1. RRP (Recommended Retail Price)
Definition:
The price suggested by the manufacturer or supplier as the retail selling price.
Usage:
Often used as a reference for setting promotions or discounts.
Not always equal to the actual selling price.
2. VAT Rate
Definition:
The Value Added Tax (VAT) percentage applied to the product price.
Usage:
Used to calculate net prices (excluding VAT).
Important for margin and profit calculations.
Formula:
Net Price=Gross Price1+VAT Rate\text{Net Price} = \frac{\text{Gross Price}}{1 + \text{VAT Rate}}Net Price=1+VAT RateGross Price
3. Inventory Policy
Definition:
Defines how stock levels influence pricing and sales decisions.
Examples:
Always in stock
Limited stock
Preorder
Out of stock
Usage:
Supports pricing automation, e.g., increase price if stock is low.
4. Price
Definition:
The current selling price of the product (usually excl. VAT in reports).
Formula:
Price (excl. VAT)=Price incl. VAT1+VAT Rate\text{Price (excl. VAT)} = \frac{\text{Price incl. VAT}}{1 + \text{VAT Rate}}Price (excl. VAT)=1+VAT RatePrice incl. VAT
5. Compare at Price
Definition:
A higher reference price (e.g., original or previous price) used to show discounts or promotions.
Usage:
Displayed as “Before” price in e-commerce to highlight savings.
Formula (Discount %):
Discount %=Compare at Price−PriceCompare at Price×100\text{Discount \%} = \frac{\text{Compare at Price} - \text{Price}}{\text{Compare at Price}} \times 100Discount %=Compare at PriceCompare at Price−Price×100
6. Latest Price Change
Definition:
The most recent date and/or value when the product price was updated.
Usage:
Useful for monitoring dynamic pricing.
Helps track frequency of price adjustments.
7. Days Since Last Price Change
Definition:
The number of days that have passed since the product price was last modified.
Formula:
Days Since Last Change=Today’s Date−Latest Price Change Date\text{Days Since Last Change} = \text{Today’s Date} - \text{Latest Price Change Date}Days Since Last Change=Today’s Date−Latest Price Change Date
8. Volume Elasticity
Definition:
Measures how sensitive demand (units sold) is to price changes.
Formula:
Volume Elasticity=% Change in Units Sold% Change in Price\text{Volume Elasticity} = \frac{\%\ \text{Change in Units Sold}}{\%\ \text{Change in Price}}Volume Elasticity=% Change in Price% Change in Units Sold
Interpretation:
Elastic (>1): Demand changes strongly with price.
Inelastic (<1): Demand changes little with price.
9. Revenue Elasticity
Definition:
Measures how total revenue reacts to price changes.
Formula:
Revenue Elasticity=% Change in Revenue% Change in Price\text{Revenue Elasticity} = \frac{\%\ \text{Change in Revenue}}{\%\ \text{Change in Price}}Revenue Elasticity=% Change in Price% Change in Revenue
Usage:
Helps identify whether increasing or decreasing prices will grow total revenue.
10. Profit Elasticity
Definition:
Measures how profit changes in response to price changes.
Formula:
Profit Elasticity=% Change in Profit% Change in Price\text{Profit Elasticity} = \frac{\%\ \text{Change in Profit}}{\%\ \text{Change in Price}}Profit Elasticity=% Change in Price% Change in Profit
Usage:
Critical for profit-optimized dynamic pricing.
📘 Notes
Elasticities are calculated based on historical data and statistical models.
Compare at Price is important for promotions but does not affect unit costs.
Inventory Policy can be integrated with pricing rules for better stock management.