How To Set Your Prices
How to Set Your Prices: A Guide for Phone Repair Shops
Scour the web for information on how phone repair shops set their prices and you’ll be disappointed with the results - there’s just not much publicized advice out there on what to charge your customers for phone repairs. Are the repair techs hiding something? It’s no secret that anyone can easily find out phone repair profit margins with a little bit of research on the costs of replacement parts and the average cost of a repair. But how do repair shops set their prices? We asked Ryan Galvan, owner of a phone repair shop in Pensacola, Florida in an impromptu interview, how he goes about pricing his repairs.
“Part pricing can be very tricky,” says Ryan. “I’ve seen iPhone parts almost triple in 2014, but since then, prices can be fairly predictable. However, when a new phone comes out, especially the non “S” models [iPhone], we see a huge price hike for that new part. For example, when the iPhone 6 and 6+ came out, shortly after, parts were $400-500 dollars. We can assume this came from OEMs (Original Equipment Manufacturers) pulling from original phones or phones bought in China that are disassembled and their parts sold for more than the price of the phone. After that initial price increase, we typically see the parts prices fall maybe $10-20 dollars a month.”
The China Factor
Donald Trump isn’t the only businessman who loves China. Phone repair shop owners and parts wholesalers rely heavily on companies in China who produce after-market phone replacement parts.
Ryan explains, “Eventually, China will figure out how to refurbish broken phone screens by cutting off the old glass, adhering new glass and selling them back to us. Most repair shops sell their broken glass back to China for this purpose. Finally, when China can copy the part, we really see the part prices plummet. Copy parts can be either really crappy or nearly perfect. I have seen everything in between, but when we get a copied part, that is when we fix the most, usually a year after the phone is released. We typically won’t fix the newest phone until about a year or so, maybe 10 months after it is released. The newness wears off, customers may take them out of the case, they start breaking them, and prices are just affordable enough for people to start fixing them. Then, two years out, prices are usually below $50, and we fix a plethora of them a day.”
How Prices Are Set
Most phone repair shops aren’t making money off “reselling” a replacement part - all of their repair revenue comes from labor costs. Repair shops are able to charge what can sometimes seem like a ridiculous price for a repair job because it takes years of experience and a practiced hand to handle these delicate pieces of technology.
A typical pricing method for device repairs:
Phone Repairs: cost of the part + $50-$60 for labor
Tablet Repairs: cost of the part + $70-$80 for labor
Special Orders: cost of the part + $60 flat labor fee
If you’re a repair shop using this pricing method, what your customer ends up paying will rely on how much your replacement parts cost. This is where eTech Parts Plus comes into the picture, as well as other suppliers in the industry. eTech prides itself on providing the highest quality parts at the most competitive rates. With eTech Parts Plus also offering a lifetime warranty on ALL parts, you will also be able to pass on this peace of mind to your customers.