Your pricing structure will typically be driven by the way your products and customers are grouped. For example, customers may be grouped into categories or sources, while products can be grouped by major group, product line, and price groups. Having these groups in place allows you to set up a high level default pricing structure to ensure desired profitability. Complexity will vary based on your type of business and the variety of groupings used to set prices.
For example, a customer that is categorized as a contractor may get a deep discount when they purchase products of a particular product line. A retail customer will pay retail price for the same products. There may also be situations that fall outside of your general pricing defaults. Throughout this pricing section, we will highlight how to configure your pricing defaults as well as how to address exceptions to your general pricing structure.
Distributors that negotiate most of the pricing with customers will utilize the sales history and cost of a product to maintain margin pricing. This type of pricing is usually driven by the salesman, who sets the price for the product based on the cost, profit margins, and the individual customer. For this structure, the use of a Price Matrix is a general starting point. See Understand sales history-based pricing to better understand this method of pricing in Inform.
Those distributors that focus on the grouping of customers and products into Customer Categories and Product Lines can then set price formulas in the Price Matrix. However, situations may arise requiring more refined groups and price settings. To begin, we will look at the ways that customers and products can be grouped for pricing. Then, we will look at how these groups can be used to set prices.
Customer Groups
|
Group Type |
Location to add or delete customers |
Description |
Example |
|---|---|---|---|
|
Customer Category |
File > Customer > Master |
Groups usually reflect the type of business run by customers. |
Schools Retail Industrial Contractors |
|
Price Contract |
Sales > Pricing > Price Contract |
Method of grouping different customer types together and linking them to receive special pricing on particular products (e.g. products from one vendor). |
State Police Fairfield County Schools Dept. of Transportation |
Product Groups
|
Group Type |
Location to add or delete customers |
Description |
Example |
|---|---|---|---|
|
Product Line |
File > Product > Master |
Groups of similar products, products that require similar materials, or products that are purchased from the same vendor. |
Pipes Paper Products Amtrol Parts Kohler Chemicals |
|
Price Group |
File > Product > Master |
Method of grouping unrelated products together under a set pricing structure. Helpful for grouping products within the same product line for pricing. |
Standard Discounted Clearance Kohler Faucets |
|
Major Group |
File > Product > Product Line |
Method of grouping product lines together to add a tertiary pricing option. |
MG: Pipes PL: PVC, Black, Copper |
- Customer Category or Product Line groupings should be required for each new customer or product, making them easy to use when setting pricing formulas.
- Price Contract and Price Group settings give you more selective control over the customers and products that the price formula affects. You can add new groups at any time to refine your pricing structure.
These groups can now be used to set up your Price Matrix. The Price Matrix is a collection of formulas set to calculate the price of a product based on different purchasing scenarios. For example, if you want all contractors to pay 10% less than the list price each time they purchase a product from your Fittings product line, you can set the formula so that the price will be automatically calculated when a sales order or sales quote is generated.