Pricing structures

Pricing structures, by default, normally follow unit structures to give you the greatest flexibility without the administrative effort.

For example, you stock and sell golf balls by the each but also sell them by the dozen. You can either price the golf balls by the each or dozen. If you price the golf balls by the each, and sell a dozen, the price is calculated for 12 each. Likewise, if you price by the dozen and sell 2 each, the price is divided by 12 and multiplied by 2.

Not all pricing situations follow the rules. In these cases, industry standards dictate that prices and costs are always equal to one unit of measure (UOM), regardless of the purchasing, selling, counting, or stocking activity. The system handles this with special price/cost unit conversions that you define on the Product Setup record. After it is set up, all prices and costs for this product is in the special UOM regardless of the activity.

For example, a connector sells for 18 cents each; however, prices and costs are always quoted per hundred. The connectors are $18.00 per hundred and can be sold by the each, box, or case. All functions and reports refer to the price and cost according to the special price and cost UOM.

Consider an item that you stock by the reel and has a special price/cost of thousand, but your customer wants to know the each price. You can override the unit of measure by selecting Override Order Entry in the Order Entry Special Price Costing Default field in Customer Setup-Ordering. This defaults price/costing information using the unit of measure specified as the OE default in the Product Special Price/Cost Setup record. The price in Sales is converted to an each price.

To illustrate this example, suppose a reel of wire containing 250 feet has a list price of $1300 per thousand feet, and a reel price of $325 or $1.30 per foot. The customer buys a reel and wants to see the price per reel. The Override Order Entry option causes the invoice to show $325 per reel as the price. The order quantity would be 250’ or 1 reel if the unit conversion has been set up.

Specify Not Special in the Order Entry Special Price Costing Default field to select the selling unit of measure as if it were not set up for special price/costing on the Product Setup record. With the previous example, the customer purchases 75 feet of wire. The customer’s invoice shows $1.30 per foot for the price and $97.50 for the net amount.

Specify Product in the Order Entry Special Price Costing Default field and if the customer purchases one reel of wire, the invoice shows $1300 per 1000 feet for the price and $325 for the net amount.