Tips and Tricks for Setting Up Upfront Pricing Formulas in CollisionLink

KB Article #6363

CollisionLink's Upfront Pricing allows you to set up pricing three ways:

1. Non-OE List Price, minus a percentage
2. Dealer Cost, plus or minus a percentage
3. OE List Price, plus or minus a percentage

Although successful pricing strategies vary across markets, OEMs, part type, and individual dealers, below are common examples that can be referenced when defining your dealer's pricing strategy based on average U.S. pricing data:

• To create a Non-OE Estimate List Price formula for PMA-eligible parts...
• To create a Dealer Cost price formula for PMA-eligible parts...
• To create a Dealer Cost price formula for non-PMA-eligible parts...

Once you have created your Upfront Pricing formulas, you can apply them to the CollisionLink default trading partner.

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Creating a Non-OE Estimate List Price Formula for parts eligible for OEM reimbursement (PMA Eligible):

• On average, OE conversion parts eligible for OEM reimbursement sell 25% below the Non-OE List Price. Note: Please refer to your OEM for specific details, as some OEMs allow for more aggressive pricing options.
• Creating an upfront pricing formula of Non-OE List Price Minus 25% should allow you to be competitive. Note: Some shops receive larger discounts from their vendors and may require a more aggressive discount. (Click here for more information on creating upfront pricing formulas.)
  
• Setting a Minimum Markup % will ensure your Upfront Pricing Formula does not lead to selling parts at a loss. Setting your Minimum Markup % to Cost minus 5% should lead to an acceptable return once the OEM's reimbursement is factored into the total selling price, but this needs to be reviewed based on your OEM and dealer's business rules.
  
• Example: (Non-OE Estimate List Price, minus 25%) / -5% Minimum Markup percentage.
  • Using the formula above and a dealer cost of $100 for the OE part, the shop will see:
    
  • $120 - 25% = $90. With a Minimum Markup % of -5%, the displayed Upfront Price is $95.

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Creating a Dealer Cost Plus or Minus formula for parts eligible for OEM reimbursement (PMA Eligible):

• On average, OE conversion parts eligible for OEM reimbursement sell to shops at Dealer Cost -5%. Note: Please refer to your OEM-specific details, as some OEMs allow for more aggressive pricing options.
• Creating an upfront pricing formula of Dealer Cost -5% should lead to an acceptable return once the OEM's reimbursement is factored into the total selling price. Note: This needs to be reviewed based on your dealer's business rules. (Click here for more information on creating upfront pricing formulas.)
  
• Example: Dealer Cost -5%.
  • Using the formula above and a dealer cost of $100 for the OE part, the shop will see:
    
  • This image from the previous example also works for this pricing formula, as dealer cost is $100.

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Creating a Dealer Cost Plus or Minus formula for parts not eligible for OEM reimbursement (Non-PMA Eligible):

• A major benefit of CollisionLink is that dealers see 100% of the estimate on every CollisionLink order, and many dealers are very successful at converting not just OEM program parts but also non-OEM program parts to OE part sales.
• On average, parts not eligible for OEM reimbursement sell to shops about 10% above dealer cost.
• Creating a Dealer Cost +10% upfront pricing formula, or even a slightly more aggressive pricing one, should lead to an acceptable return. Note: This needs to be reviewed based on your dealer's business rules. (Click here for more information on creating upfront pricing formulas.)
  
• Example: Dealer Cost +10%.
  • Using the formula above and the dealer cost of $175 in this real-life example, the shop will see:
    
  • $175 +10% = $192.50