Pricing In Se

Overview

This document will cover the basics of setting up pricing in Savance Enterprise. As the concepts and strategies surrounding pricing in wholesale distribution are highly unique per distributor and are complicated by nature, this article will fall short of explaining even a fraction of the ways the user may set up their pricing strategy. The aim of this article will be to lay out the basic function of the pricing manager and a basic process users can follow to properly leverage the software as it relates to setting 1 or many prices per item per customer.

Related Documentation

The following documents offer detail on some of the concepts that will be discussed at a glance in this document. Reading these documents in conjunction with this article is recommended. The documents below can be found within our HELP section within the application.

• “Adding a New Manufacturer Line - Process Doc” (Data Management -> Inventory Management)

• “Pricing Overrides - Process Doc” (Data Management -> Pricing)

• “Item Groups - KB”

Definitions

Item Template: Item templates are created for and used when new items are created through non stock builds (NSB), manual item creation and inventory imports. They allow item attributes, item level settings and most importantly the pricing profile to be automatically assigned to items that are tied to that item template.

Pricing Profile: Pricing profiles are a way to control column pricing and in some cases cost for any given item. Every item in the system must have a pricing profile. If there is no pricing profile specified when creating a new item, the default pricing profile will be assigned.

Column Price: Column pricing is a way to assign preferential pricing based on the type of customer an item is being sold to. Each customer is assigned a price class (1-6 where 6 is the best and 1 is the worst) every item then has up to 6 corresponding column prices. Assuming there is no contract, promotional cost or pricing override available for a given item, class 6 customers will get column 6 pricing. If there are only 3 classes of pricing set for an item and a customer is set to class 6, they will get the best available column price available, in this case column 3.

CVal: Control value - Cvals are used as control values in pricing profile formulas. There are 10 Cvals available which correspond with the 6 column prices. Cvals can be renamed by double clicking and typing a new name. This name change is a global name change, not just at the profile level.

Cost: Cost column in a pricing profile corresponds to distributor’s cost**
List Price:** Can be used for MSRP or other price

Standard Cost: Standard cost is typically used to load the normal cost for all distributors that is provided in MFG spreadsheets (that is to say not a special net cost specific to your distributorship. In summary, not your true cost).

New Item Rule: A rule set in the software that allows the user to create a rule that specifies what item template is used for new items.

Pricing Override: A way to go beyond the standard 6 column prices for a group of customers or items. Pricing overrides allow for infinite price classes per item per customer.

Item Group: A way to set parameters that specify criteria to capture a group of items with similar characteristics. An item group can be static, dynamic and parameterized. Item groups can be leveraged in contracts, inventory valuation, cycle counting, promotions, mass maintenance, new item rules, pricing profiles and pricing overrides.

Customer Group: A way to create a group of customers which can be leveraged in pricing overrides.

Volume Pricing: A mechanism in pricing profiles to change pricing automatically based on amount purchased

Retail Price: Can be used for MSRP or other

UD Cost: User Defined Cost - There are 5 costs available in each pricing profile that can be user defined. These can be leveraged in any number of scenarios. One example would be hiding your true into stock cost from sales reps. UD Cost can be renamed by double clicking and typing a new name. This name change is a global name change, not just at the profile level.

TSOpt: Flag used for advanced import concepts. Refer to the KB article titled “Managing Data Service & MFG Price Sheet - KB” for an example use case for TSOpt.

Price Hierarchy

When entering an item into a quote, Enterprise will follow the logic and pricing hierarchy pictured below in order to decide what the price will be in the “Net” field.

Manual pricing (where the user enters a different net price in the quote than is automatically loaded) supersedes all other price options. Contract, promotional pricing and pricing overrides are covered in other knowledge base articles. Column pricing will be the primary method prices are arrived at by the software and will be the focus of this article.

New Item Setup

It will be helpful to understand how new items brought into the software get the correct column prices assigned. You can create new items manually and through an item import.

Manual

Creating items manually via Inventory->Item Manager -> New will first look and see if based on the information added in the first few screens of the new item wizard is enough to capture the item in a new item rule. If this happens, the item attributes and pricing profile will be set automatically. If the item isn’t captured in the criteria of a new item rule, the user will manually select a pricing profile or will be able to override anything in the default pricing profile in order to arrive at the desired values for column 1-6 pricing. Once this item is created, future item imports that include the same item (by virtue of a matching UPC or combination of matching MFG Short & Part Number) will simply update item attributes such as cost, list, discount and more which will then drive column pricing based on the profile that was originally set.

