Configure Part Markup and Pricing (Video)

Configure Part Markup and Pricing (Video)

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Introduction

This article and video provide a walkthrough on how managers can configure part markup and pricing in EMDECS.

Video Walkthrough

Click on the square at the bottom right-hand corner to view the video in full screen mode.



Detailed Walkthrough

Part Costing Methods

Before getting started with creating part markup contracts, it will help to have an understanding of the different costing and pricing methods that can be used in EMDECS.

When you sell parts through a counter sale or a repair order in EMDECS, the part sale prices are based either on a markup of the part purchase cost or using retail prices (either a fixed retail price or a markup/discount of the retail price).  The most common choice is to markup based on cost, as this ensures your part sales continue to be profitable when part purchase costs increase over time, and does not require manually maintaining retail prices for your parts in EMDECS.

Your EMDECS system will be set with a default costing method for new parts.  If you need to change your default costing method, please email us at help@brightorder.com, or call us at 1-888-205-8817, and ask to change your COSTINGMETHOD system parameter to the appropriate default for your business.  Individual parts can be set to a different costing method from the part settings screen (Parts menu → Part Master → search for and click on a part number and select the Costs & Pricing tab).

The following markup costing methods are available in EMDECS:
  1. Average :  Part price is marked up based on the mean average part cost. 
  2. Standard :  Part price is marked up based on a standard cost.  The part cost and price will not change over time unless you manually update the standard cost, by updating individual parts, importing an updated parts price list, or using the Monitor & Update Standard Costs tool (see section titled "Monitor & Update Standard Costs " ).
  3. Last :  Part price is marked up based on your last or most recent purchase cost of the part.
  4. Landed :  Part price is marked up based on your last or most recent purchase of the part, including any added costs when the part is received and invoiced, such as freight fees.  Add on costs are divided between all parts received on the purchase invoice.
  5. Average Landed :  Part price is marked up based on the mean average part average cost, including any added costs when the part is received and invoiced, such as freight fees.  Add on costs are divided between all parts received on the purchase invoice.

The Retail Markup % and Retail Price fields are only applicable when a discount contract is used (this is explained further in the Parts Contract Wizard section).  Entering a retail price or a retail markup percentage will not affect the price of parts when a cost markup contract is used.  If you are using discount contracts, the discount is applied to the retail price.  If you select the "Use Retail Markup %" option, this will add a markup on top of the retail price instead of discounting the retail price.


If you have multiple inventory warehouses, you may see differences between the company costs in the top panel and the warehouse costs in the middle panel.  This depends on whether you have us enable a "cost by warehouse" system parameter in your EMDECS system.  If cost by warehouse is enabled, each of your inventory warehouses will keep track of its own purchase cost history.

If cost by warehouse is enabled, and you want to import part costs in bulk, you must use the Import Parts Location Details tab from the Part Master screen to upload different costs for each of your warehouses.  The Import Parts tab only updates the company costs.  Our customer experience team can assist you with changes to your cost by warehouse system setting (system parameter USE_WAREHOUSE_COST can be set to Y or N).

Change Costing Method In Bulk

The Things To Do list on the left-hand side of the Part Master screen contains tools for bulk changes to part cost and pricing settings.  If you need to make bulk changes to the costing method of parts or groups of parts in EMDECS, click on the Change Costing Method In Bulk link.


Using the filters at the top of the screen, you can select From and To part numbers to generate an alphabetic listing of parts.  You can also narrow down your results by product group or markup group.  There are also radio buttons for selecting active parts and stock parts.  If you leave all the fields blank, the system will generate a list of all of your parts.  Once you have selected your search criteria, click the Refresh button.  This will generate a list of parts to be updated.  To perform the bulk change, select a New Costing Method from the drop-down list and click Apply .


Monitor & Update Standard Costs

If you use standard costs to markup part prices, the Monitor & Update Standard Costs tool can be used to change standard costs to equal the current last purchase cost.  To access this tool. click on Monitor & Update Standard Costs under the Things To Do List.


