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xTuple Wholesale Distribution Product Guide |
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xTuple Wholesale Distribution Product Guide |
| 9. Industry Standard Margin Calculations | ||
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 | Chapter 2. Order Processing |  |
Cost plus pricing is the standard pricing mechanism included with xTuple ERP. The xWD package adds to this the long margin or long 30 margin calculation, which is the industry standard method for the distribution market.
Cost plus pricing, which is the standard method in xTuple, works as follows:
Cost + Markup = Sales Price
Cost = $1.00 and Markup = 30% results in $1.00(Cost) + .30(Markup) = $1.30 Sales Price
With the xWD package installed, you get the distribution-specific, long-margin markup, which is calculated as follows:
(Cost /1 - Markup %) = Sales Price
$1.00(Cost) / (1 - .30)(Markup)= $1.4285 (Sales Price)
To configure your pricing for the distribution market, navigate to . The following screen will appear:
Pricing Configuration
The pricing configuration options are described below:
If selected, item pricing (if it exists) will override product category pricing. If not selected, product category pricing will override item pricing for margins higher than the product category pricing.
If selected, the system will use the wholesale price for unit costing on sales orders. (The wholesale price is normally updated via the external catalog.) If not selected, the system will use the normal method for unit costing on a sales order (i.e., either standard or average cost, depending on your chosen costing method).
If selected, the system will use the long 30 or gross margin formula described above for markups. If not selected, the system will use the cost plus formula described above for markups.
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| 8.2. Assigning a Pricing Schedule to Customers |  | 10. Smooth Margins |