Pricing Overview in Sales Order Entry

This topic explains some basic pricing concepts and terms that all salespeople and managers should be familiar with.

Categorizing Customers

Customers are categorized by price class and customer type.

Grouping your customers by price class lets you give your best customers your best prices. These customers can be grouped together in a price class, such as class 4, that gives them the best everyday pricing.

Grouping your customers by customer type lets you offer promotional pricing to certain types of customers. Some examples of customer types include large contractor, small contractor, electrical, industrial, and retail. Using the customer type, you can give all electrical customers a discount this month on certain products.

Your company's pricing manager uses the Customer Pricing/Printing window to specify a customer's type and default price class.

Categorizing Products

Categorize products by sell groups in order to apply similar pricing to similar products. Product sell groups can include all products in a price line, or part of a price line. In the Sylvania price line, for example, the Sylvania miniature lamps might be one sell group, and the basic Sylvania flourescent lamps another. Your pricing manager uses the Price Group Maintenance window to include a product in a sell group.

Using a Sell Matrix

Selling prices are determined by a sell matrix. As shown in the example below, a selling price matrix is made up of rows, columns, and cells, like a spreadsheet.

The columns across the top show the price breaks for the customer categories, such as customer price class, customer type, customer, or quote. The rows down the side show the categories, such as sell groups or individual products.

A pricing formula is specified for each cell in the matrix. The formula is used to calculate the selling price. For example, you can multiply a product's replacement cost by a certain percentage. The system determines a customer's selling price by using the formula in the cell where the categories for the customer and the product intersect. In the example below, a Class 2 customer buying cool white lamps gets a price of replacement cost multiplied by 1.9.

	Customer Class 1	Customer Class 2	Customer Class 3	Customer Class 4
SYL-MIN Miniature Lamps	REP-COST x 1.8	REP-COST x 1.7	REP-COST x 1.6	REP-COST x 1.5
SYL-FLR Fluorescent Lamps	REP-COST x 1.9	REP-COST x 1.8	REP-COST x 1.7	REP-COST x 1.6
SYL-COOL Cool White Lamps	REP-COST x 2	REP-COST x 1.9	REP-COST x 1.8	REP-COST x 1.7
Sample Sell Matrix

Your pricing manager creates matrix cells using Quick Sell Matrix Maintenance or Sell Matrix Maintenance. In most cases, you can use Quick Sell Maintenance, unless a cell has special requirements, such as quantity breaks.

The vendor's prices and costs are maintained in Product Price Sheet Maintenance. The matrix cell formulas use those amounts in the price calculations.

Pricing and Dates

Each matrix cell has a date when its pricing formula becomes effective, and another date when it expires. This lets the cell coincide with a vendor's price sheet that is good for a specified period of time. If two cells have overlapping dates, the system uses the cell whose start date is closest to the order's price date.

You can force an order to use a price date you specify by entering a different date in the Pricing Override window. By default, the current date is shown, but if you enter a new date, the system uses the appropriate pricing from that date.

Special Pricing

There are many ways to change prices, such as using manual price overrides or changing prices using calculations in numeric fields. You can also apply special pricing using other features, such as quote pricing or contract pricing.

Quote pricing is used for special pricing on one or more products. A quote is in effect for a limited time period and can be offered to one or more customers. In most cases, your customer must ask for quote pricing. To activate quote pricing, enter the quote name in the Quote field in the Order Pricing Override window.

Contract pricing lets you link additional customers to another customer's pricing. Many distributors create a model customer with the appropriate pricing, and then link other customers to the model customer's record. Once linked, the contract prices are used, except when the other customers' prices are better.

You can also apply special pricing using Best Price Check. When you enable Best Price Check, the system compares cells in the pricing hierarchy and uses the best price it finds.