How to setup pricing based on a markup of cost
In Inventory Control / Items and Price Lists / Item Pricing, bring up an item number and click on New to create a new price list for the item, or click Open to edit an existing price list. Go to the Discounts tab and set the 'Selling Price based on' field to one of the following selections:
- Markup on Markup Cost: the markup cost for the item must be entered on the Prices tab.
- Markup on Standard, Most Recent, Average, Last Unit or Alternate Amount 1 or 2 Costs.
- For whichever cost is being marked up, the Discount can be set by percentage or amount, and price determined by Customer Type or Volume. The 5-level grid needs to be filled in for these calculations to be effective. Rounding for the price can be set to none, or rounding up or down.
When an order is placed for the item, the base price from the Prices tab will be defaulted on the order, however, using the finder in the unit price field will display the calculated values for the five levels of markup.
Special note needs to be mentioned for Markup on Markup Cost. There are three fields on the Prices tab:
- Markup Cost - enter the cost here to be used in the Selling Price calculation
- Markup Factor - this value is NOT used to calculate the Selling Price. It is used as a reference field only specifically in the Markup Analysis Report.
- Markup Unit - this is for the item units in which the markup cost is expressed.
The Markup Analysis Report is found in Inventory Control / I/C Price/Sales Analysis Reports. This report lists each item where the base price varies from a desired selling price by more than the percentage specified for the report. The desired selling price is calculated using the Markup Factor specified on the Prices tab of Item Pricing multiplied by the cost specified on the report criteria. Therefore, this report is an effective analysis tool regardless of whether or not pricing based on markup costs is used.