Wholesalers, distributors and most of small business owners have to manage their product pricing: selling prices and purchase prices.
For some businesses, it is pretty simple, they have one purchase price per product and one selling price per product. However, others require more flexibility in their pricing. Erplain's advanced pricing feature provides small businesses more flexibility to manage pricing levels and pricing rules. Customers, products, stock locations or currencies can be used to trigger your price rules.
The benefits of creating a pricing rule rather than modifying prices when creating sales or purchase documents are:
Advanced pricing gives countless of possibilities to customize your pricing to fit your business' processes and needs. What are the most common scenarios wholesalers and distributors use these pricing rules for?
One of the main benefits of advanced pricing is the ability to create unlimited price levels for your product line. Price levels are useful for distributors and wholesalers who organize their customers in different tiers. Each tier or customer group can be assigned a different service level and pricing. Advanced pricing also comes handy for distributors selling internationally and facing multi-currency requirements.
Erplain lets you add 2 selling price levels by default: recommended retail price and wholesale price.
However, a lot of wholesalers have a more granular approach and sort organize customers in multiple tiers. For example, a distributor might have 3 tiers to classify his customers: Tier 1, Tier 2 and Tier 3. Tier 1 is the wholesale price, Tier 2 is 90% of the wholesale price and Tier 3 is 80% of the wholesale price. The wholesaler can use a different markup for each tier (learn more about markup pricing)
There are also some cases where wholesalers negotiate separate and individual contracts with each customer. This contract defines the markup hence the pricing level the customer will purchase the goods at. Some businesses have a different price level for almost every customer. To avoid any mistake and save time when creating estimates, sales orders or invoices, it is easier to setup dedicated price rules.
How does it work?
1. Tag your customers
You can add a tag to a customer when creating a new customer or you can edit a customer profile and add tag(s) in the field 'tags'.
Tips: make sure to use tags that have a meaning for you and your team and to always use the existing tags once it is created (for example be careful not to create a tag 'Independent retailers' and then type 'Independent retail').
2. Go to the 'Advanced prices' menu in 'Products & Services'
3. Create your pricing:
• Start by selecting the products you want to apply the condition to. If you wish to create a new pricing level for all your products, select 'All products'
• Select which price level is going to be replaced by the rule: wholesale or recommended retail price.
• Enter how this new price should be calculated
• Select 'Customer tags' and enter the tag that will trigger this new price.
Selling to different countries mean selling in multiple currencies. You can create price rules to set the price of your products based on currencies. It is best to add an advanced pricing than creating a new product with another currency as it will help you keep track of your stock levels. This rule also works if you are buying in multiple currencies.
How does it work?
1. Go to the 'Advanced prices' menu in 'Products & Services'
2. Create your pricing:
• Start by selecting the products you want to apply the rule to. If it is the same calculation for all products (for example: a multiplication based on a currency rate) we recommend choosing 'All products' here.
• Select which price level is going to be replaced by the rule: wholesale price, recommended retail price or purchase price.
• Enter how the new price should be calculated
• Select 'Currency' and choose the currency of the sales or purchase document in the dropdown menu that will trigger this rule.
Another scenario distributors are often exposed to is pricing based on the type of product or product category. This is often the case for distributors or wholesalers with a large range of products.
For example, a bike wholesaler has several product categories: road bike, mountain bike, city bike, folding bike, accessories. This wholesaler can decide to create a new pricing for his accessories. He can apply a new price to the entire category by creating an advanced pricing rule.
For example: during St Patrick's Month, John distribution's business decides to reduce pricing by 10% on all green items. He would then choose attributes 'Green' to create the rule.
Some products don't sell as well as expected and you might want to reduce the price to encourage sales. It is possible to choose specific SKU to create your advanced pricing.
Most of the time, these scenarios will be a combination of different conditions. In the St Patrick's example, it is very likely that John wants to limit this discount to the month prior to St Patrick's day. In this case, he would add both a time period and an attribute to trigger the advanced pricing.
How does it work?
1. Go to the 'Advanced prices' menu in 'Products & Services'
2. Create your pricing:
• Select the products you want to apply the condition to:
○ For product category, choose 'Selected Product Tags' and enter the relevant tag(s).
Tips: Make sure you have tagged your products. You can add tag to products when creating a new one or you can edit existing products to add tags.
○ For product attributes, choose 'Selected Attributes' and enter the attribute(s).
○ For a specific product or SKU, choose 'Selected Product Variants' and choose one or several SKUs.
• Select which price level is going to be replaced by the rule: wholesale price, recommended retail price or purchase price.
• Enter how the new price should be calculated
• Select additional conditions if necessary, such as time period, seasons, customers…
Advanced pricing is also a great way to run a promotion. As a distributor or wholesaler, there are many reasons that can lead you to offer a discount on your products:
For example: off-peak season to maintain sales, sale season, black Friday, Holiday season, Halloween, Easter…
Your business priorities might change due to sales performance, competition, changes from your suppliers or many other reasons. Inventory is costly for your business so if you decide to stop selling a type of product, it is always best to sell off existing stock of this item.
Get rid of surplus or sell off your seasonal products.
We showcased the most common scenarios where advanced pricing turned out to be a powerful tool for wholesalers and distributors. There are endless of possibilities to use them and to create rules. It all depends on your business and what you are trying to achieve.
Remember you can combine conditions to create the price rules of your choice. Simply be careful when creating these rules. The more rules you have, the more complicated it is to manage as they could overlap.
Start creating advanced pricing in Erplain! If you don't have an erplain account, start a free 14-day trial to check Erplain's powerful inventory and order management features.
More information:
• Browse our manage prices article in our help center
• Learn how to add tags
• Any question? Submit a ticket
