KB Article #786
With Gross Profit Protection (GPP) enabled, dealers can ensure that parts are sold with a minimum profit above cost--protecting your profit goals.
Examples:
In this example, a part is offered to a customer at a list minus 25% discount. Without Gross Profit Protection, a dealer would lose money on the sale:
|
List Price |
Dealer Cost |
Sale Price (Net Buyer Cost) |
Profit Margin |
| $1,375.00 | $1,250.00 | $1,031.25 | -$218.75 |
Using this example, the formula would be: $1375 (List) - $343.75 (Discount) = $1031.25 (Sale Price). With a Dealer Cost of $1250, this part would be sold at a loss: $1031.25 - $1250 = $-218.75.
With Gross Profit Protection enabled, RepairLink works behind the scenes to allow a dealer to maintain a specific margin above cost. In this example, the dealer has set the Gross Profit Protection to 5%:
|
List Price |
Dealer Cost |
Sale Price (Net Buyer Cost) |
Profit Margin |
| $1,375.00 | $1,250.00 | $1,315.79 | $65.79 |
Gross Profit Protection is calculated as: Sale Price (Net Buyer Cost) = Dealer Cost/[1-(GPP% Rate)]. Note: If a RepairLink dealer has Gross Profit Protection enabled and is also using DMS Connect, Gross Profit Protection is bypassed within RepairLink. (The dealer's DMS pricing takes priority over RepairLink.)
Using the example above, the formula would be: $1250/(1-(.05)) = $1315.79. This part would be sold for a profit: $1315.79 - $1250 = $65.79.
Note: GPP will not raise the price above the list price.
Want to learn more? Watch our video!
To set up Gross Profit Protection:
- From the RepairLink tab, click Application Setup.
- Click Modify Pricing Formulas from the left-hand side.
- Select Modify Gross Profit Protection from the I want to drop-down.
- Under the Gross Profit Protection section, click the Enabled option.
- Type your minimum profit margin in the Rate % field. (Values are limited to two decimal places. Zero and negative numbers are not allowed.)
- Click Save to complete the process.