Pricing Administration Guide > Setting Up Component-Based Pricing > About Setting Up Component-Based Pricing >

Setting Up Base Pricing

Use this pricing method when the user purchases some base product and can customize it by adding options. The total price is the sum of the base price plus the adjusted price of the components.

For example, 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 you would 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, a car has a base price of $25,000 and has the options shown in Table 18.

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 0.
• Create a price override adjustments for related nondefault options that sets their price to the difference between the default option and the nondefault option.

In the example shown in Table 18, you can 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 0 for the Chrome wheels.
• Create a price override to $1000 for the Gold wheels. This is the difference in price between the gold and chrome wheels.

To set up base pricing product

1. Display the components of the customizable product in the Pricing Designer, as described in Viewing a Product's Components in the Pricing Designer.
2. Define any needed relationship-based pricing adjustments as described in Creating a Relationship-Based Price Adjustment.
3. In Price List Item, enter the base price in the List Price field.
4. Enter Prices for all the components.
5. If you are using the alternative method of setting up base pricing, enter the necessary price overrides.