Pricing Methods: Standard, Product, and Cost Plus Pricing

Tyler MacDonald Updated by Tyler MacDonald

shopVOX provides users with a range of pricing methods tailored to suit diverse business requirements. Upon logging into your shopVOX account for the first time, the system is configured to employ Standard Pricing mode as the default setting. However, upon request, either your designated Coach or the Billing department can activate alternative pricing methods such as Product Pricing or Cost+ Pricing. Each of these methods offers distinct strategies for accurately pricing your products:

  1. Standard Pricing Mode: This is the default setting in shopVOX. It allows users to set up pricing templates based on material, labor, and machinery costs, with customizable markups for each component. Standard Pricing provides flexibility and control, enabling businesses to adjust pricing strategies based on specific project requirements and market conditions.
  2. Product Pricing: With Product Pricing, users can establish fixed prices for their products regardless of the individual components selected. This method is ideal for businesses offering standardized products with predetermined prices, simplifying the quoting process and providing consistency for both the seller and the customer. Product Pricing ensures uniformity and predictability in pricing, streamlining operations and enhancing customer experience.
  3. Cost+ Pricing: Cost+ Pricing calculates the selling price of a product by adding a markup to the total cost of all components, including materials, labor, and machinery. This method allows businesses to ensure profitability by incorporating desired profit margins into the pricing structure. Cost+ Pricing is suitable for businesses seeking to recover costs and achieve specific profit targets while maintaining transparency and competitiveness in the market.

Switch between Pricing Methods

To switch between pricing methods in shopVOX, follow these simple steps:

  1. Navigate to Product Configuration: Go to any product within your shopVOX account.
  2. Access Pricing Settings: Once on the product page, locate and click on the "Configure Pricing" tab or section. This tab is where you can adjust pricing settings for the selected product.
  3. Select Pricing Method: Within the Pricing tab, you'll find a dropdown menu labeled "Pricing Method." Click on this dropdown menu to reveal the available pricing options.
  4. Choose Pricing Method: From the dropdown menu, select the desired pricing method based on your requirements. The available options typically include "Standard," "Product Price," and "Cost Plus."

Exploring the Various Pricing Methods

Standard Pricing:

Standard Pricing, the default method in shopVOX, offers a balance between Cost+ and Product Pricing. With this method, businesses can set rates for materials, labor, and machinery, with the final price calculated based on these rates and the specified markups. Unlike Cost+, Standard Pricing enables businesses to tailor markups for individual components, providing greater control over pricing strategies.

  1. For this example, Turn on "Product Template"
  2. Ensure your Product Pricing Method is set to "Standard"
  3. Add in your modifiers and drop down menus. In this example my drop-down menus contain materials that have Cost, Markup, and Price setup
  4. Use this product in a transaction. From a quote add in the Product, and fill in the Width and Height, and pick your materials
  5. Click on "Pricing Breakdown" to see the "Standard Pricing" method applied
  6. In this example, the materials selected have a Cost, Markup, and Final Price per Square Foot being sold to the customer

The Standard Pricing Method enables you to comprehensively factor in the costs of labor, machinery, and materials, including their respective markups. This ensures that the selling price to your customer is not only competitive but also yields a profitable margin.

Product Pricing

Product Pricing involves setting a fixed price for an item irrespective of the specific components chosen. This method is particularly common in industries where customers can customize products by selecting various components. The fixed price remains consistent regardless of the choices made, providing simplicity and predictability for both the seller and the buyer.

  1. For this example, Turn on "Product Template"
  2. Ensure your Product Pricing Method is set to "Product Price"
  3. Because we are using the Product Pricing Method, we need to enter in a Price for the Product. For this example I am using $20.00 Each. This means that no matter what the Width, Height, or Materials the Price will always come out to $20.00
  4. Add in your modifiers and drop down menus. In this example my drop-down menus contain materials that have Cost, Markup, and Price setup
  5. Use this product in a transaction. From a quote add in the Product, and fill in the Width and Height, and pick your materials. Notice that the Price remains at $20.00. This means that no matter what the Width, Height, or Materials the Price will always come out to $20.00
In shopVOX, when a product is defined with the Pricing Type set to "Template" and the Price By set to "Product Price," the fixed price overrides any variations in component costs. This allows businesses to offer a standard price for a product while retaining flexibility in component selection.

Cost+ Pricing

Cost+ pricing, a long-standing method, calculates the price of an item by starting with the total cost of all components (material, labor, machinery) and adding a predetermined markup to ensure a desired profit margin. This method allows businesses to set prices based on both production costs and desired profitability.

For example, if the total cost of components amounts to $100 and a 50% markup is applied, the selling price would be ($100 + 50% of $100), resulting in a selling price of $150. In essence, Cost+ pricing ensures that the selling price reflects both the production cost and the desired profit margin.

  1. For this example, Turn on "Product Template"
  2. Ensure your Product Pricing Method is set to "Cost Plus", and enter the markup. For this Example I am using a Markup of 150.
  3. Add in your modifiers and drop down menus. In this example my drop-down menus contain materials that have Cost, Markup, and Price setup
  4. Use this product in a transaction. From a quote add in the Product, and fill in the Width and Height, and pick your materials. Notice that the Price will be the Cost + the Cost x 150
  5. In this Example. Unit Cost is $83.07. Markup is $124.61 ( 150%). Add the two values together $83.07(Cost) +$124.61 ( Markup of %150) = $207.68
  6. Expand "Pricing Breakdown" to see the details.

In summary, while Cost+ Pricing emphasizes cost recovery and profitability, Product Pricing offers simplicity and consistency, and Standard Pricing provides flexibility and control over pricing structures. Each method serves different business needs, catering to a variety of pricing strategies within the shopVOX platform.

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