Price Rule Management with Retail ERP Solutions
- ERP (Cloud) September 03,2018
Price setting by keeping the business margins along with customer satisfaction by accounting discount and promotion packages is the essential strategy for all businesses. This is undoubtedly the most complicated part for the management. Reliable retail ERP solutions are the tools that provide complete control over prices and help in planning strategies. The product prices might vary from company to company that may create confusion for the customer to select the best solution for their need.
Here we’ll explore different pricing strategies that are used by the retailers and distributors. Furthermore, we’ll also discuss ERP solutions available to manage the pricing factor.
List PriceList price is the standardized price of a product in the entire industry. This is assigned to the product at the initial level for the whole industry. This is also known as the manufacturer suggested or recommended retail price. List price is the value of the product at which the manufacturer usually recommend the retailers to sell the product. Standardizing the price help entire industry to have the same price at different locations. Some of the distributors are might selling their product less than list price during wholesale and clearance with of the items. This price is used to determine customer pricing of items.
The formula to calculate list price of the product may vary from industry to industry. Therefore, recommended retail ERP solutions should be eligible to make calculations according to the rules and legal requirements.
Regular PriceThis is also known as customer price or the rate at which product is available for customers. This price value of the product is managed by the company itself. It doesn’t include any other charges i.e. contract pricing or volume discounts etc. Don’t underprice or overprice your product it may dangerously impact to the business bottom line. The list price of the product is suggested by the manufacturer but regular price is managed according to item worth. Both prices may vary from each other. Regular price is actually the sales price of the product.
Contract PriceContract pricing is also offered to customers for an item’s selling. This type of pricing is set according to the customer’s specific requirements. This price is set specifically for one or more customers that vary from product to product. Contract price always has a start and ending date that could be applied to all products to all customers or specific customers.
As said earlier, contract pricing is different from the regular price of the products. It is set due to wide-range of reasons i.e.
- Set after the initial negotiation to sell the products
- Offered for good standing of the business
- To retain business for the future benefit
Special PriceThis price is set-up according to specific contracts. Special price is applied to promotions and discounts of the products or seasonal basis. Usually during holidays and different seasons the discounted price of the product set to improve sales volume. This special price also has a starting and ending date dependent on different criteria. After that specific time period, the price of the product will be back to regular pricing.
Loss Leader PricingThis is a pricing strategy by the retailer that allows the store to sell few products at low cost for customer attraction. Such price is set to attract traffic from the competitors but it will not provide immediate benefit to retailers. Lowering down the price of a few products will positively help in increasing the profitability of the other products. Retailers plan such a strategy to attract a huge volume of consumers. This pricing strategy considerably benefits a business. It is proven through retail ERP solutions modules that this strategy works great to boost complementary sales of the specific item.
Psychological PricingRetail business is all about numbers, you have to get ready for unlimited surprises at any stage. Retailers have to encounter different challenges. Customers will observe the pricing strategies in a variety of ways. Psychological pricing is in other words known as the price ending. It is planned according to a marketing strategy that leaves a psychological impact. Usually, retailers tend to set product price in odd i.e. $18.99 to grab the attention of customers. It became easier to tap the irrational part of the customer’s mind.
These are the different pricing rules available for retailer. They’re dependent to product and customer value. Robust retail ERP solutions and its inventory management modules enable the retailers to set multiple pricing of products according to the above-discussed rules.