Since I have been in the Automotive Service Business for 32 years I feel qualified to answer this question. Any Business needs a profit margin to break even and then make a profit. The name of the game is to make the most in the least amount of time that the market will bear. A parts mark up is added to a labor charge based on a Flat rate, straight time basis ,or a contract price. A well run Business knows how much per hour profit is necessary to survive. If you cut out the parts then the labor will need to be raised to overcome the loss. As far as a Customer bringing their own parts, there is a huge warranty problem. I have actually used a Customers parts and had an immediate failure of the part at installation. The Customer then claims that it was not installed properly and his part is brand new and couldn't possibly be bad. If the part is clearly defective the Customer still balks at having to pay double labor to replace it again. Now to satisfy the Customer, you have to wait for the customer to take the part back to who knows where while you do the labor for free while the Service Bay is tied up with his car. All this inconvenience and profit loss just so the Customer can save some money on their car. If The Shop installs a part supplied by the Shop, there is no question as to who pays for the parts and labor. It is like buying an insurance policy on the repair. Put yourself in the Shop Owners position and you will understand. No Business is there to see how much money they can save the Customer. They are only interested in gaining repeat customers and making a good living by doing just that. If they don't make a profit, they will not be there long, nor will any Business.
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