HVAC Parts Mark Up Venting

Ok I need to vent a little. Last couple days the furnace has been acting up. Would cycle on but not ignite every time. Had this happen about 10 years ago and it was a bad gas valve. Later on a guy told me to tap it with a plastic hammer if it happened again. Over the years it has worked doing this. Well at 4AM this morning I woke with no heat in the house and 52F. (nice and warm under the down comforter) Went and tapped it but no go. Not wanting to wake the whole house I waited until later and tried again. Still no go and I noticed the glow plug wasn’t lighting up. Figured it was the control module and called the company that installed it. Real nice guy comes out and we talk it over. He takes a few meter readings and says yep the control module. Just happen to have replacement in the truck. Read some skematics and flip flop some wires and we are good to go. Parts $190, labor 1 hr $72, fuel surcharge $5. Now I don’t begrudge companies making money. But all of it on me?? I just found the same control module online for $98 and that company is making a profit selling it. I live a block and a half outside city limits so the fuel surcharge. Whatever!! Not sure I feel any better but just had to tell my family on IDA. I know what my xmas present is.

I’d call the company and tell them you found the same unit on the Internet for $100.00 less. Ask them what’s up and see what they say. Be polite at first. If not satisfied with their response contact the better business and the attorney general’s office to let them know what is going on. A reputable company will work with you to make you satisfied. Good luck.

Make sure you compare “apples to apples”, meaning that make sure the part you found for $100 less is the exact same part, manufacture, etc.

If you call the Chevy dealership and ask them for a fuel pump, it is $400. Call NAPA and a fuel pump is $100.

The difference: One is OEM, the other is a “remanufactured”.

Also, you do have to take into consideration that the repair man/company purchased the part, maintained that inventory in their truck, and gave you quick turn-around service when your furnance was in-op. It cost money to have inventory on hand, especially in a service vehicle.

If you would have chosen to sit in the cold for a day in order to get that other part for $100 less, you would have to pay tax, plus OVERNIGHT shipping to get it to your door, within one day.

If overnight shipping isn’t satisfactory, then you can have the part placed on an airplane and shipped direct for a fee, right to your door, courier. We did this in the medical field, when producing hip-implants. When the part was completed and sterilized, we threw it in a taxi, sent it on an airplane(yep, bought a ticket) and a taxi was waiting at the receiving airport, to deliver to the hospital.

(Now, you know why emergency rooms cost so much).

Sucks, but what are your options?
I don’t mean to belittle your post, just giving you the prespective on the other side of the fence, as I’ve been there many times.

Sounds to me like you got pretty fair service at what sounds like a fair price. Services tech sounded like he showed up right away. Got the problem fixed quickly and only charged a hour for the serivce. I have heard of far worse ordeals from service companies out there.
As far as the cost of the part here is my take on it. You cant realy compare what your service provider prices a part at and what a retailer may sell it for. A couple of the differances are. Most retailers have greater purchasing power than your local service provider. Lots of time the service provider may be purchasing from the same retailer as you can by it from for the same price as you can get or maybe a small discount. What he then needs to add onto the cost of that part is not only his mark up for profit but additional pricing to cover time spent purchasing the part, stocking it, record keeping for it, possable stocking time if it was stocked in his shop, and the list goes on and on. 100% mark up on parts from a service company is not surprising. Alot of times it may be much more than that. Try thinking along the lines of what would that part may cost if they didnt mark it up but you had to pay the serviceman the hourly wage to drive somewhere to purchase the part and bring it back to your home.
Sorry if this wasnt the response you where looking for.

I agree with every thing both Gary and Mike said.

Heck, it’s winter time, have to have heat, they come right out and give you heat so you and your family can stay warm and it cost under 300. I wouldn’t be “venting”. Homes cost money to upkeep, MANY, MANY more things that could’ve cost more than that to repair, I’d be thankfull my home is warm and it didn’t cost you thousands to do so.

BIRDDOG

Gary and MikeW: I understand what you are saying. I know the cost of stocking parts inventory is high and all about expediting costs. I use to manage 120 employees and a $12mil budget. We never operated with that kind of profit margin. I just did a little more online searching and yes it is an exact match. I also found it on ebay out of Mpls for $69.95. Like I said before I was venting. Too me the mark up is just too high.

Okay. Glad to hear you got it fixed anyways. Its cold out there.

I used to be in HVAC sales (10yrs), and I can tell you this.

1st For parts-
The average mark up is roughly 300%. Yes that’s 300%.

2nd For the labor-
The journeymen wage as of May 1st 2006 is $50.13 per hour, that’s just what the worker makes before you pay his/her company for “providing” them for you.

