Stop hoping you'll hit your profit goal and start guaranteeing it. This article walks you through SetSale’s powerful Gross Margin Pricing model, a strategy that ensures you earn a consistent, reliable profit percentage on every single quote.
What is Gross Margin Pricing?
Instead of applying a simple markup to costs, the Gross Margin model flips the script:
You set an exact Target Profit Percentage (e.g., 55%).
SetSale uses this percentage to calculate the precise selling price needed to hit that margin after factoring in your costs, overhead, sales commissions, and financing fees.
How to Activate Gross Margin Pricing
You can easily switch your company's pricing strategy in your configuration settings:
Log in to your SetSale account.
Navigate to Settings in the main menu.
Select Pricing, then choose Job Costing.
Choose your desired pricing model: Markup or Gross Margin.
Enter your desired percentages for:
Target Net Profit Percentage (for Gross Margin).
Markup Percentage (for Markup).
Select Save.
How SetSale Calculates the Price
When a new quote is built, SetSale follows a clear formula to guarantee your profit target:
Base Cost: The system starts with your Direct Costs (equipment and labor) plus your defined Overhead Percentage.
Algorithm Takes Over: SetSale's algorithm then calculates the final Revenue amount needed to achieve your target Gross Margin.
Automatic Adjustments: The formula instantly factors in complex variables like Financing Fees and Sales Commissions (if applicable), giving you a truly accurate, pre-discount price.
Real-Time Margin Tracking
The true power of Gross Margin Pricing shines when your team applies a discount:
When a technician applies any discount or rebate, SetSale instantly displays the reduced Net Profit Margin in real-time on the quote screen.
If a discount causes the profit to fall below your set threshold, the profit margin number will turn red, serving as an immediate warning.
This feature empowers your sales team to clearly understand the direct financial impact of their decisions, helping them make smarter, more profitable choices in the home and avoid over-discounting.