Inventory Price Level Calc Setup
Overview
The Inventory Price Level Calc Setup is the table that defines price level margins from selected sell price levels. The margins can be entered manually by the user or automatically calculated with the utility from the pricing information that already exists.
SETUP PROCESS
The Inventory Price Level Calc Setup is found by clicking:
File | Inventory Maintenance | Inventory Price Level Calc Setup
Please Note: Users can define pricing calculations by MFG code only, Pricing Category only, or MFG and Part Number.
MFG: 3-character Manufacturer Code. If a MFG is not defined, the field must be populated with ***.
Partnum: part number (this part number must match the part number defined in Inventory). If a part number is not defined, the field must be populated with ***.
Price Category: Enter a pricing category that will be used for discounts. This is used for users who would like to define discounts by part group (maintaining price margins for all FILTERS, for instance) instead of entering a MFG and or Part Num. Pricing categories are defined in the Xref table by going to Tools/System Setup/Xref Field Setup/Pricing Category 1. If a price category is not defined, the field must be populated with ***.
Sell Level: choose the price level that will be receiving the calculation. For example, if List = Cost + 50% margin, the Sell Level is LIST.
Low Amount: If users choose to use a more general setup (creating a record for all parts within a MFG line or all parts within a Pricing Category) the low amount can be used to include all parts within a certain price level. For example, users might want to setup a price calc that states “maintain a 50% margin up from COST for all parts where COST is between $5.00 and $9.99. The Low Amount in this example is $5.00.
High Amount: If users choose to use a more general setup (creating a record for all parts within a MFG line or all parts within a Pricing Category) the high amount can be used to include all parts within a certain price level. For example, users might want to setup a price calc that states “maintain a 50% margin up from COST for all parts where COST is between $5.00 and $9.99. The High Amount in this example is $9.99.
Percentage: Enter the percentage to maintain between the Sell Level and the From Level.
From Level: Select the price level from which the price margin is calculated. For the above example of List = Cost + 50%, the From Level is COST.
The Difference Between
“MARKUP” & “GROSS PROFIT”
Did you know that a markup of 35% only gives you a gross profit of 26%?
How many times a day do you or your counterpersons mark something up from cost X% thinking that’s what you will make?
The problem is that simple markups are easy to do in your head, but gross margin calculations are more difficult.
A. SIMPLE MARKUP SELLING PRICE=
OF X% COST PRICE + (X% x COST PRICE)
B. MARKUP TO GET A SELLING PRICE=
SPECIFIC GROSS COST PRICE / (1 - X%)
MARGIN (X%)
The table on the next page shows what percentage you must markup to achieve the gross margin you want. If you use this table, you can do the easy calculations (A. above) and make the right grosses!
PROFIT MARGIN TABLE
TO GROSS MARKUP TO GROSS MARKUP
20.00% 25.00% 50.00% 100.00%
21.00% 26.58% 51.00% 104.08%
22.00% 28.21% 52.00% 108.33%
23.00% 29.87% 53.00% 112.77%
24.00% 31.58% 54.00% 117.39%
25.00% 33.33% 55.00% 122.22%
26.00% 35.14% 56.00% 127.27%
27.00% 36.99% 57.00% 132.56%
28.00% 38.89% 58.00% 138.10%
29.00% 40.85% 59.00% 143.90%
30.00% 42.86% 60.00% 150.00 %
31.00% 44.93% 61.00% 156.41%
32.00% 47.06% 62.00% 163.16%
33.00% 49.25% 63.00% 170.27%
34.00% 51.52% 64.00% 177.78%
35.00% 53.85% 65.00% 185.71%
36.00% 56.25% 66.00% 194.12%
37.00% 58.73% 67.00% 203.03%
38.00% 61.29% 68.00% 212.50%
39.00% 63.93% 69.00% 222.58%
40.00% 66.67% 70.00% 233.33%
41.00% 69.49% 71.00% 244.83%
42.00% 72.41% 72.00% 257.14%
43.00% 75.44% 73.00% 270.37%
44.00% 73.57% 74.00% 284.62%
45.00% 81.82% 75.00% 300.00%
46.00% 85.19%
47.00% 88.68%
48.00% 92.31%
49.00% 96.08%
See also