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Pricing Levels

 

Posted: 01 Jul 2006 01:30 am

 

It sure would be nice if pricing could be set up in levels, eg. level 1 would be the least and level 5 the higher price. Setting the level would affect all the pricing in the estimate.
. . . . . ficolaredo
Joined: 08 Nov 2005  Posts: 2

 

Judging from what you're asking, you already know that Morning Flight lets you adjust prices up or down, both by individual customer and by specific job. For the benefit of users who aren't familiar with the procedures, here is how:

 

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For individual customers, enter the trade discount under "Terms -> Reduce Prices" in My Store -> My Customers -> Change Customer. Here you can also add surcharges for customers that are either a credit risk or are difficult to deal with.

 

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To adjust prices on a specific job, select the Quotes tab in the Estimate Writer, then position the highlight bar over an active (checked) quote item. Use the up- or down-arrow keys; using the mouse would activate/deactivate the item. Now click the blue Price button and enter the price you want to quote for the lowest quantity. That will do two things:

1.Calculate the percentage of the price increase/reduction
2.Adjust the price of the remaining two quantities to that percentage.
 

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Note that any price adjustment will apply only to the item that's highlighted, not the entire estimate. The internal Price and Time sheets will always reflect the actual price calculated by Morning Flight, but on the Estimate you send or e-mail to your customer, that job will be priced lower.

Now, to your request for Pricing Levels: Why not have different, across-the-board levels, like those found in the Crouser Guides? The short answer would be that I disagree with it on strategic grounds. That would be true, but the reasons go much deeper than that.

However, let's start with why it isn't good pricing strategy. One of the quickest ways to lose a customer is to price 1,000 of that customer's letterheads at $50 last month (level 3), at $40 today (level 2), and at $60 next month (level 4). If a temporary slowdown forces a price reduction to at least cover your overhead (or a sudden influx of orders lets you raise prices to make up for those reductions), there is an easy way to do that in Morning Flight: adjust hourly press rates.

The problem with price levels is that they're too broad, too much of a shotgun-type remedy. On some jobs, changing from level 3 to level 2 may merely lower your profits. On others, it will mean you're selling below cost. Changing hourly press rates is just as broad and no better that way. That's why in Morning Flight we've decided on a more targeted approach, by allowing price adjustments on a job-by-job, as well as on a customer-by-customer basis. My advise though is to still sprinkle lightly. One of the chief benefits of using an estimating program is consistency. Each arbitrary price adjustment flies in the face of that.

While implementing levels in Morning Flight would be easy enough to do technically, here are some less obvious factors to consider:

Ease of Use. Morning Flight is designed to let office staff handle the low end quotes, freeing the shop owner or manager to focus on the heavy lifting. Price levels would negate that. Job-by-job adjustments, on the other hand, can always be left to the discretion of the owner/manager.

The Internet. Somewhere down the road (past the User Manual, the Gold Edition, and the Booklet Module), you'll see a PrintFire program that will offer your customers an "Electric Catalog and do-it-yourself Price List for Printing" on your own web site. When that happens, price levels - and most price adjustments - will become untenable and go flying out the window.

Given that we already have two options available (three if you count hourly press rates), adding yet another has the potential of making price maintenance an administrator's nightmare. Any thoughts on that from other users?
. . . . .  Hal Heindel

 

AMEN Hal, I could not have said it better myself.
. . . . . Craig Hofer
Loris Printing  Joined: 05 May 2005  Posts: 79  Location: Sandusky, Ohio