Block Pricing

by Community Manager on ‎08-05-2015 01:32 PM - edited on ‎06-02-2016 02:12 PM by Community Manager

Block pricing allows you to assign a fixed price to a product based on quantity, overriding the automatic calculation of quantity multiplied by unit price.

 

Example:

You may sell user licenses on a subscription basis. You charge by the pack. Purchasing one to four licenses costs $100, but five to ten licenses costs $130.

 

BLOCK PRICING SETUP

To place block pricing on a product:

  1. Navigate to Products and select your desired Product.
  2. Set the Pricing Method field on the product to "Block".
  3. Click New Block Price in the Block Prices related list. Note: You may need to add the Block Prices related list to the Product Page Layout.
  4. Create two new block price records for each fixed price and its quantity range.
  5. In the example above, you would have a block price record that looks like the following:block1.png
  1. Create an additional block price record to determine the next price pack for user licenses.block2.png
  1. Determine if you want to incorporate an overage in your calculations to adjust the block price.

Note: The Upper Bound you establish in a block price is not included in the product quantities for that price range. For example, if you want your tiers to include a quantity range of 5 through 10, use 11 as your Upper Bound.

 

OVERAGE RATE

An overage rate is often added on top of the block price selected, based on the difference between the minimum quantity for the block and the quantity entered for that line item. This overage amount is incorporated in prices using the following calculation: 

Block price = price for the block + ((quantity - minimum quantity for block) * overage rate)

 

To place an overage rate on a product:

  1. Create a custom currency field called OverageRate on the Block Price object.
  2. Enter your overage rates for all blocks, on each product, that has block prices. The price of each product will be based on the quantity entered and the algorithm above.
    • Example: 
      • If your lower bound is 100,000 and upper bound is 500,000 and priced at $100,000, but the quantity entered is 250,000, an overage rate is 0.25. The final block price would be: 
      • $137,500 = $100,000 + ((250,000 - 100,000) * 0.25)

Tip: Replace the New button on the Block Prices related list with the Edit All custom button. This will prevent gaps and show any different currencies your organization has enabled.

 

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Comments
by cirwin
on ‎07-27-2016 04:30 AM

Is it possible to invoke block pricing from a custom field such as a checkbox? We have a scenario where some of our products are volume based pricing until you reach a certain quantity, at which point it rolls over to a fixed-fee 'enterprise licence'. We thought that we may be able to use block pricing for this, rather than configuring separate products

by reneemidd
on ‎09-20-2016 02:41 PM

If you can use a Configuration Attribute to lookup the appropriate block pricing,  then why wouldn't the Quantity field be allowed to be used - and calculate the Quantity * the Block Price (as determined by the Config Attribute lookup)?



 

by soniaflamm
on ‎01-18-2017 03:05 PM

 

I have set up block pricing on a couple of my subscription products and when I quote the products all the pricing calculates correctly. BUT I am also using Orders and SteelBrick billing and I noticed that the order picks up the effective quantity on the quote lines and that has been overwritten by 1. So in turn my Orders and Invoices are incorrect because the price schedule on my order is only referencing a qty of 1 and is incorrectly referencing the block price rage. 

 

This doesn't seem like intended functionality or is it? And if it is intended funtionality, what if you want to actually use the block price that was quoted?

 

I also noticed on the related article that discusses Block Pricing and Discount Schedules and noticed in that article it states that the effective quantity will be overwritten to 1. That's not included in this article so I would suggest including that information as well. 

 

by
on ‎04-28-2017 01:43 AM

Can you confirm that Block Pricing can also be achieved using a Range type Discount Schedule based on Quantity with the Discount Unti defined as Price. I am trying to confirm what is the best practice, using Block Pricing or a Discount Schedule. As far as I can tell, the discount schedule is more advantageous in the event you need different Block Pricing functionality for a single product based on quote line item attributes. Put alternatively, using Block Pricing functionality as opposed to Discount Schedules limits you to one set of block prices.

by Elise
on ‎05-04-2017 09:35 AM

I have set up block pricing for one of my products.  With the block pricing it needs to use a custom field on the account, population.  I have added the API name that is on the Account (Population__c) into the dropdown for Block Pricing Field on the product.  The block pricing isn't populating a price on the quote line for the product.  Did I miss a step or do this incorrectly?

by hillarylamb
a week ago

Why did my prices change on closed quotes when I updated block pricing for a product? How to prevent this because now my historical closed opportunities and quotes do not have the correct price.