{"id":4480,"date":"2024-03-25T20:15:31","date_gmt":"2024-03-25T20:15:31","guid":{"rendered":"https:\/\/partstech.com\/?page_id=4480"},"modified":"2025-10-06T13:41:21","modified_gmt":"2025-10-06T13:41:21","slug":"parts-markup-matrix","status":"publish","type":"page","link":"https:\/\/partstech.com\/parts-markup-matrix\/","title":{"rendered":"Parts Markup Matrix"},"content":{"rendered":"\n
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Parts markup guide for
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Are you losing profit due to improper parts markups and margins?<\/p>\n <\/div>\n\n<\/div>\n\n\n

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Many auto shops leave between $40,000<\/em> and $70,000<\/em> per year on the table due to insufficient parts markup practices.<\/h2>\n <\/div>\n
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Cecil Bullard, Owner and CEO, The Institute for Automotive Business Excellence<\/p>\n <\/div>\n <\/div>\n <\/div>\n <\/div>\n <\/div>\n<\/div>\n\n\n

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67% of shops leave money on the table when it comes to gross profit on parts.<\/h2>\n <\/div>\n <\/div>\n
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Is your auto repair business leaving profit on the table due to improper parts markups and margins? A recent PartsTech survey of 618 auto repair shop owners and managers across the U.S. found that 67% are missing out on significant profits due to insufficient markup practices \u2014 potentially costing shops between $40,000 and $70,000 annually. This guide, created in collaboration with The Institute for Automotive Business Excellence<\/a>,<\/strong> will help your shop increase profits by implementing a parts markup strategy and matrix.<\/p>\n <\/div>\n <\/div>\n <\/div>\n <\/div>\n <\/div>\n <\/div>\n<\/div>\n\n\n

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Parts markup matrix – what is it?<\/h3>\n
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A parts markup matrix is a strategy-based formula for pricing parts. It guides the markup on purchased parts to ensure a healthy profit margin on every repair order. It typically applies higher markups on lower-cost parts and lower markups on higher-cost parts to achieve a targeted overall margin.<\/p>\n <\/div>\n <\/div> \n <\/div>\n

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Why a parts matrix is a must-have?<\/h3>\n
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Implementing a customized parts markup matrix is essential for profit, as standard list prices or flat markups won’t achieve healthy margins. This strategy ensures prices align with your services, protecting margins and enhancing profitability.<\/p>\n <\/div>\n <\/div> \n <\/div>\n <\/div>\n <\/div>\n<\/div>\n\n\n

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Benchmark matrix by part cost<\/h2>\n

This is a sample matrix from The Institute for Automotive Business Excellence that you can use as a starting point to mark up your parts. Use the strategy guide below this matrix for tips to adjust it based on your unique shop.<\/p>\n <\/div>\n <\/div>\n <\/div>\n <\/div>\n <\/div>\n<\/div>\n\n\n\n

Part Cost<\/th>Markup Multiplier<\/th>Approximate Profit %<\/th><\/tr><\/thead>
$0 to $2.50<\/td>X 4.00<\/td>75.0% Profit<\/td><\/tr>
$2.50 to $5.00<\/td>X 3.75<\/td>73.3% Profit<\/td><\/tr>
$5.01 to $10.00<\/td>X 3.00<\/td>66.7% Profit<\/td><\/tr>
$10.01 to $50.00<\/td>X 2.75<\/td>63.6% Profit<\/td><\/tr>
$50.01 to $100.00<\/td>X 2.50<\/td>60.0% Profit<\/td><\/tr>
$100.01 to $150.00<\/td>X 2.20<\/td>54.5% Profit<\/td><\/tr>
$150.01 and $200.00<\/td>X 2.00<\/td>50.0% Profit<\/td><\/tr>
$200.01 and 500.00<\/td>X 1.85<\/td>46.0% Profit<\/td><\/tr>
$500.01 and Up<\/td>X 1.70<\/td>41.1% Profit<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n
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Experience a parts matrix in action<\/h2>\n <\/div>\n \n

Change the markup multipliers in the sample parts matrix below to see how gross profit is impacted
in real-time within the mock shopping cart<\/p>\n \n