Pricing & Discounts

Price Lists and Quantity Breaks

A price list holds what you charge. Several may exist at once, and which one applies is resolved from the customer, the currency, the date and a priority.

What a list carries

• Entity — whose prices these are.
• Currency — a list is in one currency; sell in three and you have three lists.
• Customer class — trade, retail, distributor, or however you segment.
• Valid from and to — so next quarter's prices can be loaded in advance and take effect on the day.
• Priority — the tie-break when more than one list qualifies.
• Tax inclusive — whether the prices already include tax.

Get tax-inclusive right

This flag is a common and expensive mistake. A retail list entered tax-inclusive but flagged exclusive overstates every price by the tax rate, and the error is invisible until a customer complains. Check it on every list you create, and verify with one known product.

Dating rather than overwriting

Load a new list with a future start date rather than editing the current one. The change happens on the day by itself, the old prices remain available for historical questions, and you can prepare an increase without anyone seeing it early.

Quantity breaks

A break is a threshold at which the unit price changes — 1 to 9 at one price, 10 to 49 at another, 50 and above at a third. Breaks belong to the line, so different products can have different structures.

Decide whether a break applies to the whole quantity or only the units above the threshold, and be consistent. Customers notice, and the two produce materially different invoices at the boundary.

Resolution

Where several lists qualify, priority decides. Keep the number of overlapping lists small — a resolution nobody can predict produces a pricing query nobody can answer, and the customer is on the phone while you work it out.

Discount Rules and Stacking

Discount rules apply reductions on top of price list pricing — a promotion, a customer agreement, a volume incentive. The important mechanic is what happens when more than one applies.

The stackable flag

Every rule declares whether it stacks. A stackable rule applies and evaluation continues to the next. A non-stackable rule applies and evaluation stops.

Why stopping matters

Two 20% discounts that both apply do not give 40% off. They compound to 36%, and the difference is money leaving the business quietly. Multiply that across a promotion and a customer agreement that happened to overlap, and a campaign that looked profitable was not.

Making stacking explicit forces the decision to be made deliberately, at configuration time, by somebody thinking about margin — rather than emerging accidentally from the order rules happen to be evaluated in.

Order matters

Because a non-stackable rule ends evaluation, the sequence determines the outcome. Put the rules that must always be considered first, and be aware that a non-stackable rule early in the sequence hides everything after it.

Default to non-stackable

When in doubt, do not stack. A customer who received one discount instead of two will ask, and you can fix it. A customer who received two instead of one will not, and you will find out at the margin review.

Test the combinations

Before a promotion goes live, price a basket that qualifies for the promotion, one that qualifies for a standing customer discount, and one that qualifies for both. The third is the one that will surprise you.

Keep rules dated

Give promotional rules an end date when you create them, not when the promotion ends. A promotion that outlives its intended window is one of the more common ways discount configuration leaks money, precisely because nothing about it looks broken.

Commissions

Commission rules calculate what is owed to a salesperson, an agent or a partner on a transaction.

Choose the basis carefully

Commission can be calculated on revenue or on margin, and the choice changes behaviour rather than just arithmetic.

• On revenue — simple, and it rewards discounting. A salesperson maximises commission by closing volume at any price.
• On margin — harder to explain, and it aligns the salesperson with the business. Discounting costs them too.

Where margin is available — and with stock valuation storing consumed cost, it is — margin is usually the better basis. Its one requirement is that costs are accurate, because a wrong cost now changes somebody's pay.

When commission is earned

Decide whether commission arises on order, on despatch, on invoice or on payment, and configure that point deliberately. Earning on order is generous and creates clawback when orders cancel. Earning on payment aligns with cash but delays the reward well past the effort.

Credits and clawbacks

Credit notes must reverse commission. If they do not, a cycle of orders and credits pays commission on business that never happened, and this is a well-known way for a commission scheme to be gamed. Confirm the reversal path exists and test it with a full credit and a partial one before going live.

Splits

Where several people share a sale, splits should total 100% and be recorded on the transaction rather than worked out later. A split agreed in conversation and applied at payment time is a dispute waiting to happen.

Make statements visible

Let people see their own commission as it accrues. It reduces queries, and it surfaces configuration errors quickly — a salesperson checking their own figures is the most motivated tester a commission rule will ever have.