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We discussed how to use the "Quantity Price Break" in our earlier post, showing you how to set up the item with up to five levels of price break for each product. Besides the standard quantity price break, you can have the quantity price breaks on additional units only.
You can find the "Additional Units Only" checkbox in the Selling Info tab of the Product.
Example: The product BB100A has the "additional units only" price break of:
Base price: $22.00 # Units 10: $21.00 # Units 50: $20.00 # Units 100: $18.00 # Units 500: $16.00
When a customer bought 50 units of BB100A, the unit price will be $21.20 per unit.
Working: First 10 units at $22 per unit = $220 After the first 10 units, the next 40 units are at $21 per unit = $840 The average unit price of 50 units of BB100A is ($220 + 840)/ 50 = $21.20
The average unit price of product BB100A changed to $21 per unit if 60 units have sold instead of 50.
Working: First 10 units at $22 per unit = $220 After the first 10 units, the next 40 units are at $21 per unit = $840 After the first 50 units, the next 10 units are at $20 per unit = $200 The average unit price of 50 units of BB100A is (220 + 840 + 200) / 60 = $21.00
The "quantity price break" and the "quantity price break on additional units only" are pricing structure used to encourage bulk purchase. Either pricing method use will subject to the complexity of the business.
Usually, manufacturing or wholesale businesses are more likely of using the quantity price break method to encourage bulk purchase. For example, a business owner who runs a T-Shirt printing company give a better discount for the customer whom print in bulk.
The retailers are often promoting their products on a smaller scale, such as buying five toothbrushes for the price of four, instead of a quantity price break as what the wholesaler did. The consumer usually doesn't mind buying more during an offer as those are consumable products.
We shall discuss further on how to create a bundle in MoneyWorks accounting software in our coming post. Stay with us.