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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