Parts Pricing Matrix

We seek to create value by balancing two conflicting demands;

¨ Selling at the lowest reasonable cost to our customer;

¨ Creating the most reasonable profitability for the shop

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How we Can Create Value and resolve the conflicting demands:

· Shop the parts thoroughly and buy parts at the best price.

· Use a sales “anchor”

· Offer the customer choices when they exist

What kind of choices we can offer:

1. Time versus money- cheaper tomorrow than today.

2. Quality versus cost.

Note: Unless told otherwise, customers believe we are using the best quality part. Never let them believe otherwise unless you told them it was going to be a lesser quality part!

53% Gross Profit Pricing Matrix

From To Markup Multiplier

What about list price?

The more expensive the job, the more likely the customer is pick up the phone and call around. Generally in the lower price ranges we can get away with 10-15% above list. Above 200.00 the selling price must get lower. $10-$20 above is about as far as we should go.

It better to get the job at a slightly lower profit than to not get the job and be thought of as “to expensive”