Profit Margin on Auto Parts ?

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What is usually the profit margin on auto parts ? Let say an OE clutch kit Exedy for Honda S2000, what is profit margin that some big seller like Amazon, Rockauto ... have on these parts ? 20% or 30% or 50% or more ?

Some lower priced parts such as brake rotor they have smaller profit margin about 20-25%, but parts that are rarely fail (like 5-6 years or longer) so that it is a low volume parts they would make better profit ?
 
Here in Canada its probably as much as 100% markup, even paying shipping to Canada from rockauto a lot of the time its cheaper to buy from there than it is locally which is pretty sad, if I'm able to buy from rock, ship to Canada all for less than the local parts place they're doing something wrong.
 
Like any business certain segments of it will be more profitable than others. I'd guess auto parts are fairly good overall though, cause I get smoking discounts from AAP on line and you know they are still making money at that.

Those kinda discounts in my business I would be losing money big time.
 
I recently purchased an O2 sensor. Amazon price is 105. Advanced Auto Parts' price is about $175. I figure wholesale price is about $85 so about 100% markup at a B&M auto parts store. .

I don't think the profit margin has anything to do with the longevity of the part.
 
Originally Posted By: Leo99
I recently purchased an O2 sensor. Amazon price is 105. Advanced Auto Parts' price is about $175. I figure wholesale price is about $85 so about 100% markup at a B&M auto parts store. .

I don't think the profit margin has anything to do with the longevity of the part.


A lot of the prices you see on Amazon are priced at right around dealer cost. So less than wholesale. If that was a Ford part, the "wholesale" cost would be around $140, or 20% off of list.
 
Profit margin doesn't = markup. FYI, a 30% gross margin equals a 42.9% mark up and a 50% gross margin equals a 100% mark up. Most businesses deal with margin percentages not mark up percentages.

With that said, margins (independent Napa not a corp store like AAP or AZ) are all over the board. Chemicals are usually 40 to 50% margin if the item isn't on sale. Most hardparts are 30 to 40% except on custom priced lines due to competition. We only make about 20% on hub assemblies. Anything on sell is usually a 10-15% margin. Oil and chemicals are a wash or a loss.

Every store is different and it depends on their area and what type of competition is involved. Cost to open the store is around 30%. Of our five store, 2-3 make money, 1 breaks even, and 1 always loses money.

Any questions-just ask. Been doing this for 32 years.

Dave
 
GP=Gross Profit.Thats what matters.
Overall 40-45% is average.
Back in the day,some claimed to be getting 45-55%.Thats just gouging.And uncompetitive in todays market where O'Reilly,Pep Boys,Advance,Autozone are all one-upping the next one.
 
Originally Posted By: bdcardinal
Originally Posted By: Leo99
I recently purchased an O2 sensor. Amazon price is 105. Advanced Auto Parts' price is about $175. I figure wholesale price is about $85 so about 100% markup at a B&M auto parts store. .

I don't think the profit margin has anything to do with the longevity of the part.


A lot of the prices you see on Amazon are priced at right around dealer cost. So less than wholesale. If that was a Ford part, the "wholesale" cost would be around $140, or 20% off of list.


Maybe my definition of "wholesale" price is wrong. I'm meaning that Amazon is paying about $85 for the part and selling it for $105. AAP is paying $85 for the same part and selling it for $175.
 
Way back in the eighties, my father was involved in a Honda dealership.
Their markup on parts was 100%, but there were of course discounts for the many indie shops that regularly bought parts.
AAP isn't offering 40% discounts to lose money.
If their parts sales are profitable at 40% off, the markup must be substantial.
Rock always offer 5% off, so they must also have enough markup built into their pricing to allow for this.
With Amazon or Ebay, you never really know what you're buying until you get it.
Some of the parts offered on both are NOS stuff for older models bought dirt cheap from sellers just wanting to get rid of inventory they can't move while other parts are knockoffs of Lord knows what quality from somewhere in the developing world.
Caveat Emptor.
 
It varies by the customer, type of part, manufacturer's prices, distributor prices, etc. There can be pretty wide variances.

Where I work, the bulk of our sales by far are to body shops, then to mechanical shops, then to our own body shop, our repair shop, and then finally sales and retail makes up the smallest percentage. The margins are lowest with the body shops (in the 20s % wise for gross profit), but the volume is so high we can do that. Margins are highest for retail priced parts obviously, which are usually sold at MSRP or no more than 20% off MSRP.

Also, sometimes a dealer or distributor will get "truckload price" on something and be able to sell it below the normal manufacturer's cost. For example, some engines and transmissions I will buy from another dealer rather than from the manufacturer, because the other dealer buys such a large quantity that the manufacturer cuts them a huge discount, and they can sell me an engine for less than if I were to order that single engine from the manufacturer. I'd have to buy a truckload of those engines to get a better price.
 