I won’t even go into the “fuel surcharge”. That one upsets me always. Wonder how long till my pizza guy tacks that onto a large pepperoni

Sounds about right to me, I am in the commercial side, try owning a 600 ton chiller and have the motor go out 30,000+

Your lucky! He didn’t charge you a service call! Average is $125.00 to show up at your door, plus $96.00 an hour after the first 1/2 hour! You could have order the part, but can you gaureentee that it is put in right? They have to gaurentee their install.

He knew what part was bad and fixed it in an hour. That’s pretty good. Cost of part might be high, but if you took a chance on what you thought was wrong, ordered the part online and installed it and it didn’t fix it, then what?
Electronic parts are generally not returnable because they are to easy to connect wrong and get burned up with no physical evidence of it being ruined. It is hard to bite the bullet on this one, but he did repair it quickly.

The part seems on the high end, but in my neck of the woods the labor would have been much higher because they always tack on an additional charge for a service call.

You guys are a tough crowd to get sympathy from. But the bottom line is it’s fixed and the favorite wife is warm and happy. It’s just $300 less whiskey for me. If it goes out again I would take the chance on doing myself. I consider myself pretty handy. And have a meter and can read electrical skematics. Let’s go fishing.

You paid for someone’s experince to repair your HVAC equipment. You paid for indirect costs in addition to the part and the employee’s labor. You paid a fair price for what was done. I’ll give you a breakdown on our prices for HVAC service.

$173.95 Nights and weekends trip charge/diagnostic fee

$ 98.00 Normal business hours trip charge/diagnostic fee

$424.84 Ignition module

By our prices you got by really cheap. Our price is flat rate, meaning, that was the cost to you for the part whether I have it on my truck or not and no matter how long it takes to put in. We don’t have many items for anything less than $100.00.

You guys see the price of the part and how much per hour you are charged for labor. Well this is what goes in to a service call or better yet what comes out of a service call. The answering service that answered your call at night, insurance, work comp, truck, general liability, unemployment, bonding, licenses office supplies, gas, consumables (wire ,nuts rags screws solder the list goes on and on) wages for office staff, accountants, taxes, shipping, parts inventory that sits on a shelf so we can fix your furnace at 4am, truck payments, truck maintenance, tools, tools that are lost, rent of building I run my shop out of, insurance for my building. Training for technicians’, replacement of parts that are broken lost or damaged by installer, gas to heat my building, electricity, water sewer. The service technicians get paid from the time they get to work till the time they go home not just the time they are at your house. If the part go’s bad we have to warranty the labor on the part, and we will not get reimbursed by the supply house for labor plus if a service tech is on a warranty call he can’t be generating revenue so you pay twice. If I were you I would not use the guy you used to repair my furnace because at the prices he charges he won’t be in business vary long

You always feeled screwed when you have to hire someone to fix something you can’t. But if something goes wrong after paying someone you hire you can at least get them back out to make it right.

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Make sure you compare “apples to apples”, meaning that make sure the part you found for $100 less is the exact same part, manufacture, etc.

If you call the Chevy dealership and ask them for a fuel pump, it is $400. Call NAPA and a fuel pump is $100.

The difference: One is OEM, the other is a “remanufactured”.

Also, you do have to take into consideration that the repair man/company purchased the part, maintained that inventory in their truck, and gave you quick turn-around service when your furnance was in-op. It cost money to have inventory on hand, especially in a service vehicle.

If you would have chosen to sit in the cold for a day in order to get that other part for $100 less, you would have to pay tax, plus OVERNIGHT shipping to get it to your door, within one day.

If overnight shipping isn’t satisfactory, then you can have the part placed on an airplane and shipped direct for a fee, right to your door, courier. We did this in the medical field, when producing hip-implants. When the part was completed and sterilized, we threw it in a taxi, sent it on an airplane(yep, bought a ticket) and a taxi was waiting at the receiving airport, to deliver to the hospital.

(Now, you know why emergency rooms cost so much).

Sucks, but what are your options?
I don’t mean to belittle your post, just giving you the prespective on the other side of the fence, as I’ve been there many times.

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Car dealers are just as bad for markup. The online site I order my new gm parts from used to show what they charge and what the dealer charged. I could buy most parts online for 50% of what the dealer wanted, plus $10-15 in shipping.

But seeing that its a gas burning heating appliance, I wouldn’t complain about the price. The tech probably stayed to watch it run to make sure there weren’t other problems, like flame out or the possibility of a leaking heat exchanger that could eventually fill your house with CO

running a small company and one with 120 employees on a 12 million dollar budget isnt the same thing. try running one on a quarter million gross with trucks on the road. you absolutely got a decent fair price, and could easily have paid double. stop counting beans when you dont even see them all or recognize them. like i say 12 mil budget and 250k just is not comparable. not at all. mom and pop cannot compete with walmart on price, and walmart cannot compete with mom and pop on quality.

Pretty old thread to be dug out.