Understanding category rates

Category Rates

When setting up a category you can set a rate at which the product or service will be sold. The "rate" consists of two components: "rate type" and "rate value". These two values work together to calculate the category price that users see in the order screen.

Category rate structures are set in the General section of the category detail screen. See sample below. 

Category_Rate_Type_DD.png

 

Rate Types and their Rate Values

The Rate Type is a drop-down list from which you select the type of pricing structure you need. The Rate Val field (rate value) holds the value that works with the Rate Type when calculating the final default selling price. There are four choices for Rate Type.

Fixed Price
This selection sets the Rate Value as-is. For example, selecting a Rate Type of Fixed Price and entering 100.00 for a Rate Value will set a default price of 100.00. The default price will not change unless you change it manually.

 

Fixed Mark Up
This selection will set the default price by marking up the Estimated Unit Cost by the Rate Value entered. For example, if the Estimated Unit Cost is 25.00 and the Rate Value is 100.00, then the default price will be 125.00. If costs change, the default price will always be the Estimated Unit Cost plus the markup amount stated in Rate Value.

Formula: Unit Cost + Rate Value = Default Price Rate

 

Mark Up %
This selection will set the default price by marking up the Estimated Unit Cost by the stated Rate Value percentageFor example, if the Estimated Unit Cost is 25.00 and the Rate Value is 10%, then the default price will be 27.50. If costs change, the default price will automatically adjust to maintain the stated markup percentage.

Formula: (Unit Cost  * Rate Value ) + Unit Cost = Default Price Rate 

 

Margin %
This selection will set the default price to a level which maintains the profit margin stated by the Rate Value percentage. For example, if the Estimated Unit Cost is 25.00 and Rate Value is 40%, the default price will be 41.67. If costs change, the default price will automatically adjust to maintain the stated gross profit margin. 

Formula: Unit Cost  /  ( 1 -  Rate Value % ) = Default Price Rate

 

For more information on Categories, see the links below.

See Also

Working with volume discounts

Entering Categories

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