A lot of stuff at Autozone/Advanced auto parts etc. is junk. Like anything electrical, plug wires, the cheapest is junk. Sometimes you must use OEM. You may or may not get the best price on-line, especially considering shipping.
I know my loacl Parts Guy at the local Toyota Stealership. We've had many such conversations and remind him often about how many Toyotas I have purchased from his Boss. He gives me 25% every purchase - no questions asked. Wonder what the REAL mark-up is?
i know that we sold fuel system components (say a fuel pump) for about $x within the production stream, but pumps that were sold as aftermarket (same pump) were sold at about 4 or 5 * $x. this is pretty common for tier 2~4 suppliers.
Having worked in Ford parts in the past for several years, I can tell you...
Many body and chassis parts, 67%, 40%, 33% or 25% off list is the "dead cost" from corporate. It just varies between type of part, foreign, import, etc...
Motorcraft parts are generally the most marked-up as they have the most aftermarket competition. This gets tricky, somewhere between 33% and 110% off list is the "dead cost" for popular parts, including M-craft branded electronics. Oil and air filters are not fair game...dealers can't purchase them at the same price/quantity that the Walmarts can. That's why dealers can't sell them at low prices.
And remember, all prices I mention here are from "MSRP". The dealer can sell them for whatever they want to. I only worked for one dealer where the sky was the limit--the rest went straight by the book (good thing).
One last thing, use Ford/M-Craft plugs. I've seen too many come into the shop for "rough" idle soon after they've had a tune-up from a non-Ford shop. The heat ranges aren't always the same. Some aftermarket plugs work ok, but some don't. Just my $0.02....
[ January 19, 2004, 12:13 AM: Message edited by: ToyotaNSaturn ]
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