Most dealerships have used some form of a matrix pricing program to increase gross profit margins. Many matrixes were put in place years ago without consideration to current market trends. The matrix was designed off of cost with lower-priced items times up to 400% above. Higher priced items were tiered lower yet retained excessive margins. My belief is matrix pricing is justified in today's market and can be put in to place without killing a customer. The justification for matrix pricing comes from the understanding each part transaction carries is a cost. If the parts department took their total cost of operation and divided by the number parts moved in a month they would determine their average cost per transaction. This cost would be the same if an item is sold for $500 or only five dollars. So it is wise to understand gross profit margin need to be larger on lower-priced items. The matrix I am recommending to my customers currently is based on list plus. It should start at list plus 40% and decline down to 3% for higher price items. Competitive items should never have a matrix such as filters, wiper blades, and brake pads. $1-5 list plus 40%. $6-10 list plus 30%. 11-25 list plus 20%. $26-40 list plus 10%. $41-150 list plus 5%. $151-500 list plus 3%. The goal in a reasonable matrix is to stop over rides in pricing. A matrix does no good if continually overridden by the parts department staff.