This week we examine how price tiers can help practices move inventory more quickly, and build goodwill with customers who are willing to make larger purchases in exchange for a discount. It's a true win-win.
Welcome to the tip of the week. This week we focus on how to set up tiered pricing that automatically apply discounts based on an how many of a particular item is being purchased.
What should I use tiered pricing?
Offering volume discounts is a terrific way to encourage bulk purchases of certain inventory, which helps to rotate through inventory more quickly and efficiently. Clients also appreciate the additional discount when they purchase a larger quantity.
How do I set up price tiers?
Price tiers are managed in the inventory item profile. Tiers are defined at the upper-boundary. In other words, the discount applies until the upper boundary is reached. In the example below, no discount is provided on the first five items that are purchased, a 7.5% discount is applied for 6-10 items, and a 12.5% discount is applied for more than 11 items.
How are the discounts reflected?
Discounts are reflected in the unit price of the item that is added to the invoice. As the quanity changes, the unit price is updated to reflect the discount provided by the price tiers.
In conclusion...
Price tiers offer an automated way to apply volume discounts that encourage customers to make larger purchases. The practice benefits from moving through the inventory more quickly, and clients benefit from a price break. It's a win-win.
Cover photo by Jake Hills on Unsplash.