DealersEdge Professional Forums

i used to have a table that had all of the calulations for the gross profit percent you made. ie cost of part is $35.00 and i wanted to make 40,50,60,30,20,10, etc gross profit. do anyone have the formula?

35.00 x 1.67 = 58.45 sale price to get 40% gross.

i wish i could find my table....still looking.


turbo59

Here is an easier way without needing a table of pricing variables. Also, it works easily with any amount and all you really need is a basic calculator.

Just divide your product cost by the opposite (cost compliment), expressed as a decimal value, of your desired gross margin amount. The result is the list or desired selling price.

For example, a 40% gross margin on a part with a cost of $15.75 is calculated as follows:

$15.75 divided by .60 = $26.25

If you wanted to calculate a 33% gross margin on the same part it is done the same way.

$15.75 divided by .67 = $23.50

Gary J Naples
FREELANCE ASSOCIATES, INC.

Here's a quick way to see what effect a price escaltor has on your parts.

In ADP, go into MSSO (setup sources).
1. Enter a source and answer Y to escaltors.
2. In the price6 - price10 fields, put in your escalated amount (cost + 40)
3. Go into ENG or RPG and run a simple english statement - such as
LIST PART-NO. COST PRICE6 LIST WITH SO = "100"

Couple of points.
1 Try not to use price6-10 fields that are used in cost-break-escalators (PBE)
2 When done, go back into MSSO and remove escaltor by typing NONE in the formula

Dale

Gary is showing you the recipicol way of getting gross profit which is the way we look at it. Since just about every mfg has a suggested list price that has a 40% gross profit margin, this would be calculated by

10.00 divided by .60 = $16.67 for a 40% profit margin. Some mfg's will round it up to $16.70 or $16.75.

For the purposes of applying escalators, it would be simple to state that if you were to make a 40% gross profit margin on everything you sell, then you would simple state

Cost + 67.00 would equal "suggested retail" at a 40% profit margin.

Thus, if you were to escalate your sale price to

Cost + 75.00 you would be saying the same as
List + 8.00 or a 43% gross profit margin.

In the example above, your list price would be $17.50 instead of $16.67. You then would divide $7.50 profit into the $17.50 sale price to achieve the 43% gross profit margin.

Basically, the same as Gary is stating from a starting point of Cost + 67.00 equals mfg suggested list price.

Chuck Hartle'

[This message has been edited by Chuck Hartle (edited 11-18-2002).]

There is a chart in the GM Parts Department Operations Guide on Page 2-77 if you are a GM Dealer.

Sharp makes a great calculator called the Elismate EL-480S Business Calculator. All you need to do is input the cost, the requested margin and it will find the sell for you. You can also input sell and cost and find the margin, in other words, any two out of three variables.

Hi Turbo59,
I have a copy of said table. E-mail me at ralphc10@aol.com & I can send it to you.

Ralph

thanks everyone, your comments and examples has been very helpful.

turbo59

hello ralph,


i haven't received the table yet, just in case the email didn't work..send to my fax number #413-825-1073


thanks
turbo59