PRICING USING MARKETS
The negotiated pricing option allows you to tie a price to a quoted retail market. The cost of your inventory items, upon which your sell price is based in several of the pricing options discussed above, can also be tied to a market quote. Both types of market quotes are maintained using the same input form (Figures 9), but it is important not to confuse the two. An inventory item may be priced for sale based on a quoted retail market, but its cost may not be based on a cost market. Likewise, you may buy inventory based on quoted market prices, but sell that inventory based on a percentage markup over your average inventory cost, with no direct reference to the underlying market quotes.
When you set up an item in a customer’s negotiated prices file, or in a negotiated group file, you can choose to price that item based on a retail market quote. You do this by referencing a market file you will have already created. The market file consists of a name for the market, and then a list of items or categories of items for which the cost or sell price (or both) fluctuates with the market. Updated market prices must be manually input into the market file. When prices in the market file are updated, items in the negotiated prices files are automatically updated if they are tied to that market.
How it is implemented: Markets are set up using the Market File Maintenance form (Section II F). This input form allows you to create a market, give it a name, and then add inventory items or user-defined inventory categories to the market. Each item or category is assigned a quoted market price. Then, using the Negotiated Pricing form (Section II K), you can select inventory items and tie them to the items or categories in the market you have created.
Advantages: Allows your prices to move with a quoted retail market without the need to update each inventory item individually.
Disadvantages: Market files must be maintained manually.
 Pricing Using Negotiated Prices
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Choosing the Best Mix of Pricing Options
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