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Use gross profit on cost prices as an option
 
andyg1
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Joined:  2008-05-05
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Hey guys, came across Magento in the last couple of days and really like what I am seeing. I created a simple (in comparison) bespoke e-commerce website for myself a couple of years ago because there just wasn’t anything around that suited what I wanted. Magento appears to be getting somewhere very close.

My first suggestion would be this:
Instead of specifying the sales price of items on our site we specify the cost price and group the items together based on one Gross Profit margin for each group. You define the names of the margins and then assign a GP% and then select which products go in to that GP. For us this offers several advantages:

- All the cost prices are in the DB so working out gross profits on sales is easy as we go along
- We may have a brand of products that we want to be selling at a certain GP and then on mass update all those prices at once by the same margin
- A supplier may tell us that they are increasing/decreasing the margin by a certain %. If we know we have our prices matched competitively then we can change the GP and effectively leave the products at the same selling price just be adjusting the value of the GP in that set of products
- We can tell just by looking at our products admin what margin we are dealing with. If someone requests a discount, or a price match, then we know how low we can go without being out of pocket because the GP figure is there

Admittedly there is one big flaw in this. If you need to bring down the price of one product in order to do an offer, or a price match, then you have mess about setting up a GP group for it and then assigning it to that group. Ideally I would have the option to decide if you take the sale price given, or a GP% from a seperate table instead.

Any thoughts?
Andy

 
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ukdazza
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This sounds interesting. So are you saying that this can be done at present in Magento, or this is something you would like to see in Magento?

It sounds like a good way to manage products, margins and competitive edge.

 
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andyg1
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Joined:  2008-05-05
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As far as I am aware it isn’t currently a feature of Magento, but I’d like it to be. Above (and below) are my arguments for it.

For our own system we download the monthly prices from our supplier as a csv and upload them into the database based on the manufacturer’s product code (which is unique) and we can update all the prices in the website without any calculations involved in the working out the margins or applying a different GP to each of the products. The prices of our entire product range can be updated in seconds.

 
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ukdazza
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definately sounds like a good idea. otherwise you have to do what we do and work out each products price/margin manually..which does take a long time. I agree with you, a good idea.

 
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rebeccama
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You can give prices of the bulk product at once using cost + profit markup formula. Here is the extension

Fme Percentage Pricing

 
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erik_bahr
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Hello Andy, Magento has different prices options: prices, cost, msrp, special prices, tier prices, grouped prices - which allow you to build your own prices by which you will sell products and specify special prices (price with discount). To facilitate process of managing and updating products and their prices you can use extensions Advanced Admin Products Manager or Mass Prices Updater both of this extensions enhance product grid with products prices and allow you edit prices right in the product grid as in Excel table - so you can see all prices from manufacturer/supplyer and buld own prices with own profit/margin and perform bulk update in one click. It has features to add fixed amount and percentage value to any products prices.

 
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serpyre
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Using COGS (Cost of Goods Sold) is the correct way to price basing, however Magento does not do this using a hardcoded method. There is Dynamic Pricing, enterprise level pricing is complex and Magento still has some way to go to understand the business side being a technical platform.

 
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Amasty
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mass update all those prices at once by the same margin

Hello Andy, for this purpose you may use the Mass Product Actions module. With this extension you can definitely update prices in a bulk.

Moreover, the module also allows you to:

- Assign multiple products to and remove them from categories
- Copy custom options, images and attribute values
- Quickly populate related products, up-sell & cross-sell blocks
- Delete products in bulk fast, remove product images

Below you’ll see the way you can manage product prices in a bulk:

Image Attachments
mass-product-actions-scr6.png
 
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