Parts Mark up help

[Dr.Dave]

Can anybody clear up the mark up on parts issue I'm having?And what about matrix?I,m using Napa and tracs I didn't know what to program the mark up to be.So I'm using lists but I'm seeing I'm having to drop the price to sell the job the list prices are wildly inflated.My book keeper sugested 30% mark up but on the 0-$5.00 I think I can mark it up more?Some input in this area is going to be a load off thanks

[CARMandP]

I attended an ATI training class last year and here is what they recommend. A little high for what my overhead is but its a good basis.

 

Dollar amount Multiply by: Parts Margin:

 

0-5 3.25 69.2%

5-10 2.50 60%

10-75 2.25 55%

75-150 2.00 50%

150-750 1.85 46%

750-up 1.54 35%

 

These multipliers are based off a Jobber purchase price.

 

My current numbers which I will be upping soon to help with the margins a little better.

 

Dollar Amount: Markup: Profit Margin:

 

0-5 75% 42.85%

5-10 65% 39.39%

10-75 60% 37.5%

75-150 55% 35.48%

150-750 50% 33.33%

750-up 40% 28.57%

[Joe Marconi]

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[Dr.Dave]

Using a matrix will allow you to reach your overall profit margin. Let me make a suggestion to speak with your accountant. While the industry standard on part percentage profit falls in the range from 46-52 percentages, every business is different. It’s a delicate balance between being profitable and being competitive. Too high and we can price ourselves out of business, too low and the same thing happens.

 

The main concept for a matrix is to sell parts that have a low acquisition cost at a higher list and parts that cost more will be sold at a lower list. Don’t get too caught up with suggested list from the parts house either, it’s just a guide.

The list price is just a guide ,which way high or low or no telling which way?Do you hope your matrix is higher or lower than list say on parts from cost $35 to $100? Or is there no certainty? And pick a solid matrix

[Joe Marconi]

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[Alex]

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