Pricing Explanation

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Overview

When calculating the price of an item you need three data points:
  • Item - The product which is being priced. This is where the item number and product category are obtained for price codes that use those values.
  • Location - The location where the item is being shipped from. This location is where the price code system gets list price (which is used for discount price codes), cost (which is used for mark up price codes). This is also where the price is returned from if no price codes apply.
  • Customer - The customer we're calculating the price for. This is where the customer number and customer type are obtained for price codes that use those values.

Setup

  • Price codes not in use - If you do not use any of the price codes, then set this feature to off. You can turn them off here: System Management|Global Settings|Customer Service. On the right side of the page under Price Calculation, find Price Code Use. In the drop-down menu, select "none". When price codes are not in use or no price codes apply the system will return the price for the item from its shipping location.
  • Best Price- The system calculates the price for all 8 price codes, and it chooses the lowest price.
  • Priority - This tells the system what order to look at the price codes. The default is most specific to the most general. For performance reasons we recommend that you use priority and disable all price code types that you aren't using in Global Settings.

Price Code Types

Types of Data (Columns):

  1. Item Data
    1. Item Number - Every item has a number. For example, a case (one box) of Snickers has the item number 1000076.
    2. Product Category - Every product may be assigned a product category. For example, Candy is a category.
  2. Customer Data
    1. Customer Number Every customer has a number in the system. For example: Positively Pasta's customer number is 160.
    2. Customer Type These are user-defined, but for explanation purposes, we will use three categories. Every customer fits into one of the following categories: Retail, Jobber, or Distributor. Suppose window tint is sold:
      1. Retail -A person buys window tint from my website, and I ship it to him. This person will pay the "retail" price for the window tint.
      2. Jobbers - A person installs window tint as a service. He buys tint from me at a Jobbers price, and I ship it to him. He uses that window tint to tint windows as a service for which he is paid.
      3. Distributors - A company buys window tint from my website. They pay a distributor's price for the window tint. They distribute the window tint for others to sell.

Categories (Rows):

  1. Individual - The price relates to one item number or one customer number.
  2. Group - The price relates to a product category (a group of items) or a type of customer
    (a group of customers.)

Steps to setting up a Price Code

I. First decide which price or combination of pricing you want.

  • A. Item number - Item number 100 sells for $10.00.
  • B. Customer Number – Customer 1,000 gets 10% off any item.
  • C. Product Category – The products in this category (i.e. phones) are 10% off the list price.
  • D. Customer Type
    • Retail gets 5% off.
    • Jobbers get 15% off.
    • Distributors get 40% off list price.
  • E. Item Number/Customer Number – This is contract pricing.
    • Customer A buys widget B for $10.00.
    • Customer C buys widget B for $12.00.
  • F. Item Number/Customer Type
    • Retail gets item 81 for $10.00.
    • Jobbers get item 81 for $9.00.
    • Distributors get item 81 for $8.00
  • G. Product Category/Customer Number – Customer Number 160 buys items from this category (i.e. phones) for 10% off the list price.
  • H. Product Category/Customer Type
    • Retail gets all phones for 10% off the list price
    • Jobbers get all phones for 15% off the list price
    • Distributors get all phones for 40% off the list price

II. Next, determine the Pricing Method.

  1. Price - The price on the price code is the price paid
  2. Discount - A percentage is discounted from the shipping locations price for the item
  3. Markup - A percentage is marked up from the shipping locations cost of the item

III. Finally, add the Quantity Breaks.

  1. If a customer buys less than 5 then the price is $10.00
  2. If a customer buys 5 or more then the price is $9.00
  3. If a customer buys 10 or more then the price is $8.00.