Assigning Rank in Product Velocity Pricing

Use product velocity pricing to build matrix cells based on product ranking. With velocity pricing, sale prices update to reflect changes in a product's rank. For example, slower moving products have a higher carrying cost, so set up velocity pricing to charge more for low-ranking products. When customers regularly buy one of your slow-moving products, the product's rank increases. Velocity pricing then decreases the product's price as the product's rank increases.

Product velocity pricing can achieve the following:

• Ensures that up-to-date product performance information is used to set pricing policy.

• Fine tunes pricing for products of different ranks.

• Minimizes the number of matrix cells needed for pricing.

Product velocity pricing and product ranking work together to change the price as product rank changes over time, as follows:

• Product additional velocity pricing – The system adds a formula to each progressive sell matrix cell that increases the price as the products rank falls.

• Product alternate velocity pricing – The system changes the formula on the original sell matrix, including formulas for quantity breaks, based on the product rank. For each customer/product matrix cell, you can set up alternate velocity pricing for either a customer or product, but not both. Alternate velocity pricing overrides additional velocity pricing.

Product rank in velocity pricing is affected by the following control maintenance records:

• Default Rank for Velocity Pricing – Defines which rank the system should use if the product does not have a rank for the pricing branch of an order.

• Use Central Warehouse Branch Rank If No Pricing Branch Rank – Determines if the system should use the item rank of the Central Warehouse branch (parent branch) rather than the child branch. The default is Yes.

This page contains the following procedures:

• Displaying the appropriate velocity pricing screen.

• Applying product additional velocity pricing.

• Applying product alternate velocity pricing.

To display the velocity pricing screen:

1. From the Files > Price Maintenance menu, select Sell Matrix to display the Sell Matrix Maintenance screen.

2. Enter the necessary information to display the sell matrix you want to use.

3. Use the Velocity Pricing hot key to display the Velocity Pricing selection screen.

4. Select one of the following:

• Product Additional – Displays the Product Velocity Pricing screen. Continue with the additional velocity pricing procedure.

• Product Alternate – Displays the Product Velocity Pricing - Alternate screen. Continue with the alternate velocity pricing procedure.

To apply product additional velocity pricing:

1. In the Rank # field on the Product Velocity Pricing screen, enter the number of a product ranking method. Products are ranked A through H. Ranking methods use numbers 1 through 5.

Note:  View the product ranks on the Product Maintenance Ranking screen (Files > Product > Prices hot key > Ranks hot key).

2. In the Additional Formula field, enter the formula that applies to the matrix for each rank to lower or raise the price according to the profitability of the product.

For example, you might adjust pricing on these ranked products as follows:

Note: If both customer and product velocity formulas are assigned to a matrix cell, the system combines the additional formula from each screen to calculate a selling price.

Note: A constant dollar value ($) in the Basis field on the Sell Matrix Maintenance screen overrides product velocity pricing.

3. Press Esc to save your changes and exit the screen.

To apply product alternate velocity pricing:

1. In the Rank # field on the Product Velocity Pricing - Alternate screen, enter the number of a product ranking method. Ranking methods are numbered 1 through 5. Products are ranked A through H.

Note: Use the Ranking hot key to view current product ranks.

2. In the Basis column for each rank (A through H), enter the basis for determining the selling price.

3. In the Formula column for each rank (A through H), enter the formula to use with the basis for determining the selling price.

For example, you might replace the pricing for a Rank #1 product as follows:

Note: Use the < and > keys to scroll left or right through the breaks.

4. Press Esc to save your changes and return to the Sell Matrix Maintenance screen.

Alternate velocity pricing entries replace the original matrix cell's pricing set up when a customer places an order for the ranked product.

See Also:

Changing Product Ranking

Pricing Basis Fundamentals

Assigning Rank in Customer Velocity Pricing

Creating Individual Matrix Cells