Creating Pricing Rules

Creating pricing rules involves entering the details of the recipient, and item and defining the criteria for the rule. Pricing rules can be created based on a variety of factors, including production costs, competition, and profit margins. They play a crucial role in guaranteeing that item prices remain competitive, attractive, and profitable for the business.

Entering a Pricing Rule

When creating a pricing rule, you will begin by entering the header-level information, such as rule name, recipient type, address type, item type, tag type, rule type, and priority. After the basic information is entered, you can proceed to set the criteria for the rule.

To create a pricing rule, go to Menu > Utilities > Pricing Rule

Pricing Rule Header Fields

Field	Description
Active	Check this box to mark this rule as "Active". Please note that only an active pricing rule will be applied by the system.
Show As Discount	Check this box to allow users to display the rule as a discount.
Rule Name	Give a name to the pricing rule here.
Rule For	This field allows you to select whether you want to create a rule for the "Sales" or "Purchase" workflow (Please Note: Turn on the "Enable pricing rules in purchase modules" app config to enable the pricing rule in purchase modules).
Recipient Type	Select the recipient for this rule. “Customer” will only apply the rule to a specific customer, “Customer Group” will only apply the rule to a group of customers, and “Any” will apply the rule to all customers.
Recipient	If “Any” is not selected for “Recipient Type”, then enter a “Customer” or “Customer Group” that this rule will apply to.
Address Type	Select the address type this rule will apply to. "Ship To Name" will apply the rule based on the shipping address name, "Ship To Zip Code" will apply the rule based on the zip code, and "Any" will apply to all addresses.
Address	If "Any" is not selected for the "Address Type", then enter a "Ship Address Name" or "Address Zip Code" that this rule will apply to.
Item Type	Select the item type this rule will apply to. “Item” will only apply to a specific item, “Item Group” will only apply to a group of items, “Item Brand” will apply to all items within a brand, and “Any” will apply to all items.
Item	If “Any” is not selected for “Item Type”, then enter an “Item”, “Item Group”, or “Item Brand”, that this rule will apply to.
Tag Type	Select the tag type this rule will apply to. "Customer" will allow you to apply the rule based on customer tag(s), "Item" will allow you to apply the rule based on item tag(s), "Task" will allow you to apply the rule based on task tag(s), and "Any" apply to all tags.
Tags	If "Any" is not selected for "Tag Type", then enter the "Customer Tags", Item Tags" or "Task Tags".
Rule Type	Select the type for the pricing rule. There are 2 options here: “Price Level” and “Restriction”. Price Level: Use a Pricing Level if you want to override the default Standard Unit Price that is fetched in Sales modules. For instance, if you want a particular customer to have a set discount on a brand of items, use a Pricing Level. With an active Pricing Level, you will notice the default Standard Unit Price is overridden with the criteria that you have set. Pricing Restriction: Use a Pricing Restriction if you want to restrict how low Sales Reps in the system can sell items to customers. For instance, if you don’t want any item to be sold below cost you can set up a Pricing Restriction for this. Restrictions can then be manually overridden and approved by management.
Priority Number	Enter the priority for this pricing rule. The bigger number takes higher priority over smaller numbers for conflicting rules.

Adding the Pricing Rule Criteria

Once the basics are set, you will proceed to add the criteria based on which the pricing rule will be applied.

Pricing Rule Criteria Fields

Field	Description
Price Currency	Select the currency for the rule.
Price Adj Type	Select the pricing equation to apply for this rule. Choose from the following options: Markup: Select this option to increase the item price. The new price will be equal to [Cost Type + [Value % * Cost Type]]. For example, if you set a 10% markup on a $50 item, the adjusted price would be $55. Markdown: Select this option to decrease the item price. The new price will be equal to [Cost Type – [Value % * Cost Type]]. For instance, a 10% markdown on a $50 item would result in an adjusted price of $45. Margin: Select this option to ensure a specified profit margin is maintained. The system calculates the adjusted price to achieve the desired profit margin based on the cost. [New Price – Cost Type] has to be equal to [Value % * Input Price]. For instance, you set a 20% margin on an item with a $40 cost, the adjusted price would be calculated to achieve a 20% profit margin. Percentage: This option allows you to directly adjust the base price by a specified percentage. The new price will be equal to [Value % * Cost Type]. If you choose a 5% percentage adjustment on a $60 item, the adjusted price would be $63. Amount: Select this option to add a fixed amount to the base price. The new price will be equal to [Value + Cost Type]. For example, if you set a $5 amount adjustment on a $30 item, the adjusted price would be $35. Fixed: Select this option to set an absolute price that will be applied to the item, regardless of its base price. The new Price has to be equal to the Value. For example, if you set a fixed adjustment of $10, the new price will be $10.
Operator	Select the equation’s operation to apply for this rule.
Value	Select the value to use in the pricing equation.
Cost Type	Select the cost type to use in the pricing equation.
Date Range	Enable this feature and select a date range if you want this pricing rule to be seasonal and should only apply for certain days of the year.
Qty Range	Enable this feature and enter a quantity range if you want this pricing rule to only apply for select quantities.

After setting the criteria, click on "Save" to create the pricing rule.

Once the rule is created, whenever the criteria are met, the rule will be applied as per the priority.

It is recommended when setting up Pricing Rules or Levels to do it on a single item first and test it on a Sales module to ensure it behaves as expected. If it is set up correctly, then it can be applied to the desired item(s).

Manually selecting the pricing rule

The pricing rule can also be selected manually from the item detail level in the sales and purchase orders, in case you have multiple rules at your disposal. Although the auto-application of the highest priority level is the default for orders, users can choose an alternative pricing option if needed.

Right-click on the item in the SO Details/PO Details section and select the "Pricing Level" option.

Choose from the available pricing levels to apply to the item.