Originally Posted By: fdcg27
Way back in the eighties, my father was involved in a Honda dealership.
Their markup on parts was 100%, but there were of course discounts for the many indie shops that regularly bought parts.
AAP isn't offering 40% discounts to lose money.
If their parts sales are profitable at 40% off, the markup must be substantial.
Rock always offer 5% off, so they must also have enough markup built into their pricing to allow for this.
With Amazon or Ebay, you never really know what you're buying until you get it.
Some of the parts offered on both are NOS stuff for older models bought dirt cheap from sellers just wanting to get rid of inventory they can't move while other parts are knockoffs of Lord knows what quality from somewhere in the developing world.
Caveat Emptor.


There's a standard mentality that stores can't lose money based on the sale price. But stores go out of business all the time. I can certainly see Advance Auto losing money on some parts that are sold at 40% off, however maybe they write it off against their marketing or advertising budget or maybe they're hoping that you buy other stuff that doesn't have that discount to make up for it.
 
I am looking for OE Exedy clutch kit for my S2000.

The price of Exedy OE clutch kit is all over the place, as low as $240 on eBay by several sellers(mostly selling clutches of all types) in Orange and Los Angeles Counties.

Amazon sells it for $376 plus 8% tax, Amazon third party has it for $290 shipped(don't know about tax).

Rockauto has it for $436 plus $10 shipping but no tax.

The lowest price is eBay, since sellers are within driving distance(20 to 30 miles) I can go there to check and pay in person. I think I will submit best offer with a note that I will pay in person so they don't pay eBay fee and shipping, I may be able to get it for $200-220(plus tax ?). I will pay with credit card so I will get some protection from credit card company, if anything goes wrong.

Looks like profit margin for some items can be as high as 50-60% at major retailers such as Amazon and Rockauto.

If someone on eBay can sell it for $240 shipped, their shipping cost and eBay/Paypal fee(s) can be as high as $30-40 so that their net is around $200, if they make only 15-20% their cost is $160-170.

It is the same old story, it pays to shop around.
 
If AAP were really losing money at 40% off, then they wouldn't be offering the discount virtually all of the time.
If you compare AAP's regular prices with those of Rock, say, you'll see that there's plenty of pad built into their list retail pricing.
Also, I would guess that most of their parts business must be with shops, and no shop is paying retail list for parts from AAP or any other source.
 
Originally Posted By: fdcg27
If AAP were really losing money at 40% off, then they wouldn't be offering the discount virtually all of the time.
If you compare AAP's regular prices with those of Rock, say, you'll see that there's plenty of pad built into their list retail pricing.
Also, I would guess that most of their parts business must be with shops, and no shop is paying retail list for parts from AAP or any other source.



Exactly correct. This doesn't take 30 years of experience to comprehend.
 
Originally Posted By: fdcg27
If AAP were really losing money at 40% off, then they wouldn't be offering the discount virtually all of the time.
If you compare AAP's regular prices with those of Rock, say, you'll see that there's plenty of pad built into their list retail pricing.
Also, I would guess that most of their parts business must be with shops, and no shop is paying retail list for parts from AAP or any other source.


I think you still don't get it. Technically they may not be losing money in terms of their cost for the item, but it's possible that once you factor in overhead, and other fixed costs like rent, employees etc., that they're not making enough money to cover all their costs. And I do use a mechanic who has an account there, they give him some standard discount, but it's not 40% so it's still cheaper for me to get the parts than for him to get them.
 
I think I get it perfectly well.
If AAP couldn't make enough contribution margin on heavily discounted items to cover their indirect costs, then they wouldn't offer the discount, simple as that.
Retailers do not offer discounts on a regular basis to lose themselves money and I'm pretty sure that AAP has competent accountants and a good handle on their costs.
AAP is also aware that most of their parts sales to individuals are on an as-needed basis, so offering the discount will not increase demand from these buyers, although it will encourage these buyers to at least shop AAP's site.
This isn't comparable to Kroger offering a few items at or below cost secure in the knowledge that you'll buy a bunch of other higher margin items as well.
A good example of how high markups can be can be found in motor oil pricing.
Compare the regular shelf prices of M1, or any other name brand oil at AAP or AZ with those found at Walmart.
You think Walmart is pricing M1 to lose money on it, particularly since Walmart is well aware that the only reason many car guys set foot in one of their stores is to buy motor oil at a decent price?
 
You give people too much credit. Companies go out of business too. Notice what happened with JC Penny once they got rid of discounting? They did even worse. They were losing money to start so they tried to turn things around and did even worse. Once you start offering discounts, it's very hard to stop and not lose even more business. On certain items they may make a profit, but on others they may lose money just because they can't price everything high enough to still make money at 40%, but not overprice it over the competition so that they don't get any sales at all.

Walmart is also different from a regular auto parts store, they actually do the most volume in the country so their pricing is probably lower than what auto parts store pays. Plus there's no help in the auto parts section so less employee overhead. I think someone else mentioned that those auto parts stores don't really make any money on oil, they just have to stock it because that's why some people come into the store. But their prices are higher than Walmart, but that doesn't mean they're making money. Like I said, their overhead is higher. having higher rent means price per square foot is more and also more employees and higher pay means that they have to price things a little higher just to break even. You don't think that auto shops that just charge $20 to change your oil are actually making money do you? There are also things out there known as loss leaders.
 
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