Click on the Generate List of Parts button


Enter the appropriate inventory warehouse at the top of the screen, select a radio button to generate a list of parts with a last purchase cost that is greater than or less than the current standard cost, then enter an amount or percent under variance before clicking Generate .


A list of parts will be generated and displayed.  Use the Select All, De-select All, and Select check boxes to select which part prices to modify, then click Update Standard Costs at the bottom of the screen to change the standard price to be equal to your last purchase cost for the selected parts.


Change Retail Price Based On

If you sell parts based on retail prices, you need to decide whether you want your retail prices to be fixed or based on a markup of the retail price. 

If you use fixed pricing, parts will be sold based on a discount of the retail price.  For example, you could create a discount contract of 0% to sell at the retail price, or have a discount of 20% to sell to your preferred customers at 20% off the retail price.  Alternatively, if you want to add a markup on top of the retail price, then you can use a retail markup (this should not be confused with the markup option in the parts contract wizard explained in the Parts Contract Wizard section).

The fixed vs. markup behaviour is controlled by the "retail price based on" setting for each of your parts. If you need to change the default setting for new parts created in EMDECS, please contact our customer experience team to change your RETAILPRICEBASE system parameter to either fixed or markup.

This setting can be changed in bulk for existing parts by opening the Parts menu -> Part Master → then click on the Change Retail Price Based On link from the Things To Do list on the left-hand side.


Click on Generate List of Parts .


Before generating a list of parts, the list can be narrowed down by product group, vendor, active status, and stock status.  Leave the fields blank to generate a list of all parts in your EMDECS system.  Click the Generate button to generate a list of matching parts.


Using the Select All , De-select All , and Select check boxes, ensure there is a check next to the parts that need the retail price base changed.

At the bottom of the screen, select Set Retail Price To Be Fixed (for fixed pricing based on the discount percentage) or Set Retail Price To Be Markup (to have parts pricing set using a markup of the retail price).  Click Change to update the price base.


Markup contracts that are assigned to a customer based on cost will override retail prices.

Change Retail Prices in Bulk

If you use a discount contract and maintain retail prices for parts, retail prices can be changed in bulk, based on a percentage, using the Change Retail Prices in Bulk screen. 

To access this tool, open the Parts menu → Part Master → then click on the Change Retail Prices in Bulk link from the Things To Do list on the left-hand side.


Click on Generate List of Parts .


Before generating a list of parts, the list can be narrowed down by product group, vendor, active status, and stock status.  Leave the fields blank to generate a list of all parts in your EMDECS system.  Click the Generate button to generate a list of matching parts.


Using the Select All , De-select All , and Select check boxes, ensure there is a check next to the parts that need retail prices adjusted.

At the bottom of the screen, select a change option ( Increase Retail Price by % or Change Retail Markup % to ) and then enter the appropriate percentage.  Click Change to update the retail prices or markup.


Manage Part Markup Contracts

To manage part markup contracts, open the Administration menu and select Standard Codes .


Select the Customer tab at the bottom, then open the Parts Contract tab.


The screen will be blank if you have not added any parts contracts to your EMDECS account.  To add a part markup contract, click Add .


Parts Contract Wizard

Adding a new parts contract, as detailed above, will open the Parts Contract wizard.

Each new contract requires a code and description.  Notes are optional.

Put a check next to Default to make the parts contract the default markup for any customers in EMDECS who are not assigned a specific contract.


