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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

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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%

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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.

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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

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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

 

Great question…and the best answer is….it depends on the list price. Different companies may have different list prices and that’s why the list price should only be used as a guide, not the written word of God.

 

Unfortunately when a customer calls around parts houses or the dealer, they are going to give that customer their list price, which may have an impact on what your price is. BUT, I would NOT change my policy based on the handful of people that may call and question.

 

I know what I need to be profitable and at the same time, competitive. That is a delicate balance. Sometimes I rather sell at very attractive price for some items to move product during a State Inspection or LOF; items like, wipers, air filters, cabin filters, belts, etc. For these items I price them very attractive to increase added on sales. However, if I need to sell an engine mount or fuel injection relay, then those would be sold above list because these items are not price sensitive in the eyes of the customer.

 

I hope I am clearing things up for you. This is a very complicated issue, as you can see.

Please let me know if you have any additional questions or thoughts…

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