Pricing Parts Technician Third Period Procurement 270302d.

Pricing

Parts Technician

Third Period

Procurement

270302d

© 2012, Her Majesty the Queen in right of the Province of Alberta

NOTE

The dealer should start using the new price list on its effective date.


Table 1 - Location code symbols.

Master Price and Part Number Reference

Part Number Suggested Retail Price

Suggested Trade Price

Dealer Price

D D7SZ 1xxx2 A H 1.60 1.28 0.82 D D8BZ 1xxx2 A H 1.45 1.16 0.83 D D8TZ 1xxx2 A H 1.45 1.16 0.83

S D9ZZ 1xxx2 A H 1.50 1.20 0.86 A E0VY 1xxx2 A 2.50 2.00 1.43 B E0VY 1xxx2 B 3.40 2.72 1.94 V C9LY 1xxxx3 B H 62.75 50.20 35.77

D0MY 1xxxx3 A H 12.20 9.76 6.95 D2LY 1xxxx3 A H 13.70 10.96 7.81 D3LY 1xxxx3 A H 13.70 10.96 7.81 CC6MY 1xxx5 A H 56.30 45.04 32.09

NOTE: A - Not stocked in Canada S - Stocked at selected depots B - Stocked in Bramalea Depot only V - Not stocked in Canadian depots D - Stocked in all depots Supplied direct from vendor or via

Bramalea Depot


Table 2 - This price list setup uses "List, User and Dealer" price breakdowns.

No. List Trade Dealer No. List Trade Dealer

5xx8 3.08 2.62 2.05 5xx2 20.94 17.80 13.94 5xx9 6.55 5.57 4.36 5xx3 22.40 19.04 14.92 5xx3B 13.48 11.46 8.98 5xx4 13.69 11.63 9.12 5xx5C 14.81 12.59 9.87 5xx7A 14.02 11.92 9.34 5xx6C 13.60 11.56 9.06 5xx8C 17.66 15.01 11.78 5xx7D 17.99 15.29 11.98 5xx9B 32.96 28.01 21.95 5xx8D 16.32 13.87 10.87 5xx0A 13.80 11.73 9.19 5xx0C 12.67 10.77 8.45 5xx1A 13.28 11.29 8.85 5xx1B 16.57 14.08 11.03 5xx2B 28.81 24.50 19.19 5xx2B 16.55 14.06 11.02 5xx3B 16.41 13.95 10.93 5xx4 18.73 15.92 12.47 5xx4 12.36 10.51 8.23 5xx8A 13.66 11.62 9.10 5xx6A 15.93 13.54 10.62 5xx0C 15.11 12.84 10.06 5xx7 10.94 9.30 7.29 5xx1E 20.19 17.16 13.45 5xx8 2.70 2.30 1.80


NOTE

Insurance companies will not allow you to charge them any other price than the published MSRP.


NOTE

Remember that the marketplace sets the pricing level and always keep in mind whether customers will be willing to pay what you are asking.


NOTE

Cost prices are considered to be confidential company information and should never be revealed to your customer.


NOTE

Manufacturer's retail and trade prices are only suggested prices.


Figure 1 - Vending machine. (Photographed at Fastenal Canada)


Figure 2 - Currency exchange.


Figure 3 - Border crossing.


NOTE

Check Canada Post for current processing fee pricing for packages entering Canada.


NOTE

When calculating your landed cost you do not include the GST. GST is added to the selling price, thus recouping any GST you where charged.


Figure 4 - Freight delivery. (Photographed at The Calgary Airport Authority)


CAUTION

Discounts are the single largest drain on profit. The customer's account must be analyzed to determine the amount of profit actually being made.


Table 3 - Pricing matrix.

Pricing Matrix

Enter Cost Here

*Markup on Cost

*Markup on Selling Price

Retail Price

0.00 - 0.99 $0.89 150% 60% $2.23

1.00 - 1.99 $1.69 145% 59% $4.14

2.00 - 2.99 $2.25 140% 58% $5.40

3.00 - 4.99 $4.75 130% 57% $10.93

5.00 - 9.99 $8.20 120% 55% $18.04

10.00 - 14.99 $13.99 110% 52% $29.38

15.00 - 19.99 $17.85 100% 50% $35.70

20.00 - 39.99 $34.25 90% 47% $65.08

40.00 - 99.99 $69.75 80% 44% $125.55

100.00 - 499.99 357.98 70% 41% $608.57

500.00 - 749.00 $669.12 60% 38% $1,070.59

750.00 - 999.99 $912.49 50% 33% $1,368.74

1000.00 + $2,264.85 40% 29% $3,170.79

* Due to the markups being rounded to a whole number, calculations may result in a slightly different retail price.


NOTE

Use a markup on cost when adding GST to an invoice.


Figure 5 - Cost markup used to calculate landed cost.


Figure 6 - Chain or consecutive markup on cost.


Table 4 - Markups.

Question 1 Question 2 Question 3 Question 4

Landed cost $895.49 $62.15 $9.69 $249.00

Cost price $615.00 $49.95 $5.25 $175.00

$ Markup a) a) a) a)

% Markup b) b) b) b)


Figure 7 - Retail parts counter.


