We recommend you read through the costing table article before reading through this.
In this article:
- What is the pricing table?
- Pricing items
What is the pricing table?
The pricing table is where you will deal with everything that has to do with finding the right price for your business. This is where you will manage markups and margins, understand profit, and be able to specify the precision of your unit price. The pricing table is found towards the bottom of an expanded quote item below the costing table.
Cost vs. Price
There is a difference between cost and price. The cost is how much money it will take for you to produce a certain quantity of a part to a set of specifications. The price is how much you charge your customer. The difference between price and cost is your profit. The exercise of costing is all about determining costs. The exercise of pricing is all about determining the right price. Costing is objective, and pricing is subjective. In order to do either effectively, they must be done separately. The pricing table is intentionally located below the costing table because it should be the only place where you perform any pricing exercises. Everything above the pricing table should be focused on determining your costs. Everything in the pricing table is about finding a price that will win you the job and make your shop money.
We recommend you watch our webinar on this topic, Costing vs. Pricing, Episode 1: Frameworks for Effective Estimation.
Your pricing items are an ordered list of custom markup or margin formulas. These get set up just like operations do, with a custom pricing formula and variables, and are tied to a process template. These pricing items will automatically generate when assigning a process to the root component, and will output a percentage value for each quantity. This percentage value will get applied to a total cost value as either a markup or a margin. This total cost value is either a specific color of money e.g. raw material, or the total estimated cost. This provides an extremely flexible canvas for you to run through your pricing exercise. You can name these pricing items whatever you want, add manual pricing items, reorder them, or delete them at any time. You can accomplish exciting things like customer specific markups, quantity break based markups, total amount based markups, discounts, and many other things. Reach out to support to explore more of what is possible, and if you would like to try yourself, check out our pricing item P3L cheat sheet to configure your own formulas.
You can very quickly adjust the percentage for each quantity by typing in manual overrides on individual cells, or accessing the actions drop down where you can apply a bulk override in a variety of fashions:
You can also apply overrides horizontally across a specific pricing item:
Adjust unit price precision
For jobs where the unit price per part is less than $0.50 per part, you may need to present and/or calculate unit prices with a precision greater than 2 decimal places. To do this, access the Actions drop-down in the pricing table:
As the above screenshot demonstrates, you can choose a unit price precision of 2, 3, or 4 decimal places. This unit price precision will be reflected on the digital quote, the quote PDF, and the orders page.
This is an immensely powerful feature set that will allow you to keep costing and pricing separate, without sacrificing the accuracy of your costs or the flexibility of your pricing. Over time, you can leverage this separation to dial in your internal estimating strategies and how to approach winning more business at greater profit.