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Why We Should Use a Matrix Pricing System
The matrix is designed to improve gross profit
margins. The best matrix will begin with very high
margins with lower cost items and reduce gradually
as prices increase. I have been asked why a matrix is
fair when it charges more then suggested retail. The
cost of operation in the parts department continues
to move higher and has many taxes to pay. If you
took cost of operation and divided into how many
part numbers were sold this would give you a cost
per part. You will find that we must make large
margins to offset these costs on lower priced items.
Even with lower priced parts they still need checked
in, put up, inventoried, property tax paid, looked up,
and billed out. It is not wise to use the matrix on
competitive items such as air filters and wiper blades.
Body shops will never provide a source for matrix
pricing. It is recommended however to use the matrix
on over the counter sales.
Find out more....
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Greetings!
This month let’s look at the parts department for a
few ways to improve profits.
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| Do You Have an Employee Purchase Policy For Parts? |
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Many dealerships are lacking a solid well defined
employee purchase policy. This is a needed policy do
to many Technicians buying parts for their side work
at home. Then they receive extra margins on parts
for work the dealership might have done. Many times
I have seen Technicians even taking dealership
equipment home to complete repairs. The wise
dealership sets a strong policy and reviews it for
compliance. Another item to look for is low gross
sales to friends over the counter sales. Check
counterman productivity reports looking for low gross
items.
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Read on... |
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| Does Your Dealership Check in Cash Returns From Parts? |
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It is a must for cash credits to be checked and
signed off on by Management to confirm as an
incoming shipment. This will prevent a large loop hole
that your staff could write a credit, take the cash
and have the drawer balance.
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Read on... |
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| Look For Rob's Artical in This Months Fixed Ops Magizine! |
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The February issue of Fixed Ops Magazine has Rob
featured. Look for it on page 34.
Learn More
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