Knowledgebase
How Minimum Selling Price is calculated?
Edited by Vincent on 01 August 2017 10:03

If the minimum selling price is inclusive of shipping: ChannelMAX advises you of this option only if your shipping is not weight based, meaning either with shipping band or with shipping override.

For example, you procure an item at $10.00
Your cost of handling this item is $2
You would like to make $2 profit
Say your Actual Shipping Cost is $1.50
So final MinimumSellingPrice is [$10 + $2 + $2] + 1.50 = $14 + $1.50 = $15.50
Suppose the shipping price on Amazon is $5
The minimum price of the item will be $15.50 + $5.00 shipping, i.e, total $20.50
Minimum Selling Price is saved in ChannelMAX as "Cost/Min" under "Inventory Multi-Channel" dashboard.
Under "Settings--> Repricing Model", it's rule#35 that determines the floor aka minimum selling price.

Subtract Shipping to get floor:

Using this rule, you can subtract shipping amount from floor(and ceiling) when new price is fed to Amazon. Meaning for a specific SKU, in ChannelMAX, you input $40 as your 'Cost/Min' and your shipping fee in Amazon is $5.00. If you check this rule#38a under 'Settings-->Repricing Model-->Advanced-->Shipping' tab, re-pricer will have the option to price your item at $35.00 ($40 - $5.00), without this rule checked, your price will never be lowered below $40. If you check option 2C ('Subtract Shipping To Get Floor') under 'Settings-->Selling Venues', this rule will be auto enabled during repricing calculation for all SKUs. If this rule is enabled under 'Settings-->Repricing Model' then only the SKUs which are repriced based on that specific R model are impacted.

Amazon Commission mark up:

Under 'Settings-->Category Setup', you may configure Amazon mark up percentage to add commission to floor for the product groups you are selling. Next, enable rule#36a and 36c as appropriate under 'Floor/Ceiling' tab.

When rule#"(36a) Overwrite Floor From Category Setup" is check marked, floor is calculated as below:

Say you procure the item from your vendor for $10, and Amazon charges commission of 15%, your floor must be $115 or higher. Without this rule configured, you will need to input 115 as 'Cost/Min' for that item (aka SKU). However you may allow ChannelMAX to calcualte the Amazon commission and add to your 'Cost/Min' to derive floor. For example if you set category 'Toys' with markup as 115, meaning 15%, then if your 'Cost/Min' is $100, your floor will be $115. If you set floor r#35a at 120%, then first $100 will be marked up by 20% at $120 and then 15% will be applied on top of $120 (total of $138). We recommend that you check rule#36c whenever you check rule#36a.

Now, when rule# "(36c) Calculate Exact Category MarkUp" is check marked, floor is calculated as below:
We recommend that you keep this checked. This is for calculating the exact markup. Say your Cost/Min is $100 and you set your Toys with markup defined as 115 (15%). Then your floor will be calculated as [$100/(1-0.15)] = 117.65, (instead of $100*1.15) which is $115. Now when you sell at $117.65, after 15% commission by Amazon, you get $100. However, if you sell at $115, you get only $97.75 (i.e, $2.25 less than $100, aka floor).

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