What Is Pricing Engine?
Pricing Engine is Supplyframe CPQ's comprehensive, rules-based pricing configurator crafted to meet the unique needs of electronics distributors and suppliers. This powerful tool is designed to manage complex pricing strategies, optimize revenue, enhance margins, and maintain consistent pricing discipline across your entire product range and customer base.
Pricing Engine automates the calculation and application of prices for parts in your Catalog. It leverages a set of predefined rules and data inputs—such as prices, cost, customer specific markups/discounts, and market conditions—to generate accurate and optimized pricing in real-time.
By centralizing and automating pricing logic, it ensures consistency, reduces the risk of errors, and allows businesses to respond quickly to market changes, thereby enhancing competitiveness and profitability.
Pricing Engine provides the following benefits:
- Optimize Revenue and Margins:
- The Pricing Engine ensures that your pricing strategy is aligned with your financial goals, maximizing both revenue and profit margins. By applying consistent rules across all pricing scenarios, you eliminate the risk of underpricing or overpricing, leading to more competitive and profitable outcomes.
- Centralized Pricing Management:
- Pricing data is consolidated into a single, centralized platform, making it easier to manage and update. This feature reduces the complexity of managing pricing information across multiple systems, ensuring that all teams have access to the most up-to-date and accurate pricing data. This centralization is critical for maintaining pricing consistency and transparency across the organization.
- Advanced Rule Configuration:
- The Pricing Engine allows for the creation of sophisticated pricing rules through an intuitive query builder. Distributors can prioritize different price sources, such as supplier costs, market trends, and customer-specific agreements. The ability to configure complex pricing rules ensures that every quote is tailored precisely to the customer's needs, enhancing the personalization of offers.
- Global and Customer Specific Pricing Rules:
- The flexibility to configure both global pricing rules and customer-specific adjustments ensures that your pricing strategy can adapt to different markets, regions, or individual customer agreements. This feature is particularly valuable for distributors with diverse product lines and a wide range of customers, allowing them to tailor pricing strategies to meet specific business objectives.
- Automated Pricing for Line Items:
- Pricing is automatically calculated for your line items, ensuring that the correct price is applied based on the configured rules. This automation not only speeds up the quoting process but also reduces human error, leading to more accurate and reliable quotes.
- Faster Quote Turnaround:
- By streamlining the pricing process, the Pricing Engine significantly reduces the time required to generate quotes.
- Enhanced Pricing Accuracy:
- The risk of pricing errors is minimized through automated calculations and rule-based configurations.
- Improved Win Rates:
- With faster, more accurate, and competitively priced quotes, your sales team is better equipped to win more deals. The ability to deliver tailored quotes that meet customer expectations increases your chances of closing sales.
Pricing Engine Components
Pricing Engine is composed of four features:
- Global Pricing Rules
- Customer Specific Pricing Rules
- Pricing Expiration
- Additional Fees
Global Pricing Rules
Global Pricing Rules are a set of configurable rules that are designed to maintain pricing accuracy and consistency, and ensures your pricing strategy aligns with your overall business goals.
Global Pricing Rules act as the default pricing mechanism and safety net that ensures that every part has a pricing structure in place, even in the absence of tailored Customer Specific Pricing Rules.
If a customer does have specific pricing rules configured, those will take precedence, and the Global Rules will not apply to that customer’s quote. However, for all other customers without individualized pricing rules, Global Pricing Rules ensure that pricing is applied uniformly and in line with the broader pricing objectives of your company.
Customer Specific Pricing Rules
Customer Specific Pricing Rules are pricing rules that apply to individual customers or specific customer segments. These rules take precedence over global pricing rules, meaning that when customer specific rules exist for an account, they will override the global rules for that particular customer. This customization allows you to cater to the unique needs and agreements of different customers, such as special pricing contracts, volume discounts, or loyalty-based pricing. By prioritizing customer-specific pricing rules, your organization can offer more personalized pricing, while still maintaining control over overall pricing strategies.
How Global And Customer Specific Pricing Rules Work Together
During the quoting process, Global Pricing Rules and Customer Specific Pricing Rules are designed to work together in a hierarchical manner.
When Customer Specific Pricing Rules are applied to a list, they take full precedence over Global Rules. This means that for any line items where Customer Specific rules exist, Pricing Engine exclusively uses the Price Source Priority and Advanced Pricing Formulas defined within those Customer Specific rules. The Global Rules, both the Price Source Priority and Advanced Pricing Formulas, are completely bypassed and do not influence the final pricing for line items.
Pricing Expiration
The Pricing Expiration feature is helps you maintain the accuracy and relevance of your pricing data by setting expiration periods for line item prices. This feature can be easily toggled on or off in System Settings, giving you control over whether pricing expirations are enforced within your pricing engine.
When the Pricing Expirations feature is enabled, you can configure the specific number of days until a price expires. This expiration period is calculated by comparing the current date to the last time the line item was refreshed. If the price data for a line item exceeds the configured expiration period, it will be flagged for review, ensuring that outdated prices are identified and can be updated accordingly.
Additional Fees
The Additional Fees feature allows admins to create automated rules that apply extra charges based on specific, configurable criteria. This feature improves your pricing process by automatically including additional fees—such as handling charges, special service fees, or custom duties—when certain conditions are met, ensuring that all applicable fees are accurately reflected in quotes.