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Pricing

Pricing

Pricing refers to the prices listed in the Product Catalogue. Each product may have multiple prices, along with detailed terms and conditions for more advanced pricing strategies.

THE ESSENTIALS

To begin with, let’s take a quick look at some pricing terminology.

Pricing Models

The Price Model defines the structure of a product price and it shows how much the contact will be charged, based on the quantity of items ordered. Four models are supported:

  • Flat - A product is charged at a fixed price per unit

Example:

A hardware shop sells cables at the price of €20 each.

- The total cost of cables is X times €20, where X is the quantity of cables purchased

1) A contact orders 2 cables, the final price is 2 * €20

  • Tiered - Tiered pricing is a progressive model where a number of prices are set for a product, each price for a unique range of quantities. With this model, the price per unit decreases as the quantity of ordered items increases.

Example:

A hardware shop sells Set Top Boxes with tiered pricing:

- For units 1 to 3, the price is €99 per unit

- For units 4 to 6, the price is €89 per unit

- For units 7 and above, the price is €59 per unit

1) If a contact orders 2 Set Top Boxes, the final price is 2 * €99 since the ordered quantity falls within the first tier only

2) If a contact orders 5 Set Top Boxes, then the first 3 will be charged at the price of €99 and the remaining 2 at the price of €89 each, so the final price is 3*€99 + 2*€89

3) Similarly, if contact orders 10 units, the final price is calculated as 3*€99 + 3*€89 + 4*€59

  • Volume - Multiple price ranges per unit are defined in this model as well; however, when pricing is applied, a single tier (and, therefore a single price) is applied based on the number of ordered items.

Example:

Let’s change the model of the above example into Volume pricing and see the differences. A hardware shop sells Set Top Boxes with volume pricing:

- For 1 to 3 units, the price is €99 per unit

- For 4 to 6 units, the price is €89 per unit

- For 7 units or more, the price is €59 per unit

1) If a contact buys 2 Set Top Boxes, the final price is 2 * €99 since the quantity falls within the first tier.

2) If a contact purchases 5 Set Top Boxes, the price of the second tier is selected and therefore, the cost is 5 * €89

3) Similarly, if a contact orders 10 units, the cost is 10 * €59.

  • Stairstep - Another model in which multiple ranges are set up but contacts are charged a flat fee, based on the range their ordered items quantity falls into (no multiplications applied).

Example:

A software company provides support services ubased on the number of users.

- From 1 to 10, the price is €50

- From 11 to 30, the price is €100

- For 31 and over, the price is €200

1) If the service is purchased for 5 users, the client pays £50.

2) If the service is purchased for 20 users, the price is £100

3) If the service is purchased for 100 users, the price is £200.

As you can see, there’s no multiplication by the number of users.

Price Terms

Price Terms are available only for products classified as Termed or One-time Services and they state the service's billing behaviour and contractual conditions, such as how often the service will be billed, auto-renewal settings, trial and contract periods and finally its billing model.

Usage Allowance

Usage Allowance determines two things; which usage services a contact can consume and, optionally, a usage limit, i.e. how much can be consumed and once the limit is reached, then no further consumption is allowed. Allowance can be specified only in prices for Termed and One-time services.

Managing Pricing

To view or manage a product’s pricing, navigate to Commerce > Products using the main menu on the left-hand side of the page, select the product in question, and then select the Pricing tab.

Defining Product Prices

To add a new price for a product, select Add Price from the Pricing tab on the Product page. Depending on the product’s classification, price settings may vary.

  • Start by selecting the Pricing Model.

  • Set the price’s monetary value. If Tiered, Volume or Stairstep model is selected, then set up multiple prices, one for each required range. If your business accepts payments in multiple currencies, then add the price in each one of the enabled currencies.

  • Optionally provide a Label for a price to differentiate between other prices for the same product and assist used from selecting the correct one.

