GEM-CAR FAQ
Price Calculation Based on the Progressive Price Matrix
The use of a matrix is essential to generate better margins based on part categories and costs.
The progressive matrix was developed following a discussion with renowned coach Kelly Bennett.
Why a progressive vs. step matrix?
Simply to ensure that as your cost increases, so will your profits.
For example, a matrix of 0-10 with 50% margin and 10.01+ with 40
A 10 coin would be sold at $20,
while a 10.01 coin would sell for $16.68.
How do I activate the progressive matrix?
To activate the progressive matrix, go to Inventory > Price list > +New.
After assigning a name to the list, in the Info tab, click +New next to Products or services associated with this price list, to create the basic matrix.
In the Info tab, enter or confirm the following data:
- Price list
- Type
- Category
- Price type
- Price/Percentage
- Minimum price
- Maximum price
Click on Save and Close.
When you return to the previous page, click on Options, check the “progressive matrice” option. Then, click on Save.
If you want to know what this means, move your mouse over the words “progressive matrice” and a blue tooltip with explanations will appear.
Note: GEM-CAR changes the future, not the past.
Example of an advanced matrix:
How the progressive matrix is calculated:
- With the progressive matrix, the selling price is calculated by taking into account 2 price “tiers” for an item with a cost of $15.
- We look at the bracket the cost is in: we keep the margin in memory A (Bracket from 10.01 to 20.00 at 40% margin).
- We look at the previous tier we keep the margin in memory B we take the value at the end of the price tier: e.g. from 3 to 10.00 with a margin of 50%.
The price is then calculated
- 10$ at a margin of B ( ex 50% ) and 10.01 - 20.00 at a margin of A ( 40% )
The selling price with the progressive matrix will be
- 10 at a margin of B ( ex 50% ) = 10 / ( 1 - 0.5) = $20
- and 10.01 - 20.00 at a margin of A ( 40%) = 5 / (1- 0.40) = 8.33
- The selling price will then be $20 + $8.33 = $28.33
Without the progressive matrix, the price would have been = 15/(1-0.4) = $25.00
But what if we use a fixed price with extra $$?
Remember, the calculation is on 2 levels.
Posted
5 months
ago
by
Bianca da Silveira De Amorim
#1879
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Edited
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ago