Parts Contract:  Markup or Discount

The following markup fields are available:

  1. Markup % :  Enter a percentage to markup parts based on your default costing method (Average, Standard, Last, Landed, or Average Landed).
  2. Discount % :  Leave this field blank unless you want to maintain retail prices for all of your parts.  If you enter a value here, the sale price of parts will be based on each part's retail price instead of purchase cost history.  To sell parts at a fixed retail price, enter a percentage to discount off the retail price (enter 0% to sell at the retail price without a discount).  If you want to sell parts above the retail price, using a retail price markup, enter 0% in field and then refer to the section titled Change Retail Prices in Bulk section for instructions on how to set retail markup percentages for parts in bulk. 
  3. Core Markup % :  Enter a percentage if cores should be marked up differently from other parts.  Leave blank for core markups to be the same as other parts.
  4. Core Discount % :  Only applicable when using the discount % option above.  Enter a percentage if cores should be discounted at a different rate.  Leave blank if cores should be sold at the same discount rate as other parts.
  5. Sublet % :  Optional.  Enter a percentage to markup the cost of sublet parts.

You can enter markup percentages, or discount percentages, not both. 

Click Next to continue.


Parts Contract:  Markup by Cost Range

The Markup by Cost Range step is optional and only applicable when using a markup contract.  You can click Next to skip this step.  This is useful if you want to have different markup rates based on the cost of the part.  For example, you might want a 50% markup on any parts that cost less than $10 while having a 35% markup on all other parts.  Note - markup by cost range cannot be used with a discount contract.

To add cost range markups, click Add Markup .


Each time you click Add Markup , a new line will appear in the Markup by Cost Range section.  Enter the cost of the parts to be included in the markup in the Include Up To field, the markup %, and a core markup % if your markup should be different for core parts.

In the example pictured below, any parts that cost up to $100 will have a 40% markup:

With multiple cost range markups entered, you have the flexibility to vary your markup rates for different part cost ranges, as pictured in the example below.  Click Next to continue.

Parts Contract: Markup by Markup Code

The Markup By Markup Code screen is optional.  You can click Save / Exit to save your new parts contract without adding markup codes.  Markup codes are useful if you need to price or markup groups of parts differently from other parts in EMDECS.  For example, if you need to sell oil filters with a different markup percentage from other parts, this can be accomplished by creating a markup code.  If this is applicable for your repair shop or parts counter, this section will walk you through how to create markup codes with contain different markup groups for those parts with different markups.


To configure markup by markup code settings, click Add .


If you have not created any markup codes in your system the Markup Code drop-down list will be blank.  Click on Add New / Manage to create your first markup code.


Each markup code can contain multiple markup groups with different rates.  Begin by adding a markup code.  Click Add Markup Code .


Enter a code and description then click OK to save.


In the example pictured below, I've created a markup code named OIL.  After adding a markup code, rates need to be added.  Click Add Rate .


A markup group name can be selected from the drop-down list, or click Add New to create a markup group name.


Enter a code name and description for the markup group.


Enter the markup percentage or discount percentage.  The core fields should be left blank, unless you want to markup or discount core parts at a different rate.  Click OK to save.


In the example pictured below, a new markup group named OIL, with a 55% markup rate, has been added under the OIL markup code.  Additional rates can be added by clicking on Add Rate again.


For this example, two markup groups have been added under the OIL markup code: OIL with a 55% markup and SYNTHETIC with a 40% markup.

These markup group names, OIL and SYNTHETIC, need to be assigned to individual part numbers to follow their markup rates.  This is explained below in the section titled "Assign Markup Groups to Parts."


Back on the Markup By Markup Code screen, the location and markup code must be entered.  Effective and termination dates are optional.  Click Save / Edit to close the screen and save your changes,


You can repeat the steps above to assign additional markup codes for different groups of parts, or for other repair shop locations.  When done, click Save / Exit to complete the parts contract wizard.


Assign Markup Groups to Parts

If you have created markup code assignments, the markup groups need to be assigned to individual parts.  To assign a markup group to a part, open the Parts menu → Part Master → then search for and click on the part number.  Under the Settings tab, select the markup group from the drop-down list and click OK to save your changes.


If you have a large number of parts to update, it can be done in bulk by importing a list of parts with the markup group code entered in the "ITEMARGRO_CODE - Item Markup Group" column of the import spreadsheet ( Parts menu → Part Master Import Parts tab).  Click here for help with data imports.