Table 5 - Markup on selling price.

$1,000,000.00 (Landed Cost)

Markup on Selling Price

Selling Price Gross Profit Difference Accumulated

20% $ 1,250,000.00 $ 250,000.00

21% $ 1,265,823.00 $ 265,823.00 $ 15,823.00

22% $ 1,282,051.00 $ 282,051.00 $ 16,228.00 $ 32,051.00

23% $ 1,298,701.00 $ 298,701.00 $ 16,650.00 $ 48,701.00

24% $ 1,315,789.00 $ 315,789.00 $ 17,088.00 $ 65,789.00

25% $ 1,333,333.00 $ 333,333.00 $ 17,544.00 $ 83,333.00

26% $ 1,351,351.00 $ 351,351.00 $ 18,018.00 $ 101,351.00

27% $ 1,369,863.00 $ 369,863.00 $ 18,512.00 $ 119,863.00

28% $ 1,388,889.00 $ 388,889.00 $ 19,026.00 $ 138,889.00

29% $ 1,408,451.00 $ 408,451.00 $ 19,562.00 $ 158,451.00

30% $ 1,428,571.00 $ 428,571.00 $ 20,121.00 $ 178,571.00

31% $ 1,449,275.00 $ 449,275.00 $ 20,704.00 $ 199,275.00

32% $ 1,470,588.00 $ 470,588.00 $ 21,313.00 $ 220,588.00

33% $ 1,492,537.00 $ 492,537.00 $ 21,949.00 $ 242,537.00

34% $ 1,515,152.00 $ 515,152.00 $ 22,614.00 $ 265,152.00

35% $ 1,538,462.00 $ 538,462.00 $ 23,310.00 $ 288,462.00

36% $ 1,562,500.00 $ 562,500.00 $ 24,038.00 $ 312,500.00

37% $ 1,587,302.00 $ 587,302.00 $ 24,802.00 $ 337,302.00

38% $ 1,612,903.00 $ 612,903.00 $ 25,602.00 $ 362,903.00

39% $ 1,639,344.00 $ 639,344.00 $ 26,441.00 $ 389,344.00

40% $ 1,666,667.00 $ 666,667.00 $ 27,322.00 $ 416,667.00

The difference in profit between 20% and 30% is $178,571.00. The difference in profit between 20% and 24% is $65,789.00.


Figure 8 - Discounted invoice.


NOTE

You calculate the discounts in steps, one after the other. You do not add all the discount percentages together.


Figure 9 - Invoice showing consecutive discounts.


Figure 10 - Chain or consecutive discounts.


Table 6 - Sales and pieces handled.

Discount Sales Gross Profit

Margin Items Handled Profit

0% $1,000,000.00 30% 100 000 $300,000.00

5% $1,140,000.00 26.3% 120 000 $300,000.00

10% $1,350,000.00 22.2% 150 000 $300,000.00

15% $1,700,000.00 17.6% 200 000 $300,000.00

20% $2,400,000.00 12.5% 300 000 $300,000.00


Figure 11 - Negotiations.


Table 7 - Gross profit margin on $1,500,000 in sales.

$1,500,000.00 (Sales)

Gross Profit Margin

Gross Profit Difference Accumulated

20% $ 300,000.00

21% $ 315,000.00 $ 15,000.00

22% $ 330,000.00 $ 15,000.00 $ 30,000.00

23% $ 345,000.00 $ 15,000.00 $ 45,000.00

24% $ 360,000.00 $ 15,000.00 $ 60,000.00

25% $ 375,000.00 $ 15,000.00 $ 75,000.00

26% $ 390,000.00 $ 15,000.00 $ 90,000.00

27% $ 405,000.00 $ 15,000.00 $ 105,000.00

28% $ 420,000.00 $ 15,000.00 $ 120,000.00

29% $ 435,000.00 $ 15,000.00 $ 135,000.00

30% $ 450,000.00 $ 15,000.00 $ 150,000.00

31% $ 465,000.00 $ 15,000.00 $ 165,000.00

32% $ 480,000.00 $ 15,000.00 $ 180,000.00

33% $ 495,000.00 $ 15,000.00 $ 195,000.00

34% $ 510,000.00 $ 15,000.00 $ 210,000.00

35% $ 525,000.00 $ 15,000.00 $ 225,000.00

36% $ 540,000.00 $ 15,000.00 $ 240,000.00

37% $ 555,000.00 $ 15,000.00 $ 255,000.00

38% $ 570,000.00 $ 15,000.00 $ 270,000.00

39% $ 585,000.00 $ 15,000.00 $ 285,000.00

40% $ 600,000.00 $ 15,000.00 $ 300,000.00

The difference in profit between 20% and 30% is $150,000.00. The difference in profit between 20% and 24% is $60,000.00. In this example for every 1% increase in profit margin equals $15,000.00 increase in gross profit.

Pricing Parts Technician Third Period Procurement 270302d.

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