Pricing and Discount models can be one of the most complex and confusing features of Global Shop. That being said, it is also one of the most powerful. After all, Global Shop's target market is everything manufacturing. If you have been in manufacturing long, you know that everyone does their pricing a little bit differently. This article is designed to help you understand all of the pricing/discount features within Global Shop, and make an educated decision on if you have selected the right one(s), or if you should change. As always, we are happy to help assist you in switching if you determine that to be the right course. Please keep in mind that all quantity related discounts are line specific, and not across the entire order. Most of the options you will find below are going to be located in System Support > Admin > Company Options (Standard) > Order Entry Table Maintenance.
This article is intended for customer service, sales, finance, and system administrators. This change can drive more accurate pricing, higher profitability, and easier pricing changes in fast changing markets. Stay tuned for a future article on pricing updates and automation!
Here are the different options:
Price Class Discount
This option will allow you to create up to 36 price classes (A-Z, 0-9) that can then be assigned to individual customers. Within the price class you will be able to define a specific discount available. You can even specify a sliding price discount if you have enabled the option to do so. For example, within price class A, you could say orders $0-$4,999 get a 5% discount, $5,000+ get a 10% discount, and price class B could have totally different ranges. This would be a good option for those that sell to distributors that have multi-level pricing based on the distributor's ranking.
Price Classes are defined in System Support > Admin > Company Options (Standard) > Order Entry Table Maintenance > Price Class Discount (leave the customer ID blank here, unless you want to assign a class to only one customer)
Price Classes are assigned to Customers in the customer master screen, under the "Options" button.
If you want to use Sliding Price Discounts you need to enable the option under Advanced Order Entry options.
You can turn on a CUSTOM option to enable the sliding discounts to be shown on quotes.
This option is much more simple than the rest. Using Alt Prices you can define a fixed list of prices per part on the part master itself. There is 1 list price (default) and 14 Alt Prices. Then each customer is assigned an Alt Price Class on the customer master which is then used in Order Entry. Alt Prices can also be manually selected on an order by order basis - although you don't want to use that as an excuse to use this for quantity breaks. There are appropriate options for when to use quantity breaks. A good example of this, is maintaining a list of prices based on margin levels.
You will define the titles for the Alt Price fields under System Support > Administration > Company Options (Standard) > Order Entry Table Maintenance > Inventory Alt Price Class. You can then label each of the 14 alternate price fields.
You will want to enable the Advanced Order Entry option "Alt Price use Cust Price Class". This will allow you to use the Price Class field on the customer master to assign the 1-15 alt price code. Otherwise, the system will use list price on orders, and you will manually select the individual alt prices using the price browser in Order Entry.
This one is pretty straight forward. You can assign at the customer level, the discount amount. This assumes that you really only use the list price, and individual customers are given a discount rate - instead of assigning them to a group (price class) of customers that get a specific discount rate. When an order is created for a customer with an Order Discount, that discount will be applied at the order level.
In the customer master, you simply need to enter the Order Discount.
Quantity Buy Discount
We should all be familiar with a quantity break discount. That is precisely what this is. You can configure this by specific part with up to 9 quantity breaks. Keep in mind that unless a customer has other options defined - these discounts are available to every customer.
First, you need to define each part that has a quantity price break using Order Entry > File > Discounts. The screen itself is pretty easy. Enter a part, and then enter your quantities/discounts. You do not have to use all 9 discounts, but you can use up to the 9. There is a date field you can enter if you want to keep a historical record of when the price was created.
This option should be reserved for situations where you have a contract (official or non-official) where that particular price is guided by a specific purchase order. For example, if you have a purchase agreement with one of your customers and they are going to buy xxx quantity of this part on xxx purchase order, but any other purchases of the part outside of this customer/ship-to/purchase order are subject to different pricing - then you want this option. You do have the ability to have more than one part on a contract.
Contracts are defined under Order Entry > File > Contract Pricing.
Each customer where contracts are present need to have the "Contract Master" field set to "Y" in order for the contract to be considered. This is located in the customer master under the "Options" button.
Contract Part Pricing
Very similar to Contract Pricing, and often confused with, the Contract Part Pricing Option is more desired when your agreed upon price is more date based, and not a specific PO/Contract. This is a common tool when you are producing the same part over a long period of time, with periodic pricing adjustments based on market fluctuations (automotive components is a great example). Quantity breaks within this part are also available.
Contract Part Prices are defined in Order Entry > File > Contract Part Pricing.
Customer / PL Discount
This option is reserved for situations where customers only qualify for a discount based on specific product lines they are purchasing from. You can simply define customer, product line, and discount. This is comparable to the Order Discounts option mentioned before - but it allows you to break that discount down based on Product Lines.
Customer / PL Discounts are defined in Order Entry Table Maintenance > Product Line/Customer Discounts. This screen can be a bit tricky - because it supports markups instead of discounts. If you want to enter a discount - then you need to enter it as a decimal value (i.e. 10% discount is .10). On the contrary - if you want to add a markup to the price - you can enter it as 1+markup (i.e. 10% markup is 1.10).
