Pricing Administration Guide > Setting Up Pricing for Products with Components > About Setting Up Component-Based Pricing >
Setting Up Base Pricing for Products With Components
Use this pricing method when the user purchases a base product and customizes it by adding options. The total price is the sum of the base price plus the adjusted price of the components. For example, if a car has a base price of $25,000, the user can also purchase additional options such as air conditioning, sun roof, and so on.
To set up base pricing, do the following:
- Set the list price of the car to $25,000.
- Set the price for all other options and, if necessary, specify that some are default components.
When users configure the product, the price they see is the sum of the base price plus the adjusted price of the default options. If the user adds other options, the price increases. For example, assume a car has a base price of $25,000 and includes the following options:
- Chrome Wheels (Default) for $2000
- Gold Wheels for $3000
The user sees an initial price of $27,000 for the car. This is the sum of the base price of the car plus the price of the default chrome wheels. If the user chooses the gold wheels, the sum is recomputed and the price of the car becomes $28,000.
An alternate method for setting up base pricing is to:
- Include options in the base price.
- Create price override adjustments for all default options included in the base price that sets their price to zero (0).
- Create a price override adjustment for related nondefault options that sets their price to the difference between the default option and the nondefault option.
In the example, you can use this alternative method to include chrome wheels in the list price of the car by doing the following:
- Set the list price of the car to $27,000.
- Create a price override to zero (0) for the chrome wheels.
- Create a price override to $1000 for the gold wheels. This is the price difference between the gold and chrome wheels.
To set up base pricing product
- Display the components of the product with components in the Pricing Designer, as described in Viewing a Product's Components in the Pricing Designer.
- Define relationship-based pricing adjustments, if they are needed, as described in Viewing and Changing the Reference Price.
- In the Price List Item form, go to the List Price field and enter the base price.
- In the Pricing Designer list, select the components. In the Adjustments list, enter price adjustments for each component.
- If you are using the alternative method of setting up base pricing, enter the necessary price overrides for default components.