Volume Pricing in Salesforce CRM

Volume Pricing in Salesforce CRM

What is it?

Volume Pricing in Salesforce changes the final price of a product based on the quantity purchased. Typically used to offer a lower unit price as the order quantity increases.

Why do I need Volume Pricing in Salesforce?

Standard Salesforce Products and Price Books functionality does not offer volume pricing. So, your sales team cannot have pre-prepared, consistent set of price adjustments – tailored per product – using standard functionality.

How do I get it?

There are 3 ways to add volume pricing to Salesforce

If you have Enterprise Edition or above, you can undertake custom development to build this functionality. This approach can be expensive and introduce risk as you try to craft a solution around the many hidden considerations of the way products and pricebooks work in Salesforce.
Approach your Salesforce Account Executive for suggestions of large, complex CPQ solutions that will accommodate almost any possible pricing challenge you can throw at them. Note that as well as license fees – which will typically be a minimum of $9,000 a year (based on Salesforce CPQ published entry-level pricing at $75/user/mo with a minimum of 10 users) – you will need to consider implementation costs which can be substantial.
Visit AppExchange and try Flexpricer CPQ for Salesforce. The app has matured with over 4 years of consistent development and includes 4 different volume pricing models. It’s quick to install, easy to use and 100% free to verify that it meets your needs.

Simple volume pricing example

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Different Models for Volume Pricing in Salesforce

Not all volume pricing in Salesforce is the same. There are different ways to apply volume pricing to the price of a product.

Flexpricer supports 4 different volume pricing models to update the final price of a product based on the quantity selected.

Volume Prices

Set a new Sales Price for a product based on the selected quantity

Volume Discounts

A discount percentage applied to a product based on a quantity

RECOMMENDED FOR PROTECTING PROFITS

Quantity Breaks

Gradually apply a discount to a product between quantities

Account Pricing

Apply Volume Prices or Discounts that are specific to an Account

Try Flexpricer and start benefiting from its strategies today. Yes, today!

Bigger, more complex CPQs need massive expertise and weeks or months of configuration. Not Flexpricer!

Volume Prices Model

The use of the word ‘Price’ is important in this model. In Salesforce, the Sales Price of a product can be changed to be higher or lower than the list price (i.e. the price that’s specified in the pricebook).

When adjusting the Sales Price based on quantity, you can not only decrease the price – effectively giving a discount – but you can increase too.

In some business scenarios, the price of products can increase as you appeal to different markets. For example, certain companies may offer a low price for a product for low quantities – making to accessible to smaller businesses – but then increase the price as quantities increase.

Using Volume Prices this is possible, because the Sales Price of the product is adjusted based on the quantity.

Dice showing percentage symbol

Volume Discount Model

The use of the word ‘Discount’ is important in this model. In Salesforce, a discount is applied to the Sales Price of a product in order to reduce the total value of a line item.

The discount is limited and controlled by Salesforce to be in the range 0-100%. You cannot have a discount more than 100% or less than 0%.

Comparing Volume Prices with Volume Discounts, you can see that Discounts can only be used to lower a final price whereas Prices can be used to increase a final price.

Volume Discounts are also useful when working with multiple currencies. If you wish to offer a 10% discount for a product, that discount couple apply irrespective of currency. So, provided that you ware lowering the final price, then rather than creating a separate Sales Price in each currency, a single Discount could be applied irrespective of currency.

Volume Discounts will only ever reduce the final selling price of a product.

Quantity Price Breaks Model

Quantity Price Breaks introduce a little complexity to the calculation of a Volume Discount.

Whilst Volume Discounts apply a discount to the total quantity, Quantity Breaks apply a discount between certain quantities.

As an example, you may have a scenario that you never want to discount the first 10 of your product – so quantities 1-10 will always be at your normal price. However, you are prepared to offer a discount of 5% on each unit above 10 (i.e. the first 10 are at full price, the 11th and above have a 5% discount).

Using Quantity Breaks, if the product were priced at $1,000, an order of 10 would be $10,000. An order of 11 would be $10,950 (10 x $1000 + 1 x $950).
Using Volume Discounts, with 5% discount at a quantity of 10, then an order of 11 would be $10,450 (11 x $950).

The effect of Quantity Breaks are to protect and preserve your profits since you are only discounting the products above a certain quantity.

Account Pricing Model

Bespoke Account Volume Pricing allows you to specify Volume Prices on a per-Account basis.

This means that you can tailor your volume prices specifically to an Account, if you wish to offer highly bespoke pricing to that customer.

Try Flexpricer and start benefiting from its strategies today. Yes, today!

Bigger, more complex CPQs need massive expertise and weeks or months of configuration. Not Flexpricer!