Seven Ways to Protect Profits
- Overall Price Adjustment. Adjust you price across the board. You can use a percent (e.g., 5%) or dollars (e.g., $500).
- Overall Job Costs. Add a recommended job cost (e.g., $500) to Install Manager Pro. As a recommended item has the advantage (disadvantage) that it can be turned off at the point of sale.
- Brand (OEM). Adjust margin or markup (e.g., 5%) for “at risk” brands.
- Type (e.g., AC, Coil) Adjust margin or markup (e.g., 5%) for “at risk” equipment.
- Labor. Adjust margin or markup on your labor rate.
- Install Kits. Adjust dollars to your install kits where appropriate.
- Keep Your Pricing Up to date. Re-import distributor cost files on a quarterly basis. Remember this doesn’t cover your inflation risk for the next 7 to 30-days – so consider one of the other methods as a backup plan to protect your profits
To protect profit margins from these fluctuations - We have several different ways to adjust pricing
Global Price Adjustment: Sales Builder Pro has a price adjustment option that affects all parts (materials?), labor, and equipment. This is best used when all costs are going up and is easy to adjust - This adjustment is applied to the after-margin total of equipment, labor, materials, and tax is calculated.
Price Adjustment to Category/Class/Manufacturer: If an adjustment is just needed to a category of products - it can be done with a pricing rule for the product category.
There are additional ways to adjust pricing - You can simply increase your total gross margin and it has the same effect as a Global Price Adjustment.
Any one of these methods will help account for fluctuations in price over a quarter. Updating your actual cost whenever there is a change is still certainly the best method and should be done whenever feasible - but with the frequent price fluctuations that have been a regular occurrence. A margin adjustment is very quick and will protect your profits.