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# Sell Price Rules

When a new sell record is added to an item, the system will automatically initialise the sell prices. The values of the sell prices will depend on the New Sells Calculation Method option on the System 2 tab of System Settings. If the option selected is 'Default To Previous', the system will attempt to find the last Normal sell record for the same location. If it finds one, those sell prices will be used as the new sell prices. The user can then simply alter the sells they actually want to change. If the option selected is 'Margins On Costs', the system will propose sell prices based on the cost, margins and rounding rules, as described below.

The basic formula for proposing a sell is:    cost + margin + GST + rounding rule.

The difficult part is how the system chooses the margin and rounding rule to use.

If you are in Australia the system will use margin rules to determine the margin % which should be added to the cost.

A margin is defined by margin rules. Since the system allows five sell prices per item at any one time, a rule allows five margin percentages to be entered. However, the system also allows you to specify what each margin percentage should actually do. The first percentage will be treated as a margin on cost. However, for the remaining percentages you can tell the system that the percentage is actually a percentage of one of the previous sells which have just been calculated. This allows you to have the system automatically maintain a second sell price 10% below the first. This is best shown with an example.

Margin Rule

 %1 %2 Type 2 %3 Type 3 %4 Type 4 %5 Type 5 10 15 GM 10 Sell 1 20 Sell 2 0 GM

Actual Sell Prices

Start with cost of \$30.00

 Sell Price 1 Sell Price 2 Sell Price 3 Sell Price 4 Sell Price 5 \$33.33 that is 10% margin on \$30.00 \$35.29 that is 15% margin on \$30.00 \$36.66 that is 10% higher than \$33.33 \$42.35 that is 20% higher than \$35.29 \$30.00

The system will determine the most appropriate margin rule to use as follows:

• A default margin can be set up directly against an item using the Items form. The system will look for a suitable margin for the specific location. If none are found, the system will look at the location’s parent. It will do this until a margin is found or no more locations are available.

• A margin can be set against the system or a department, category, group or subgroup for any location using the Category Maintenance task. The margin can also be defined for a manufacturer. This allows items from a particular manufacturer to sell at a higher margin than other manufacturers. The system will look for a margin for the most specific details first. If it can't find one it will look for the next most specific and so until it finds a margin. This is summarised as follows:

Location + Department + Category + Group + Subgroup + Manufacturer

Location + Department + Category + Group + Subgroup

Location + Department + Category + Group + Manufacturer

Location + Department + Category + Group

Location + Department + Category + Manufacturer

Location + Department + Category

Location + Department + Manufacturer

Location + Department

Location + Manufacturer

Location

If a suitable margin cannot be found for that location then it will look for a margin for that location's parent. It will continue to do this until no more locations are available.

• The system will look for a suitable margin for the specific location. If none are found, the system will look at the location’s parent. It will do this until a margin is found or no more locations are available.

• If this is an existing item, the system will use the current normal margin as the default value.

• If still no margin is available, a standard 25% will be used.

Once the system has a suitable margin it will calculate sell prices based on the cost.

The next step is to add GST on to the sell price, if applicable.

The last step is to round the sell price based on rounding rules. For example, you might want a sell price of \$4.93 rounded to \$4.99. These rules are defined using Sell Price Rounding Rules. Different sets of rounding rules can be assigned to different department/category/group/subgroups and locations using the Category Maintenance task. This allows different sorts of items to have different rounding rules. The system does a similar check for the most appropriate rounding rule as it did for the margins above, that is

Location + Department + Category + Group + Subgroup

Location + Department + Category + Group

Location + Department + Category

Location + Department

Location

If no rounding rules are found for that location, the system tries that location's parent. It repeats this until there are no more locations. If no rounding rule is used, the sell price is simply not round.

Once a rounding rule is found, the five sell prices is rounded using these rules. At this point the system has finished proposing sell prices.