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HI All,
What are the Pros & Cons of each pricing method and what are the right questions to ask when deciding on which to use.
We were using % of List and some of our Inventory was moved to Currency Amount - which caused some issues. We also use Multi Currency
I can't recommend one specifically since that is a business decision however %markup options tend to work well for this type of need. You could then adjust via a percentage increase between the two price levels. Again though this one is a business decision.
Below is the Different Price methods. It isn't so much that each has different pro's and con's but that each method calculates differently and can serve a bit of a difference purpose depending on the item. For example lets say the purchase price fluctuates wildly for item X you might want to use a %markup method to ensure that you are always selling at 200%. Now lets say item Y has been the same price for years and is not expected to change, in that case you may just want to use Currency Amount.
The following table explains how each price method calculates prices.
Price method
Equation and description
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Currency Amount
Flat amount
Enter a flat currency amount for each unit of measure in the price list.
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% of List Price
List price x price percentage
For each unit of measure, enter a percentage of the item’s list price that’s used to calculate prices. For example, the distributor’s list price for a single can is $0.20, and you want to sell single cans at 250% of list. All single cans are sold at $0.50 (250% x $0.20). You can specify a different list price for each currency, if needed.
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% Markup–Current Cost
Current cost x (100% + price percentage)
Enter a percentage based on the current cost of each unit of measure. Each time you receive a shipment of an item, the price being charged for the item changes according to the item’s current cost when it was received. For example, the current cost for single cans is routinely updated each time you receive a shipment. If you enter 150% as the price for Can, the price for single cans will always be 250% (100% + 150%) more than you paid for your last shipment.
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% Margin–Current Cost
Current cost + [(current cost x price percentage)/(100% - price percentage)]
Enter the profit percentage you want to achieve, based on the current cost of the item being sold. Each time you receive a shipment, the current cost for the item is updated and the price changes accordingly. For example, suppose you’ve entered a profit of 25%. The price for single cans will always be 25% more than the current cost.
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% Markup–Standard Cost
Standard cost x (100% + price percentage)
The prices you charge for each unit of measure are updated only when you update the standard cost. Because the standard cost is updated periodically, the standard cost doesn’t always match the amount you most recently paid for an item. For example, if you enter 150% as the price for a single can, the price for single cans will always be 250% (100%+ 150%) more than the standard cost.
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% Margin–Standard Cost
Standard cost + [(standard cost x price percentage)/(100% -price percentage)]
The profit percentage you want to achieve is entered, based on the standard cost. Each time the standard cost is updated, the price changes, as well. For example, suppose you’ve entered a profit of 25%. The price for single cans will always be 25% more than the standard cost.
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