How to increase prices for your Products by a percentage
Several times we have been asked how to simply increase a base number by a percentage. Many customers have scenarios where they want to add factors for double-sided signs, painting, rush fees, difficult weeding, etc. ShopVOX lets you do this and you can do it for every item in the Bill of Materials (BOM) of a Product or just 2 of 10 elements you used in that Product template. It's your choice. This is called increasing base price. Once you know how to set this up, the situation works for anything requiring you to increase the base charge by a flat percent.
What is the Base Price?
"Base Price" is a concept where when you setup different elements in your Pricing templates (Materials/Labor/Machine).... you can mark these elements as part of "Base Price" that will be included is the final calculation of a pricing formula.
Why would you need this? Some times while pricing, you want to charge a % of certain elements of a Product formula. For example, if there is a "Rush Charge" and you would like to charge 25% extra of the "Base Price" elements in that Product.
Do I need to use "Base Price"? No. It is not necessary to setup any part of your calculations for a given Product as "Base Price" if you do not need this distinction.
What charges are included in the "Base Price"? Any Material/Labor/Machine charges you have flagged as part of "Base Price" and any Grid/Basic/Formula price that is used in a Product.
What is the PBase formula?
The problem is sometimes we want to charge the customer a percentage of some other charges. Hence we created a new formula called PBase (short for "Percentage Base Price") like area/perimeter etc.
You can see that in the drop down of formulas for Material/Labor/Machine rates like below there is a choice for PBase. If you select the formula to be PBase then there is a field just below this called Percentage of Base. This field will be the default percentage of base calculation.
Enter the default % of the Base Price you want this to be. You can over ride this % for different products when included in the template, this is just to define the default % that should be charged.
Now the question is, how do we know what charges constitute "Base Price"?To determine this, every element that you want to be part of the "Base Price", you need to check the flag, "Include In Base Price" as highlighted in the Materials/Labor/Machine rate definition below.
NOTE: MAKE SURE YOU DO NOT CHECK THIS FLAG IF YOU ARE GOING TO CH0OSE THE Formula FOR THIS TO BE PBase in the Formula drop down field, since these two are mutually exclusive. Otherwise, it will become a circular reference and the math won't work. If this charge is going to be part of the Base price then the formula cannot be PBase.
Now if you have three elements in your Pricing template, which will be part of the Base price:
- Material 1
- Material 2
- Labor 1
And there is another charge, for example "Upcharge" for an additional 50% of the Base Price; when the above elements of this Product template are used, then the math for these four elements will be as follows:
- Material 1 - $50
- Material 2 - $10
- Labor 1 - $50
Totaling - $110
Upcharge of 50% of base price - will equal - $55 (50% of the $110)
The Grand total is - $165.
How to increase price by a percentage
This will require that your product has “use template” checked. Using template opens up the materials, labors and machine rates to that product. We will ultimately use a labor to increase by a percent.
Edit the product and select this box if needed.
Decide what scenario you need.
For this example, we’ll use the scenario of double sided where I want to increase price by adding 80% of the single sided price of vinyl, laminate, labor but not the substrate.
First you’ll need to build a boolean attribute for “Double_Sided”. That way we will be able to have the checkbox to trigger a double-sided situation.
Go to Company menu > Pricing > Pricing Attributes and click "add new"
You’ll want to go to the product and make sure that this new attribute is included into the list of attributes in the template needing it. As you see, I’ve included it here for my Sign Panel product.
Setting base price.
There are 2 options to determine what shopVOX should consider to be base price.
- The product price
- The materials, labors and machine rates that could determine the base price.
Number 1 factors into play if you’ve entered a value in the price field for the product itself. You’ll be able to tell by referencing the product and looking in the price field to see if it has a value.
Number 2 allows you to dictate which items within a BOM should be considered as part of base price. This is very useful when you need to itemize what to increase within the total selling price.
You will set this flag up on each labor, machine or material that you feel should be considered. Do so by editing one of the above mentioned pricing items. To do this, select the following box as seen below:
Make sure you do this for each material, machine rate and/or labor that will be included in the Base Price calculation. The goal is to identify everything that should be increased by the desired percentage when you select, in this scenario, Double_sided
NOTE: If you have an amount in the selling price of the product (Number 1) and also items of the BOM marked 'Include in Base Price' (Number 2) then the Base Price will be a combination of those 2.
Build the pBase item.
You’ll now need to create the pBase item, that when triggered; will:
- Look for all Base Price items
- Tally them up
- and Generate an amount to be added to the overall price
This will then be added to the final price. Whew! It’s really easy to do though :)
To set this up, Go to:
Company menu > POS settings > Pricing > Labor rates > then add new.
Give this labor a name for the pBase item. In this case I called it “double sided scenario”. Use this image as a setup guide, making sure to enter the correct percentage to want to use. Click the save button when done.
Finish the template.
Now that you have the pBase item created with your desired percentage you need to add this labor to the Product template and use the Boolean attribute associated with it as a filter.
Company menu > POS settings > Pricing > Products and find your product.
Click on the Pricing Template link on the left.
In your Items to be charged list, add the newly created labor rate and paste the attribute, Double_sided; in the filter column.
That’s it. Now that you have these connections you can easily increase this sign panel by 80% on a selected set of BOMs in this Product.
Get on to pricing! How it works.
When you price with this Product, you’ll see your attribute called Double sided, which needs to be selected to apply.
Once you check the box and fill in the rest of the parameters and hit save, you'll see how your double_sided scenario works.
- First it looks for all base price items (identified with a star) that are selected "yes" as part of the Base price calculation.
- Then it will add that total up and any items using "pBase" as a formula
- It will then identify the total base price and calculate the percentage to add to the overall bill.
In this case 80% of $81.03 is $64.82 added to the overall price for being double sided. For a Grand total of $145.85