Understanding Base Pricing Setting Up Pricing Information by Ayman Refat - March 13, 2018March 13, 20180 Understanding Base Pricing Concept You can set up multiple base prices for items. The different prices can contain different characteristics. For example, if customers purchase more than 100 units of an item, they might receive a discount on the unit price. Procedure In this topic, you will learn the characteristics of prices and the search sequence for price retrieval. Step Action You can set up pricing at these three levels: • Item • Item Branch • Item Branch/Location/Lot You define the pricing level for each item in the Item Master table (F4101). This table shows an example of the three different pricing levels for a bicycle. The Item Only level enables the price to be applied throughout the organization. All customers who order a bicycle will pay 220.00 EUR. The Item/Branch Only level enables some flexibility in pricing. You can set up different prices at different branches based on demographics, geography, weather, and so on. A customer who orders a bicycle from: • Branch 20 will pay 250.00 EUR. • Branch 30 will pay 220.00 EUR. • Branch 40 will pay 235.00 EUR. The Item/Branch/Location/Lot level enables even more flexibility in pricing. You can price items down to the actual location or lot within a branch/plant based on the material costs when the different lots were produced. Therefore, you pass on the cost of the specific lot to your customer. A customer who orders a bicycle from Branch 30 in: • Primary location will pay 220.00 EUR. • Secondary location 1 will pay 225.00 EUR. • Secondary location 2 will pay 218.00 EUR. Step Action This diagram illustrates the sequence in which the system retrieves the pricing for a sales order. 1. Manually entered price. The price is entered at the time of sales order entry and overrides all other pricing. 2. Trade discount for customer. A trade discount is: • Calculated as a flat percentage on each order line. • Entered in the customer billing information or in the sales order header. 3. Contract price for customer or customer group. A contract price is: • Agreed upon between you and the customer for a specified period of time. • Identified by Short Item Number/Identifier = C or the contract name. • Specified with a blank value in the Pricing Method field. • Attached to an inventory pricing rule by customer or customer group. You set up a contract price to guarantee a price for a specified item quantity by customer or customer group. 4. Pricing rules for customer or customer group. You can set up different prices for the same item. Pricing rules can be set up for: • A specific price per quantity of an item or group of items • An item • An item group For example, you sell hardware to both wholesale and retail customers. You charge each customer type a different price for a standard hammer: • 4.00 USD for wholesale customers • 8.00 USD for retail customers 5. Base price, which is set up in the Base Price table (F4016). After you enter a sales order, the system also determines whether basket or order level repricing is applicable. If you do not enter a price on a sales order, or if the system is unable to retrieve the price, the system issues a warning and applies a price of zero. Step Action For the system to apply base prices on sales orders, you must: 1. Set up item information. 2. Set up customer information. 3. Define preference hierarchy 51. 4. Enter the base price. In summary, base prices define the standard pricing for your items on sales orders. Pricing is flexible and enables you to use item price groups to categorize items and price them the same way, and customer price groups to categorize customers to eliminate pricing maintenance for individual customers. End of Procedure.