Cost-based Pricing in Salesforce (Mark-up & Margin)

When sales users waste time trying to figure out a price for a product because you sell based on a mark-up applied to a cost or margin to achieve from a sales price, use Flexpricer’s Cost-based Pricing in Salesforce to improve efficiency and accuracy.

Define the default cost of a Product either on the Product record or the PricebookEntry
Specify either a cost mark-up percentage or a sales price margin percentage on an Opportunity Product or Quote Line Item
Automatically calculate the correct Sales Price depending on whether the percentage is as a mark-up or a margin.

And to help transparency, you can show users the total gross profit (cash) and gross margin (percentage) achieved on every line item as well as the opportunity/quote total.

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What is Cost-based Pricing in Salesforce and why is it useful?

In Sales Cloud, you select a Product using a basic interface to add it to a Quote or Opportunity.

There is no flexibility to automatically allocate a cost and either mark-up or margin to achieve and see the effect of making changes to the percentage or cost in real-time.

Flexpricer extends Sales Cloud with out-of-the-box Cost-based Pricing CPQ functionality that allows you to define your product Sales Prices by applying a mark-up to its cost or by defining the margin to achieve based on the cost.

Calculations occur in real-time and the experience of editing a mark-up or margin is exactly the same as editing a Sales Price. No additional training or mistakes because the user accidentally treats a margin as a mark-up – the effect of applying any new percentage is visible immediately.

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Cost+ Pricing: Mark-up or Margin

If your users don’t know the difference between mark-up and margin, and they are responsible for performing the calculation, your customers could experience wildly varying prices.

Flexpricer’s Cost-based Pricing offers…

Product Mark-up to apply a percentage to a cost to achieve a sales price – e.g. $1,000 product cost plus mark-up of 50% = $1,500 sales price
Product Margin to set a percentage difference between the sales price and cost – e.g. $1,000 product cost with margin of 50% = $2,000 sales price
And with appropriate permissions, discounts can be applied to the calculated sales price

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Know Your Percentages

When calculating prices using costs and percentages, it’s important to know the parameters to work within.

You can’t have more than 100% margin when pricing product. 100% margin is achieved when there is no cost.
You can have more than 100% mark-up when selling a product. 100% mark-up is achieved by doubling the price.
A 100% mark-up achieves a 50% margin.

Contracted Price record in Salesforce showing Parent Account checkbox

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Additional Contracted Price Controls

When Contracted Prices are used, you may not want to give the sales user permission to apply any further discounts or amend the price that’s been negotiated.

As well as having expiry dates, Contracted Price records also include checkboxes to

Prevent the Sales Price of the line item from being edited
Prevent the Discount of the line item from being edited

Contracted Pricing can now also be extended to include volume pricing using Contracted Volume Price records.

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Cost-based Pricing is commonly used by companies who mark-up their costs rather than set defined sales prices, so that they can maintain their margin even when costs fluctuate

Contracted Pricing in Salesforce – what is it?

It’s an out-of-the-box feature provided by the AppExchange App, Flexpricer, that allows Salesforce users to specify a price to be used for a product when it is added to an opportunity or quote for a given Account.

Available options to further enhance the capability include controlling price changes and discounts, applying Contracted Volume Prices and expiring the price on a given date.

Does Contracted Pricing support multi-currency?

Yes! Flexpricer supports Salesforce multi-currency and honors all standard Sales Cloud behavior related to products, pricebooks and pricebookentries.

If you org is multi-currency enabled, when the Contracted Price record matches the currency of the opportunity, it will be automatically applied (e.g. if the Contracted Price record is in USD, then it will be used on an Opportunity/Quote that is USD).

How else can Contracted Pricing benefit my business?

Administrators can configure a powerful, systemized approach of pricing oversight with simple flows and processes that automate the creation and expiry of Contracted Price records as well as…

Automatically applying price increases to Contracted Price records
Creating Contracted Volume Price records to apply customer-specific quantity-based pricing
Sharing Contracted Price information to customers in PDF or CSV format using Account Price List

Learn More About Cost-based Pricing in Salesforce and Book a Call Today

Find out more about Flexpricer and Cost-based Pricing, talk through your use case with an expert in a FREE discovery call.

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Cost-based Pricing in Salesforce (Mark-up & Margin)

What is Cost-based Pricing in Salesforce and why is it useful?

Cost+ Pricing: Mark-up or Margin

Know Your Percentages

Additional Contracted Price Controls

Cost-based Pricing is commonly used by companies who mark-up their costs rather than set defined sales prices, so that they can maintain their margin even when costs fluctuate

Contracted Pricing in Salesforce – what is it?

Does Contracted Pricing support multi-currency?

How else can Contracted Pricing benefit my business?

Learn More About Cost-based Pricing in Salesforce and Book a Call Today