Assign Parts Contract to Customers

After creating parts contracts, they need to be assigned to the appropriate customers (unless it is your default parts contract).  The default parts contract will be used for any customers who are not set to a specific contract.  To assign a parts contract to a customer, open the Administration menu → Customer search for and click on the customer name, then select the appropriate parts contract from the drop-down list.  Click OK at the bottom of the screen to save your changes.


Price Overrides and Setting a Specific Part Price

EMDECS allows for overriding the cost / price of parts.  You can override a part price by location or for all your locations.  To set an override, open the Parts menu → Part Master → then search for and click on the part number.  Under the Costs & Pricing tab, open the Override Contract Pricing sub-tab and click Add Override .


To create an override, select a contract code and currency from the drop-down lists and set an effective date (defaults to the current date).

The contact pricing override can be based on either Percent or Price .

If you base your override on a percent, the system will ignore any other discount or markup settings and use the percent entered to markup the part based on its costing method (this will ignore any discount contracts).  If you select the price option, the price you enter will be the price charged for the part.

After filling in the override screen, click OK to save.


Overrides are displayed on the screen after clicking OK to save:


To instead do an override by specific location, open the Override Contract Pricing By Location tab and click Add Override .


This opens an identical override pop-up window, except it also has an option to select a location.

After filling in the override screen, click OK to save.


An example of an override by location is pictured below:


Warehouse Level Retail Price

If you set warehouse specific overrides for retail prices, these will take effect when a discount contract is used, or if no customer contract is specified:


Part Promotional Pricing

Another tool EMDECS provides for setting part pricing is the Promotional Pricing screen.  Promotional Pricing was designed to be used as a tool for creating sales promotions with reduced part prices, typically for a limited time.

Please note:  When promotional pricing is set, EMDECS will ignore all other parts contracts and overrides unless the promotional price is higher than the customer's existing price.  The lowest price will be used.  For example, if you have a family discount contract that sells parts at cost to your friends and family, they will continue to get their 0% markup instead of promotional pricing that would be higher than what they currently pay.

To create a sales promotion, open the Parts menu → Part Master → open the Promotional Pricing tab → then click on Add Promotion .


Enter a description, effective and expiry dates.  Notes are optional.  In the bottom pane, search for a location where the promotion is taking place and click Add .  Multiple locations can be added.

Click Save / Exit at the bottom of the screen when you're done adding locations.


To add parts to the promotion, select the promotion in the promotions list, then search for a part, enter its promotional price, and click Add .  Repeat these steps to add additional parts to the promotion.


When you are done adding parts, you can click on the Print button at the top to print a promotional flyer.  Click Activate to start the promotion (on the effective date) or click Void to cancel / void a promotion.


Example of promotion flyer printout:


Upload / Update Parts by Importing from a File

There are three import tabs / screens in EMDECS for uploading or updating parts.  Open the Parts menu -> Part Master → then click on the Import Parts , Import Parts Onhands , or Import Parts Location Details tab.  Each screen has a Download Template button at the top and buttons to Browse for and Import your prepared data file.


The import templates can be edited in Microsoft Excel.  When adding new parts, the bold columns are required.  All other fields are optional.  Existing parts can be updated by just entering the item code and filling in the columns that need to be updated in your EMDECS system.


The Import Parts tab is intended for uploading or updating your parts list in EMDECS and also contains fields for updating company costs, retail prices, setting the costing method, and item markup groups.  The Import Parts On hands template can be used to upload an on hand count of existing parts, and the Import Parts Location Details tab can be used to upload warehouse storage locations and costs for each warehouse.

If you have multiple inventory warehouses and have cost by warehouse enabled, warehouse specific part costs and retail prices must to be uploaded using the parts location details template.  It contains a warehouse code field so you can upload parts with warehouse specific costs.


Price Logic Overview



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