Dealers Raise Labor Rates and Other Fees

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mecp-tech

As suppliers increase dealer costs on many car audio products, so dealers are starting to raise service fees to consumers to make up the shortfall.

Some suppliers are keeping their Minimum Advertised Price (MAP) price steady while raising the cost to dealers of these goods. Others raise the MAP price, but not in true proportion to the amount of the dealer cost increase. Either way, dealers are reporting a margin squeeze and are looking for ways to add to their bottom line.

Additionally, some retailers say times are good in car audio, so they are finally able to raise fees for their labor and for miscellaneous charges on installation wiring and other materials.

Soundwaves, TN is raising labor rates by 10 percent effective April 1. It also began adding a miscellaneous charge for wiring and other supplies last month.

Sound Warehouse in UT is raising labor rates and SoundFX, RI is doing the same.

Westminster Speed & Sound, MD raised its labor rate in October of 2020 by $10 per hour.  Owner Mark Miller added, “We raise pricing on accessories to keep the same margin any time there is a price increase.”

Don Amann of Unexpected Creations, NJ is considering raising the fee for those customers who walk in with their own equipment, looking for an installation only.  He named two suppliers who recently raised dealer costs on products but didn’t raise MAP in the same proportion.  “We have to make up for it somewhere. I totally get manufacturers not waiting to increase prices to consumers, but you can’t expect the dealer to survive with lower margins.”

SoundFX is planning to raise labor rates from $95 to $105 for custom labor, with small increases for amplifier, speaker and radio installations, said Mark D’Elia. “You may as well if you are getting to the point where there’s limited competition and you are the only show in town and you are three weeks out in appointments, obviously you can push the envelope and charge more for services,” he added.

Freeman’s Car Audio, NC, is considering raising labor rates but is assessing the current state of the economy.  Said CEO Dave Wall, “ We have not raised labor rates recently but it has been a topic of discussion. The equation is getting more complicated as we see vendors make price increases on one hand, and on the other we see ‘experience industries’ beginning to open back up as Covid restrictions relax. I think the question may be, how does it affect demand for goods, as consumers have more travel and experience options come available?  We are very optimistic we can navigate this year with great success but any labor changes will need to be thoroughly thought out before being implemented.”

 

 

 

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1 Comment

  1. It is the same amount of shop tech time whether the customer buys from me or drags his purchase in for me to install-just much less profitable. Why do the same amount of work for less money. We are not a charity.

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