Item Import

Adding new item(s) through the item import will likely be a key part of your pricing and item file maintenance procedures. As new items are offered on a regular basis it is important to configure Enterprise such that new items are brought in via the import utility with correct column pricing. To do so, ensure that the following process is followed. For step by step instructions on this topic, refer to the “Adding a New Manufacturer - Process Doc” referenced in the recommended reading section above.

When creating a new item from an imported spreadsheet, Enterprise will first look to see if there is a new item rule that the new item would fit. If there is an applicable new item rule, the new item rule will assign an item template to the new item. The item template will then specify a number of things but most importantly it will point to a pricing profile for that item. The pricing profile will then set the column pricing. If there is not a new item rule that captures the new item, the import utility will warn you that a new item rule was not found for the item and the item will not be imported. If there is a new item rule that assigns an item template that does not specify a pricing profile, the default system pricing profile will be automatically assigned.

Pricing Profiles

Creating New Pricing Profiles

We will discuss the recommended best practice for setting up a cost plus pricing profile. Please note that you can leverage the same concepts if you are setting up a profile for discounts off of the list price.

***Please be aware that nearly every concept discussed below may be thought of, utilized or executed differently for any given user or organization. The example and discussion points in this section are based on what Savance has seen most commonly among its average customers.

• Inventory -> Pricing Manager

  

• Pricing Rules Manager

  

• Profile

  

• Right click space below “Profile Name” and select “Add Item”

  

• You will now see a blank pricing profile. Name the profile. In this example we will set a pricing profile up for a Cost + scenario for an item group called “Relays”

  

• The below image is what the pricing looks like before editing the profile (A few CVal and TSOpt columns are not in the image)

  

• Generally, the following columns will be static values that are either imported via price file or manually entered by the user: List Price, Retail Price, Discount 1-2, Standard Cost, & Cost. Conversely, the following values are typically calculated fields leveraging custom formulas set for each column: Column Prices 1-6. Cost may be calculated in rare cases. Generally CVals are entered manually at the profile level. For a refresher on the definitions for these columns refer to the definitions section at the beginning of this document.

Renaming CVals

It is recommended that CVals used as static multipliers are renamed as something like “Col1Multi” “Col2Multi” etc. This cuts some confusion of what the CVal represents when managing pricing profiles. To rename any user defined column such as CVal or UDCost, simply double click the column header at the profile level and type in your desired name. Keep in mind this will change the column name globally.

Creating Formulas

We will now go through setting up formulas for our Relays (Cost +) pricing profile. We will start with column 6 and work backwards.

• Right click column 6 price and “Set Formula”

  

• The “Select Function” screen will appear

  

• 1- This is where saved formulas reside. You can select (or create new) a saved formula and leverage it in multiple pricing profiles. 2- This is where you will see the values used in the formula and you can test the formula with test values for any of the variables/constants used in the formula 3- This is where you find the column headers from the pricing profile (which are used as variables/constants in a given formula) as well as canned formula logic that you can use for advanced formulas.

• To create a new formula, click “New”

  

• Name the formula. In this case we call the formula “Cost * Col6Multi” to denote that the formula is leveraging constants housed in the CVal column that we renamed “Col6Multi” rather than a hard coded multiplier. More discussion surrounding why using CVals instead of hard coded multipliers is recommended will be found in the pricing theory section later in this article.

  

• Now you will begin writing a formula. You can do this manually, but syntax is a factor so it is recommended that for all non-numeric values the user leverages the canned values and functions.

• For our example we will choose “Cost” and multiply that by “Col6Multi”. To find those values and bring them into the formula text box, expand the “SE” parent item in the function menu and double click each value. Manually add a * character between the two values.

  

• The result of the formula can then be tested

  

• This is what the Column 6 price will now look like in the pricing profile

  

• Now be sure to change the value in the CVal 6 (Col6Multi) column by left clicking in the cell and typing the desired control value (In this case 1.1)

  

• Repeat this process for the remaining columns, being careful to assign the correct value for each new formula you create and adding a different control value for each corresponding CVal column.

