The Inventory Markup Table List is used to manage inventory markup tables. An inventory markup table is one way of determining the retail price of invoice items. A default markup table, which we recommend you use, has been provided in the program. However, the program allows you to create as many inventory markup tables as you wish. These tables work independently of each other.
Conceptually, a markup table lists a range of defined wholesale costs along with an associated multiplier. Later, when setting up an invoice item, an estimated cost is entered for the item and a markup method (like a markup table) for the item can be selected. The program then locates the item’s estimated cost in the markup table, and uses the appropriate multiplier to determine a suggested retail price.
For example, let’s say a markup table includes a row having a wholesale price range of $0.00 (the lower bound) to $0.49 (the upper bound) with a multiplier of 6.0000. If an invoice item’s wholesale cost is $0.45 an it’s setup to use the markup table, it’s cost will be multiplied by 6.0000 to arrive at a suggested retail price of $2.70.
Wholesale Cost x Inventory Markup Table Multiplier = Retail Price
$0.45 x 6.0000 = $2.70
From the main menu, click Company | Inventory Markup Table.
- To create a new markup table, right click anywhere in the list and choose New Markup Table from the pop-up menu.
- To edit a markup table, right-click on it and choose Edit Markup Table from the pop-up menu.
- To delete a markup table, right-click on it and choose Delete Markup Table from the pop-up menu. Note: It may not always be possible to perform this action — inactivation may be more appropriate.
- To export whatever information is currently displayed in the list, right-click anywhere in the list and choose Export List from the pop-up menu.
Creating a New Inventory Markup Table
- Right-click anywhere in the Inventory Markup Table List and choose New Markup Table from the pop-up menu. The New Markup Table will appear.
- Enter a markup table “Name” in that field.
- To base the new markup table on the default markup table, click Menu | Load Default Markup Table (optional).
- In each row, enter/edit the desired Lower Bound, Upper Bound, and corresponding Markup. Click Save & Close when the markup table is complete.
Field and Button Definitions in the Markup Table Form
- Name – The particular name of the markup table. Example: “Markup Table: Special Pricing”.
- Row – This counter column keeps track of the number of rows in the markup table. It is not editable.
- Lower Bound – Enter the lowest wholesale price of the range being setup in that row.
- Upper Bound – Enter the highest wholesale price of the range being setup in that row.
- Multiplier – Enter the multiplier to use on any wholesale prices which fall in that row’s price range (between or equal to the lower and upper bound). The wholesale price times the multiplier for that row (range) determines the retail price for that invoice item.
- Last Revised – Displays the most recent revision date of a given markup table row.
- Save & Close – Saves the markup table and closes the form.
- Save & New – Saves the markup table and open a new blank form.
- Cancel – Exits the form without saving.
- Menu | Save – Manually saves the form without exiting.
- Menu | Clear Markup – Clears all data from the “Markup” column.
- Menu | Clear List – Clears all data from the entire form, except for the Name field.
- Menu | Load Default Markup Table – Loads the default, built-in markup table into the form.
- Inactive – Tick the Inactive checkbox to make the markup table inactive.
It is strongly recommended to not change the default table. If you must, seek professional advice or use a specific software program, such as Beyond Breakeven™, when determining what multipliers to use. Your CPA or financial consultant may be able to help you with these decisions.
We generally recommend that dealers discount certain “price sensitive” items within the flat rate system. Parts such as thermocouples, air-filters, and certain common types of thermostats can be easily identified at many local hardware stores by your customers. These parts also require a relatively low skill level to diagnose and install. Other more sophisticated components such as circuit boards, gas valves, and safety switches are much more difficult to locate for the average consumer, making price shopping highly difficult. Your customer could locate a thermocouple and perhaps even install it him or herself. However, your customer would have a great deal of trouble locating a circuit board. Even if they could, chances are that they would not know how to install it themselves. Seek to achieve higher profit margins on more complex parts, due in part to the fact that you are being paid for your technical expertise, not simply for stocking the part.
Service is the most difficult, most expensive and most nerve racking of all of the various services that your company provides. The reason is that service and repair work is usually the most labor-intensive work of all. Your market will always limit the amount that you may charge for labor (your labor rate). Inventory items are among the best ways to make a significant profit (15% to 30% net profit) on your service work.