  • Activate the Default toggle if the price should serve as the default price when a product has multiple prices. This default price acts as the base price and will be showcased when the product is listed and also guarantees precise pricing when no price can be applied during invoicing.

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Multiple product prices with labels

  • The Taxation model defines whether the specified price includes taxes or not. Your Business’s taxation model will be set by default, but you can override it for a specific product price.

  • Price is for Sale or Rental - Use this option to define the price of a traceable physical goods product, whether it's paid in full (one-off), via a pay-to-own plan, or as a rental. If a Sale price is selected, the user can optionally choose an Order Queue (configured as a device plan queue) where milestones define staged payments for gradual ownership. If a Rental price is selected, the user must also specify the service expense to be charged and how frequently Contacts will be billed.

Example:

Apply a rental fee of €5.99 per month for renting a Set Top Box device.

  • Price when sold as part of a bundle. Use this setting when you want to differentiate the price of a product when this is sold as part of a Flexible Bundle.

Example:

1) Cables are sold at the price of €9.99 when sold as part of an Installation Kit, but when sold individually, the price goes up to €11.99

2) The price of the Cables is €5.99 when sold as part of an Advanced Installation Kit

3) The price of cables when sold individually is €11.99

Price Terms

Configure the price terms for Termed or One-time Services.

Multiple prices can be set up for services, with each price having a unique set of price terms. During the ordering flow, contacts do not just select the service to subscriber, but they can also also select one of the available price terms.

 

Price Terms

  • Billing Period - How often the service will be billed, i.e. its billing cycle duration.

  • Termed Period - The service’s termed period duration is specified in a number of billing cycles.

  • At the end of the termed period, the service is - Select whether the service will either be automatically renewed for one more period or will expire.

  • Contract Period - The duration of the service contract (if applicable)

  • Trial Period - Set the trial period for the service (if any); the service’s billing cycle will start at the end of the trial period

  • Billing Method - Specify if the service will be billed on a pre-bill or post-bill basis

Advanced Options

This set of pricing settings is optional, but it can be used to adopt complex pricing strategies, such as setting up multiple prices when operating in multiple countries and special Contact pricing.

Advanced Pricing Options

  • Countries - If the Business operates on an international scale, it’s possible to configure pricing based on the Contact’s Country of Agreement

  • Supply Method - Differentiate product prices based on how the product will be provided to the Contact, e.g. apply a different price for delivery, and another for pick-up supply methods

  • Groups - Refers to Groups of Contacts, represented by either a Segment or by selecting Specific Contacts. Use this setting to apply special pricing to specific groups of Contacts.

  • Sales Model - Set up different prices for Wholesale and Retail sales models, as well as any other configured Sales Model that the Business supports.

Allowance

From the Product page, select the Allowance option to define which products can be consumed and optionally, restrictions on how much can be consumed. This option is available only for Termed and One-time services as contact can consume usage only when they subscribe to such services.

  • The allowance can be defined as Cash or as a Usage amount

  • The allowed products to be consumed can be usage services and/or non-traceable physical goods

  • Accumulated allowance includes Cash limits among all products that can be consumed.

  • Each allowance setting has three main restrictions:

    • Per Transaction, i.e. each time usage is consumed

    • Per Day that includes usage that can be consumed within a calendar day or

    • Per Billing Cycle that shows maximum usage that can be consumed within a termed/one-time services billing cycle.

  • Additional restrictions can be specified in terms of where the usage can be consumed, and this is represented by specifying Organisations (merchants/venues or service providers/service points)

Pricing Settings

There are no settings as such for product pricing; however, since the pricing model of a product is determined by the product configuration, it’s worth referencing the settings in the Product Catalogue manual.

Reference Material

You may also find it useful to refer to the following manuals for further reading in relation to Pricing.

Products

Product Catalogue

Order Catalogue

Orders

Subscriptions

Subscriptions

Contacts

Contacts

 

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