Growing a product-based wholesale business is hard work that often requires tough negotiating skills. Along the way, you've probably had customers ask for across-the-board discounts, custom prices on specific products, and other special incentives.
Managing those varying discounts may not be a problem when you're just getting started and only have a handful of customers. However, it can quickly become unwieldy once you have a large base of customers.
Making those price adjustments manually on each order is an easy way to make mistakes. All it takes is for one sales rep or customer service person to forget to change a price on an invoice and you'll lose credibility with the customer. If it happens once, the customer may let it slide. If it happens too many times, you could lose the customer.
An easier way to manage different prices for different customers is with the price levels feature in QuickBooks. You can easily set an across-the-board discount for a specific customer or group of customers, and you can set specific prices on specific items. Once you set QuickBooks price levels and assign these discounts to your customers you don't have to do anything manually again. The customer's sales orders and invoices are automatically updated with the correct price. Online order entry software that integrates with QuickBooks will automatically read the price levels and will display the correct discounted pricing to each customer or rep. Learn more about integrating QuickBooks' custom pricing with an order entry system.
QuickBooks Price Levels: Two Options
QuickBooks has two different settings for custom pricing that allows you to customize pricing either by customer or by product:
- Fixed Percentage Price Levels: A fixed percentage price level is exactly what it sounds like. You can choose to increase or decrease prices by a set percentage for specific customers. For example, if you have a customer who receives a 10 percent discount on all orders, you can simply set a 10 percent fixed percentage price level for that customer. The discount is then automatically applied to all of the customer's invoices without any action on your part. QuickBooks also has a great price rounding tools which will make the discounted prices to look clean and match your pricing protocols.
- Per Item Price Levels: A per item price level allows you to set special prices on specific items. This list of items and special prices can then be assigned to one or more customers. QuickBooks takes care of the rest with no additional effort on your part. Good online order entry systems have a feature that will display only the items that are on this per item price level list to wholesale customers and reps.
How to Set Up a New Price Level
Setting up a new price level is simple and only requires a few steps:
- Go to the lists menu.
- Click on "Price Level".
- Choose whether you want a Fixed Percentage or Per Item Price Level.
- If you choose Fixed Percentage, choose whether you want to increase or decrease the price and then enter the percentage. For Per Item, simply choose the item and enter the new price. Experiment with the rounding tool if needed.
- Assign the price level to the customer on the “Payment Settings” tab on the QuickBooks customer screen.
You're all set. Your new price level will take effect immediately on that specific customer or product.
If you're using an online order entry system that is linked to QuickBooks, the new prices will automatically display on the order screen. This can add a level of professionalism for your wholesale customers. When they use the online order entry system they'll automatically see their custom prices. They will have added confidence that you're processing their order correctly.
Linking your order entry system to QuickBooks can also reduce errors. Since the custom QuickBooks price levels are automatically synced with your order system, the orders will come in with the correct pricing. Invoices will also have accurate pricing. All you have to do is fill the orders and get them out the door. Learn more about how order entry software can improve business.
Custom pricing is very important to manufacturers, wholesalers, and distributors. QuickBooks price levels can help you provide better service to your wholesale customers and process their orders faster and more accurately. If you have multiple customers who pay special prices, investigate how you can use QuickBooks price levels to streamline your process.
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Photocredit: Bill David Brooks via Flickr