Price Class / PL Discount
This option works the exact same as the Customer / PL Discount option except that instead of specific customers receiving the PL discount, you can assign it to a price class allowing you to group customers together into the same price class, and apply a Product Line discount. This is comparable to the first option we discussed (Price Class Discount) except that using this method allows you to break those discounts down by Product Line.
Price Class / PL Discounts are defined in Order Entry Table Maintenance > Price Class / Product Line Discounts and set them up the same way as the Customer / PL Discount was described.
PL / Qty Discount
While this is a very uncommonly used option - it is powerful nonetheless. Using PL / Qty Discount, you can assign discount rates based on quantities purchased within a product line across an entire order. This is only a viable option if quantities of all parts within a product line are similar. For instance - if you have a product line called "Tables" and you have an agreement with the customer that you have a 10% discount for mix-n-match tables of 10, 20, 50, and 100 - this is a great option for you.
These discounts are defined in Order Entry Table Maintenance > Product Line/Qty Break Discount. You simple enter the product line, and up to 6 discount/quantity values. Make sure to enter the discount in decimal form.
Part Price Code
The best way to describe this option - is that it works very similar to the Price Class / PL discount option, with the exception that you are using Part Price Codes instead of Product Lines. It is entirely possible that you group your part pricing by a more granular approach than just a Product Line. Maybe you have 5 Product Lines, but you have 400 groupings of parts that you use for discounts (for example, material grade). Using this method, you assign each part a "Part Price Code" and each customer a "Price Class". Then you can assign a discount/Quantity Break discount structure to each combination of Price Class/Part Price Code.
Setup your Price Classes in Order Entry Table Maintenance > Price Class Discounts and assign them to your customers in Customer Master > Options.
Setup your Part Price Codes in Order Entry Table Maintenance > Part Price Codes, and assign them to your parts in Inventory Master > Options.
Once you have the mapping above completed, we can move on to setting up the discounts. This is done in Order Entry Table Maintenance > Part Price Code Table.
Price Category Pricing
This option can get quite complicated to explain. It does have very few use-cases. You can use Price Category Pricing to define a cumulative discount, per category. Each price category is given 5 discounts and the 5 discounts are always applied, regardless of anything else. However, they are applied incrementally. This option works very similar to the Price Class Discount method, except that instead of defining a flat percentage, you will define multiple percentages that are cumulatively added. This makes the most sense when users want to be able to see each incremental discount being applied to that category.
Price Categories are defined in Order Entry Table Maintenance > Pricing Category Table. The Price category will support up to 2 characters.
You will then configure the Inventory Master > Options Price Category, and the Customer Master > Options Price Category.
- Group Part Pricing (added 2/8/2022 - content provided by our excellent friend Greta Townes at Magnolia Brush)
Like Contract Part Pricing, Group Part Pricing is a date based option. Group part pricing can be assigned to a group of customers vs a single customers. Group Part Price codes are set up in the Customer Master under Options/ Primary Group , Secondary group or can be manually added on a sales order or quick quote. They can also be assigned to additional Ship-To addresses.
Groups are defined in Order Entry > File > Group Part Pricing using the group button at the bottom.
If the Standard Order Entry Table > Pricing Options > Group Pricing option Use Price Effective Dates is on, the Effective Date field is available. If the Standard Order Entry Table > Pricing Options > Group Pricing option Use Price Expiration Dates is on, the Expiration Date field and calendar look up will be visible. Depending on your company options you can check or uncheck Use Qty Price Breaks to enter pricing with either Qty breaks or flat fee pricing.
Group Pricing is subordinate to Contract Pricing and Contract Part Pricing.
Pricing & Discounts Hierarchy, Pricing Options and Discount Options
It is important to understand that there are more options throughout Global Shop to enable these pricing options, and also to make them cross compatible. Here are some of the areas you need to review and ensure they are configured correctly.
Company Options (Standard) Order Entry
In the "Discount Options" section you will find many options related to the order in which the pricing options are applied, whether you want to apply one option, add in order, or combine them. You are also able to select which prices that the discounts can apply to.
While the options above do allow you some control over the order in which discounts are applied. However, the pricing hierarchy is predefined as follows.
Contract Part Price
Part Price Code
Quantity Break Discount
You may notice that "Inventory Price" is all the way at the bottom. That is because the system is always going to look for a configuration/price and only use the list price as a final option if no other method is found.
Lastly - you can select any valid price on an order by selecting the browser next to the price on an Order Line. The hierarchy above only drives the choice of what to default the price to when adding a part to an Order Line.
"There is no test like production"... Just kidding! Make sure you set all of this up in the test/PLA environment to make sure you accomplish your goals.
Start Small. Since so many of these options intermingle with each other - it is important to set up each situation separately, test it, and then move on. If you have configuration issues - it will be harder to find them if you have 3 different options enabled.
See Best Practices. Not following these best practices are the most common mistakes.
Global Shop Help > Menu Topics > System Support > Administration > Company Options (Standard) > Order Entry Tables
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