A price schedule is a list of charges for a company’s goods or services, often used to tailor services to specific customers. Companies may have multiple schedules for different types of customers, and pricing planning can help control the market or avoid competition. It can also be used in a contract or offer for goods and services to win new business.
A price schedule is often a sheet of information that shows charges for a company’s goods or services. For example, if a business charges a slightly declining rate for increased volume purchases, this sheet is typically referred to as a price schedule. In most cases, a company does not disclose its pricing or pricing table to anyone; the sheet is often available to those businesses or customers who purchase items from the business. Also, a company may have multiple schedules for different types of customers or businesses in certain industries. This allows a business to tailor its services to specific customers and the way they operate.
Vendors and vendors are often companies that use rate schedules for their customers. Here, sellers present each customer with a schedule for goods or services that lists prices for several items. New customers can receive a slight discount to induce new business; this most often works for volume purchases. Other times, repeat customers may get more of a discount to keep business. Either way, pricing planning is a flexible approach to working with customers.
Creating a pricing plan can be one way a business can control the market or avoid competition from other businesses. For example, if a company knows the market rate for a good or service, it can create a pricing schedule that competitively circumvents this market price. That’s why many of these programs tend to be regressive when it comes to the price of goods or services. Companies are more willing to cut profits on large volume sales in order to prevent a competitor from getting the business. In some cases, this practice may be close to an alternative form of price skimming, which is a common pricing strategy.
Another form of a rate plan is the use of this item in a contract or offer for goods and services. In a bidding process, several companies seek a certain amount of business with a single customer. In order to sustain future business or more contracts, a pricing plan with cut prices can help win business from this new customer. Or, the new customer may be willing to give more business to the vendor or supplier with the largest volume discounts in the potential offer or contract. Either way, pricing planning works the same way.
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