In speaking with various parts managers from across the country, a topic that seems to be of particular interest lately is the use of a wholesale pricing matrix
but be careful. If you are considering setting up a matrix, the dilemma you face is determining how much profit to build without losing customers due to sticker shock.
For parts managers that look to the wholesale business to buoy sales, this is not an inconsequential consideration.
Here's what the pros are saying on the Parts Managers' Forum at www.dealersedge.com:
"I have seen a local dealer completely cut their wholesale discounts to 15 percent off list, lose a few customers, but gain it all back on the resulting gross profit" said one manager.
Another manager took a different perspective stating "You do get your occasional price shopper, but the key for most independent shops is whether you have the part and how quickly can you get it to them."
Parts Manager editor Chuck Hartlé is never without an opinion on this issue. He notes, "I remember a shop owner calling me and telling me my prices were too high. But two things that kept him buying from us: 1) we had the part, and 2) he took the cost of any parts purchased and divided by the reciprocal of .60 to make a 40% gross profit regardless of dealer discounts and pricing."
Remember this: dealership parts managers are not running a charity to help subsidize the independent competition. Build your pricing matrix with the goal of maximizing cash flow. Wholesale customers who won't pay the price need to find another supplier. In the end you'll be better off and so will your dealer's ROI.