PRICING USING NEGOTIATED PRICES

---

The Application allows you to set up a special pricing file for your customer. This functionality is referred to as “negotiated pricing” or “negotiated inventory” and there are special input forms to allow you to maintain these files (Figures 7). The prices created using this option override any configuration you might have set up using price brackets or the cost-plus mechanism. Negotiated pricing, in turn, is overridden by the Global Ad Pricing mechanism (if the global ad price is lower). The flowchart below illustrates the logical process The Application applies when determining the price for a given item during the order-entry process (Figures 8).

There are two kinds of negotiated pricing files: customer-specific files and group files. A customer-specific negotiated pricing file is basically a list of inventory items which have been assigned a special price for that customer regardless of how the pricing mechanisms in the inventory and customer files have been configured. In other words, if you have a customer that has been assigned to Price Bracket 4, but for certain items you want the customer to be charged a different price than the price calculated for those items in Price Bracket 4, you can create a negotiated pricing file for the customer, include those items in the file and configure the file to calculate prices for those items differently than they would be if you just relied on the bracket mechanism. Group negotiated pricing files are very similar to customer-specific negotiated pricing files except that you define a group and include the specially-priced items in that group, and then assign one or more customers to that group. An example of both types of files can be seen in Figures 7.

When setting up a special price for a specific inventory item in a negotiated pricing file, you can set it up so that the customer pays a fixed dollar amount for the item, a percentage variance based on the cost of the item, or a price tied to a retail market quote.

When you create a price group, you set up items in that group just as you do for a customer’s negotiated prices file. However, by creating a group, you can then assign more than one customer to that group. In a sense, the price group can be seen as a way to extend the functionality of the price brackets. An effective date range can also be implemented for price groups, such that the negotiated prices for that group only apply for a limited time just as with the Global Ad Pricing option.

SUMMARY OF PRICING USING NEGOTIATED PRICES

You can create two kinds of negotiated pricing files: one for a given customer or a group file to which any number of customers can be assigned. The negotiated prices files allow you to set up special prices for inventory items based on a fixed dollar amount, a percentage variance from cost, or a retail market quote.

How it is implemented: A negotiated pricing file can be created for a customer using the Negotiated Pricing form (Section II K). A price group can be set up using the Add Negotiated Group form (Section II K) and then maintained using the Negotiated Pricing form.

Advantages: Negotiated pricing allows for the most flexibility by letting you assign a unique price for a single inventory item bought by one specific customer. Negotiated pricing allows you to tie prices to a quoted retail market. Using a price group allows you to set a date range during which the special prices will apply. Because negotiated prices override all other pricing mechanisms in the system, other than the mechanism designed for special ad prices, this option allows you to set up more general pricing mechanisms and still have the flexibility to set up a special price for any circumstance that deviates from the norm.

Disadvantages: Requires additional files and additional input to setup negotiated prices and groups. Less automatic than other options. Adds an additional level of complexity that must be maintained and updated properly.

---

Pricing Using Global Ad Pricing

TOC

Pricing Using Markets