• For our example, increase the control value by .05 for each price class therefore ending with 1.35 (Cost + 35%) for Col1Multi such that any customer set to price class 1 will get an item assigned to this profile at cost + 35%.

• Once complete your pricing profile will look something like this

  

• The critical final step of creating a pricing profile is to “Process” the profile.

• Click the process button or all work will be lost when you exit the screen

  

• You have now completed creating a pricing profile. Note that all fields that you didn’t assign a formula or hard code a value into will need to be manually or automatically entered when creating a new item via the item manager or inventory import.

Volume Pricing

Perhaps you want to offer a price break for a certain item if a large quantity is purchased. There is a function at the pricing profile level to accomplish this.

• Open the profile in question

• Right click the profile and select “Add Volume Item”

  

• The profile will have a second row added and all the formulas/hard coded values from the profile will be copied to the second row. Enter a qty at which the price break will start

  

• Now change the CVals in CVal 1-6 to reflect the price break you want to give. Perhaps it is a flat 5% break across all price classes.

• Right click the CVal you want to change and select “Override”

  

• Now change the CVal to 1.05 to reflect a 5% discount. Repeat for each CVal

  

• Notice that the cells you chose to “Override” turn blue. This will be discussed in more detail in the pricing theory section below but ultimately indicates that the value is different from the parent profile and therefore not inherited.

• Be sure to Process your changes to this profile.

Assigning Items to a Profile

Now we must assign some items to the pricing profile we created above. We can do so by assigning individual items and assigning item groups. For more information on creating Item Groups, please find the article in the recommended reading section above titled “Item Groups - KB”.

There are additional ways that items are assigned a profile outside of the pricing manager which will also be discussed later in this section.

Individual Items:

• Toggle to the Item Pricing tab in the pricing manager

  

• Search for individual items using any of the filters. In this case we searched for all items that start with Q0120. The search returned two SQD items that fit the criteria and shows the pricing profile currently assigned to those items

  

• Right click the profile name cell of the item you want to assign our newly created “(Relays Cost+)” profile and select “Set Pricing Profile”PTT14265 1 PES Unknown 999999 Peerless Elmhurst®: Shower only trim kit $65.00

• PTT14265 1 0 PES Unknown 999999 Peerless Elmhurst®: Shower only trim kit $58.14

• PTT14265 1 0 PES Unknown 999999 Peerless Elmhurst®: Shower only trim kit $65.00

• • 

• This will now give you a search window to find the pricing profile you’d like to assign. If you don’t know the profile you are looking for by name click the magnifying glass icon and then enter % in the search bar to bring up a list of all available profiles.

  

• Select the profile you’d like to assign to this item. Notice the profile name will have changed.

  

• Select Process to save your changes

  

• Now let’s test this item by adding it to a quote and looking at its price source.

  

• The screenshot above shows the customer in the quote is a price class. The pricing source indicates the price is driven by column 4 and price breaks are available at a quantity of 10 or more. This would be consistent with the pricing profile we set up called “Relays (Cost+)”.

• Repeat the process for any additional items intended to be tied to this or any other pricing profiles created

Item Groups:

If you create a pricing profile and intend to apply it to a group of like items, you can leverage any of the filters found in the top portion of the item pricing screen to find the items you want to assign said pricing profile.

• Toggle to the Item Pricing tab in the pricing manager

  

• Enter your filter values. Keep in mind you can use multiple filter values together to fine tune the list of items you are looking to maintain.

• For this example we will leverage a previously created item group called “Relays Group”.

• Right click the profile name cell of the item you want to assign our newly created “Relays (Cost+)” profile and select “Set Pricing Profile”

  

• Choose the pricing profile you’d like to use for any given item. We will assign the “Relays (Cost+)” profile to the first item on the list

  

• If your intention is to change any other items’ profile to something other than “Relays (Cost+)” repeat this process for each applicable item choosing a different profile each time. If you would like to apply the “Relays (Cost+)” profile to multiple items at a time, you can right click the profile name cell with the desired profile and choose the “Apply Selected” in the context menu and choose “Entire Column”. This will apply the pricing profile “Relays (Cost+)” to every item in this item group.

