Enjoying what you’re reading? Sign up now.

Subscribe
Search

How to Lift Parts Gross without an Increase in Sales

Article Highlights:

  • Change one setting to net $0.40 extra per part sold.
  • "For a medium-sized store ... that’s an extra $2,000 in profit per month."

Recently, we made an update to our ERA® Parts software that can help you quickly boost gross profit for your parts sales, with no extra work by you or your employees.

Earn More Gross by Rounding All Prices to $.99

When configured, the new enhancement—Parts Retail Markup—will take the price of any part and round it up so that it ends in $.99.

Why would you choose to do this?

Because it works. Several studies have shown that customers are more likely to purchase a product with a $.99 ending—called “odd pricing” in the research literature—instead of an even dollar amount.1

It’s also a pricing structure customers are used to. In almost any retail store you visit, many of the prices use the $.99 ending for most of their products.

$2,000: The Financial Impact of Parts Retail Markup

What financial impact might you see from rounding your parts prices up to the nearest $.99?

With Parts Retail Markup enabled, most dealerships will probably see an average lift in profit of about $0.40 per part sold, depending on your base pricing setup.

You can do the math for your own dealership, but for a medium-sized store selling 5,000 parts per month, that’s an extra $2,000 in profit per month, with no changes to your work processes or customer volume.

How It Works

Parts Retail Markup can be set up for every price level code by source. This allows you to apply the new pricing structure to retail customers while excluding wholesale customers and specific sources.

Here’s how to set it up:

  1. Go into 2565.
  2. Enter the price level you want to setup.
  3. Enter the line of the source you want to add retail markup.
  4. Press Enter until the cursor is in the RMO column and enter ‘Y’.
  5. Under the RMO AMT column, enter the amount you want parts to round up to.

Note: Anything over this amount will not be rounded. If you set to 0, prices will round to the next whole dollar.

  1. Repeat for each source.
  2. Enter an ‘E’ to save.

For help with retail pricing, please call the Technical Assistance Centre.

Share this Article

Product Planning, Parts Applications, Reynolds and Reynolds

Tim Wilson is a Product Planning manager for Parts applications at Reynolds and Reynolds.

Related Articles:

Now more than ever, customers are demanding outlets in your dealership to maintain a safe distance from employees and other customers. Having a self-service experience

It’s no secret 2020 upset many aspects of consumers’ day-to-day lives, leaving a general sense of unease. Between threats of job loss, shutdowns, and the

Implementing new technology into the dealership is important to stay relevant in our ever-changing world, but it’s easy to drown in the tips, advice, and

In times like these, making sure customers feel comfortable in your store is paramount to retaining business and driving revenue. But when making customers feel