Rounding is something that we kind of take for granted. We all are used to seeing $4.99, $7.49 and $19.99 on the merchandise we sell and buy, but where did the 49 and 99 cents come from? ROUNDING! Do it Best has a very robust rounding scheme with lots of price points.
I did an "unofficial" survey of customers and other business owners and came to the conclusion than all these price points are unnecessary. So for Profit Manager we have developed our own rounding scheme.
We believe that a customer looking at an item over $2.00 will not notice or even care if it is priced $2.49 instead of $2.29. Consequently we round all items over $2.00 to the next 50 cents, $.49 and $.99. By doing that on our items that are not "Price Sensitive" or "Competitive" we can pick up $5,000 per year in bottom line PROFIT!
| Items less than $1 |
Round to 0.29, 0.49, 0.79, and 0.99. |
| Items greater than $1 and less than $2 |
Round to 1.29, 1.49, 1.79, and 1.99. |
| Items greater than $2 and less than $50 |
Round to dollars + 0.49, dollars + 0.99. |
| Items greater than $50 |
Round to dollars + 0.99. |
| $.15 and below | Cents: .03 .05 .07 .09 .11 .13 .15 |
| $.16 to $.99 | Cents: .19 .29 .39 .49 .59 .69 .79 .89 .99 |
| $1.00 to $9.99 | Cents: .29 .49 .79 .99 |
| $10.00 to $19.99 | Cents: .49 .79 .99 |
| $20.00 to $49.99 | Dollars: $1 $2 $3 $4 $5 $6 $7 $8 $9 Cents: .49 .99 |
| $50.00 to $99.99 | Dollars: $2 $4 $7 $9 Cents: .99 |
| $100.00 to $999.99 | Dollars: $4 $9 Cents: .49 .99 |
| $1000.00 and up | Dollars: $49 $99 Cents: .49 .99 |
Lets take a look at some actual examples.
For example: A package of nails costs us $0.73 and we want to have a margin of 40%. That gives us a straight retail of $1.22. Using Do it Best rounding we would sell the nails for $1.29 giving us an actual margin of 43.4%. Using Profit Manager's rounding we would sell them for $1.49 giving us an actual margin of 51.0%. We just added 8% bottom line profit for every pack of nails we sell!
I urge you to compare the two rounding schemes using the Custom Margin in the Price
Changes form. Clear all the filters, then do your own What If?
by Clicking the "Custom Margin" button and setting the % over DIB to 0.0%. Then select
PM Custom Rounding and click "OK". Write down the Sales Gain/Loss in the DIB Totals panel and run the
"Custom Margin" again, but this time select DIB Rounding and click "OK". Compare the Sales Gain/Loss to
the first one. In my case I picked up $5,734.92 just by using "PM Rounding" instead of "DIB Rounding".
| Items less than $0.50 | Round to the next penny |
| Items greater than $0.50 and less than $2.00 | Round to the next 0.05 or 0.09 |
| Items greater than $2.00 | Rounded using the desired rounding PM or DIB scheme |
Price Changes: Buttons & Grid Colors