  

• Repeat this process for any additional item groups that may need to be maintained on a large scale

• Be sure to process your changes

  

Creating New Item Via Item Manager

• When creating a new item manually in the item manager you simply select the desired pricing profile when prompted.

  

Creating New Item Via Inventory Import

This process was discussed in detail earlier in this article in the “New Item Setup” -> “Item Import section”. New item rules and item templates will need to be created prior to import for this process to be executed in an automated fashion.

Right Click Context Menu

Add Item:

Add a new pricing profile

Add Volume Item:

Add volume pricing to a pricing profile

Set Formula:

Select, edit or create a new formula and then assign it to a cell in order to create a calculated value in that cell for items assigned to that pricing profile.

Remove Formula:

Remove formula from a cell

Inherit:

Allows changing a cell from a manually overwritten value to a value or calculation inherited from the pricing profile

Override:

Allows changing a cell to a value or calculation that is overriding whatever is set in the pricing profile

Set Inventory Group:

This is not relevant to a pricing profile. It is used in pricing overrides.

Tools:

Add/Multiplier & Add/Subtract Dollar Value:

Both of these options allow the user to add/subtract by a multiplier or static value. A good use case for this is if a MFG indicates they will increase their prices by 5% for all items. You can then add a multiplier to the relevant fields in the profile to handle this increase.

Show/Hide:

Allows users to show and hide columns and rows in the pricing profile including control values, user defined costs, prices, default profiles and volume profiles.

Pricing Theory

Why Use CVals?

As is demonstrated earlier in this article, it is recommended to use CVals (or as we re-named them in the example“Col1Multi,Col2Multi” etc.) in formulas for pricing profiles that involve any kind of a static multiplier. Leveraging CVals in formulas affords the user a great level of flexibility and increases ease of profile maintenance as it allows you to be able to create fewer saved formulas, use those same formulas in multiple pricing profiles and change the CVal values rather than the formulas themselves. If the cost basis changes for a set of items or you want to increase margin for a certain set of items you can change the CVals for just that profile rather than a formula that may be used in multiple profiles. If you choose to hardcode the multiplier in the formula, you will be forced to create hundreds or thousands of different formulas and manage them all separately. Then theoretically if you change the multiplier that is hardcoded in one formula that is used in many profiles you run the risk of critical pricing errors on a mass scale.

Inherited vs. Override Values

To most efficiently interpret what you are seeing in a pricing profile, it will be important to understand the difference between inherited and overwritten values. In general an inherited value comes from the pricing profile and an override value comes from item level data coming in via manual item creation, NSB item creation or inventory imports. This concept gets a bit confusing particularly in relation to item imports as any field that you bring in directly from the import (cost, list, retail, standard cost or others) are considered override values even though the user isn’t physically overwriting the value for that field in the profile. The inherited value for those fields would all be 0.00 if you hadn’t entered a static value in the profile (which would be a rare use case).

For ease of identification there is a color code that helps the user see what values on a pricing profile are inherited from the pricing profile and what are overwritten. Blue indicates an override value while gray indicates an inherited value.

Let’s compare the pricing profile we created with some items that are assigned to the same profile

Profile Level

Item Level

Notice that the column prices are all showing as calculated and inherited while the cost and list are override values.

Default Pricing Profile

As pricing profiles are required for every item built in the system, it is important to have a default pricing profile created that will ensure that should your salespeople sell the item before the person that handles pricing has a chance to update the profile, it will be sold at a comfortable margin. As such, it is a good idea to tweak the default system profile that comes out of the box according to your organization's pricing preferences.

New Item Rules

While you may want to have a catch all default pricing profile in place, it may not be the best choice to do this for new item rules. As is mentioned earlier in this article, item templates are required for a new item to be built via inventory import. If one of said new items doesn’t meet the criteria for any new item rules already set up in the system, it follows that the item will be flagged in the comparison wizard before committing the import as unable to be imported due to not having an item template assigned. Why does this matter? It is a built-in check step to make sure that new item rules have a proper item template and in turn a pricing profile assigned to them at the time of import. This should theoretically ensure that virtually all items brought into Enterprise via inventory import will be handled properly the first time.

**Should a new item match the criteria for multiple new item rules, the new item rule prioritized first in your new item rule hierarchy will be the rule used to determine the item template for that item. This is discussed in more detail outside of this document.