Setting the prices for products and services is a key strategy that can define business success.
- Two of the most important elements in developing a pricing strategy are knowledge and flexibility.
- Knowing your true cost for each product is essential for ensuring all costs are covered and determining the sales price delivers a profit.
- Knowing your customers enables demographic and trend analysis that can help determine correct margin levels.
- Knowing demand changes & trends can potentially place high demand products on our shelves when the competition is out of stock.
- One size does not fit all and it definitely does not when it comes to setting pricing strategies. While cost-plus may be the norm for one market, tiered-pricing may be for another.
Acctivate inventory software with pricing tools user, Pigs Unlimited
Does your company have the tools to develop a pricing strategy?
Price optimization is critical for success and requires three key factors to be effectively executed:
- A flexible system to put the pricing strategies into action
- Access to historical data & analytics to make well-informed pricing decisions
- The ability to know the true product cost by capturing and tracking all costs associated with product acquisition
Acctivate inventory software with pricing tools user, Jewish Educations Toys
Acctivate inventory software with pricing tools user, Hobbs Iron & Metal
Create, manage, control and monitor pricing decisions across the company, by segment, by product or by customer with Acctivate.
- Each individual price can be a specific dollar value, a discount from list or a markup from cost
- Customer tiered pricing (also called multi-level)
- Can have an unlimited number of tiers
- Tiered prices can be specific to a single product or for a group of like products
- Any number of quantity break prices
- Customer specific price for an individual product or products (negotiated)
- Contract with customer pricing that is associated with special pricing for that contract – contract is selected on sales order and is specific to that customer
- Upcharge or discount capabilities
- Cost plus: Cost, for cost plus based pricing calculations, can be an average of stock on hand, last cost, or arbitrarily established specifically to determine cost + pricing
- Line level % discount
- Invoice level discount by set dollar amount or % of total pre-tax order amount
- Any price can have an optional effective and/or an expiration date
- Person entering order may be constrained to choice of price or manual override of price
Acctivate inventory software with pricing tools user, Printnovation
History, reporting & trend analysis
A complete historical record of customer sales orders, invoices, payments, products purchased, credit history and other associated sales order information relating to the account is maintained in Acctivate.
Create unlimited reports from Acctivate’s historical data repository using Crystal Reports® for comparison of pricing results, margin analysis, discount effective on close results, and additional sales order and pricing analytics.
Acctivate inventory software with pricing tools user, MR BOX
Landed cost and added cost
Capture all costs associated with the acquisition of goods including
- Shipping: Costs associated with crating, packing, handling, and freight
- Customs: Duties, taxes, tariffs, VAT, brokers fees, harbor fees
- Risk: Insurance, compliance, quality, safety stock costs
- Overhead: Purchasing staff, due diligence cost, travel, exchange rates