Auto parts management software

Auto parts management software will report your margin, and the number it reports is usually the one off the price list rather than the one the counter actually took. This sheet works the real one. Enter your cost, the list price, the discount the counter really gives and the lines you sell in a week, and it returns the price actually charged, the gross profit on the line, the margin as a percent of that price, the markup on cost, and what the same line makes over a week and a year. On the worked example, $42 of cost against a $78 list with the usual 10% off sells at $70.20 for $28.20 of gross profit: a 40% margin and a 67% markup, and at 180 lines a week that is $5,076 a week and $263,952 a year. The gap between the 46% the price list implies and the 40% the counter takes is what the discount costs, and it is worth knowing before the next price review rather than after it.

The discount is the whole story

A $78 list on $42 of cost looks like a 46% margin. The 10% the counter actually gives makes the price $70.20 and the margin 40%. Six points of margin disappear between the price list and the till, and the sheet puts the two figures side by side.

Margin and markup are not the same number

The same line is a 40% margin and a 67% markup. Pricing off markup and reporting off margin is how a counter convinces itself it is making more than it is, so the sheet returns both from the same inputs.

What it is worth over a year

$28.20 a line at 180 lines a week is $5,076 a week and $263,952 a year. Scaling the line to the year is what makes a discount policy arguable: a point of margin is a number, not a feeling, and this is the number.