Inventory Price Management
- Andres Toledo
This article will help you understand why pricing is crucial for your operations in Komet Sales. You will learn about the various pricing methods available and how the system calculates suggested product prices. Furthermore, the article will guide you on how to manage your inventories, add markups and markdowns, and explain how price lists come into play. Additionally, you will find answers to some frequently asked questions.
User Roles: Admin, Sales Manager, and Setup.
Important information.
Why is pricing important?
Effective pricing is a critical strategy that significantly impacts a product's success. It directly affects revenue and profitability, shapes your market position, and is key to standing out in a competitive market. Komet provides powerful tools to help you streamline your pricing decisions. By using the Inventory Pricing screen, you can effortlessly set up prices and customize settings to automatically calculate the final pricing of your products across all sales channels, including e-commerce. This feature makes pricing a breeze, saving you time and effort.
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Company GPM
The Gross Profit Margin (GPM) is what the system uses to determine the suggested prices for your products and assigns it as Price A, the price that Komet will use as a default price, making it easy to calculate the product’s suggested or final price.
To set up your company GPM, do the following instructions:
Go to Setup and select Settings.
Click on Financial Settings from the Company Setup group of settings.
Enter the GPM %.
Optional: Set an alert when the price is manually entered, and it does not comply with the GPM.
Click on Save.
Remember to set the GPM correctly to guarantee that suggested base prices align with your business needs!
Are there different pricing methods for the same products?
Yes, there are; in the Inventory Pricing screen, you’ll find four price columns where you’ll see suggested prices and can manually modify them. Each column will serve as a price that applies in different ways to the products you are selling:
Landed Cost. This cost is determined based on the shipping method chosen for the order and any applicable unit cost components like cost, freight, handling, duties, inbound freight, and additional charges.
Price A. This is the Default Price within Komet and it is displayed in the Price A column in the pricing screens. It's calculated according to the product landed cost and the company's GPM.
Price B. This price is used for Default Type B Customers. Some companies might want to use it as an alternative price for some customers according to sales negotiations, or you can use it as a reference price.
Web Price. The price the system will display in the E-Commerce.
What else affects product prices?
Once you set the prices on this screen, other factors come into play when the system calculates the final price that your customers will pay. The additional factors are the following:
In this guide, we will review each of these factors in detail. You can keep reading or click any of the items above to skip to that section.
Landed Cost
The Landed Cost is the sum of the costs associated with a product, which may be related to its manufacture and logistics.
How is the landed cost calculated?
There are two types of landed costs: Estimated and real.
Estimated Landed Cost. The estimated landed cost is calculated based on the Unit Cost, AWB Freight, Handling, Duties, Inbound Freight, and Additional Charges.
Real Landed Cost. The real landed cost is calculated when you make the Purchase Order and AWB reconciliation by adding the freight and handling costs to the unit cost, duties, and other additional charges incurred during the procurement of the product.
Before the product arrives, the system will display an estimated landed cost. Once the grower adds the products to an AWB and confirms the shipment, the system will calculate the real landed cost and update the product price accordingly in the Staging Area.
Landed Cost as Price
You can use the landed cost as a price where the gross profit margin (GPM) will be zero percent, and the price will be recalculated when generating the final order, overriding the price that was set in the Prebook. This price will be the one displayed on the sales screens for this customer.
This feature applies to both units and boxes.
If you want to learn how to set the Landed Cost as Price, go to Landed Cost as Price.
Managing Product Prices
When products are added to the inventory, you need to set the prices for each from the Inventory Pricing screen. Depending on your settings, the system might suggest some prices, but you’ll need to verify if they are valid or if you need to make adjustments or add any missing values.
To set product prices, do the following instructions:
Go to Inventory and select Pricing.
Select the inventory you are modifying. There are five options:
Inventory Items. View and manage the products from the Local, Open Market, Prebook, and Standing Order inventories.
Staging Area Items. Manage prices from products that have been shipped by the vendor but have not arrived at your warehouse.
Hard Goods Products. Manage the hard goods inventory.
Inventory in Units. View and manage the unit inventory of existing products.
Future Inventory. View and manage products from the future inventory. The inventory prices will be based on either the price list or the price assigned in the PO for future sales.
Enter the product line prices according to the type you are setting.
Vendor Availability and K2K Pricing
Vendor Availability and K2K product prices are managed on the same screen. To manage the prices of products in this inventories, do the following instructions:
Go to Inventory and select Add Inventory.
Click on Vendor Units Availability.
Click on Available Items.
Make the desired changes.
E-Commerce Pricing
The system will automatically set product prices in the E-Commerce depending on several factors, such as:
Customer Settings.
Company Settings.
E-Commerce Settings.
Inventory type.
Price setup.
Markups.
Additional charges.
Price Lists.
Massively Update Prices
When you want to update multiple product’s prices, you can do a mass update in the inventory. You can select products to make a limited update, or you can update every product in your inventory. Select the inventory you want to update to go to the instructions:
Markups and Other Charges for Specific Customers
Markups and additional charges are price modifiers set at the customer level. They can add or subtract from the price and be set in percentage or amount. There are three types of Markups:
Sell-Fast. This markup is usually a discount that vendors use to promote products that must be sold as soon as possible. It applies to Open Market Boxes.
E-Commerce. This markup applies to products sold through e-commerce and to all inventory types.
Price B Markup. This markup applies to Type B Customers. It applies to Open Market and Future Sales inventories. It does not apply to if there is an E-Commerce Markup.
Configure Markups and Other Charges
To configure markups for a customer, do the following steps:
Go to Setup and select Customers.
Search the customer and click on Edit from the actions column.
Click on the Advanced link in the customer information setup tab.
Enter the charges you want to apply.
Click on Save.
Price Lists
Managing product information and prices can be challenging, but Komet Sales simplifies it for you. Our platform provides various features that enable you to add and manage your pricing with price lists where you can update product prices, box dimensions, and costs quickly and efficiently. If you want to learn more about price lists in Komet Sales, go to Using Price Lists.
Salesperson Settings
You can enable a few settings for your sales users that will modify how they experience prices and costs in Komet Sales. You can use these settings to customize your users' permissions:
Allow to Modify Other Charges in Pricing Screens. Enable the user to modify the Other Charges field in the pricing screens.
User can Decrease the Price of an Item by. Set a percentage that your sellers can use to apply markups or discounts at the moment of adding products to an order.
Allow Price Changes on Purchased Items. Enable the user to modify product prices even after they’ve been added to a Purchase Order.
Hide Prices & Costs. Hide the price and cost information on all the screens where users can normally visualize this information.
Manage Salesperson Settings
To enable or disable these settings, do the following instructions:
Go to Setup and select Users.
Search the user you are modifying.
Click on Edit from the Actions column.
Click on the Options tab.
Check the settings you want to activate or deactivate.
Click on Save.
Free on Board (FOB)
Free on Board (FOB), in Komet, represents the final price that includes the combined charges per unit (Stem or Bunch) of the product being sold, which can be made up of Fuel Surcharge Per Box according to the Port of Origin, Outbound Freight calculated based on Rate per Cube, and the Outbound Freight Fuel Surcharge.
The only setting that affects this additional charge is at the customer level with the setting Show FOB Surcharge.
How is it calculated?
This charge is applied after adding other markups.
FOB Price = (Unit Price + Markup) + (Outbound Freight + Fuel Surcharge)
It is calculated with the following formula:
FOB Price / Unit = Unit Price + Fuel Surcharge / Unit + Outbound Freight / Unit
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