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Vertical Pricing for SKU Items

Governed SKU pricing calculates a Sales Quote SKU price from its approved cost and a target gross-margin percentage. It applies to catalog SKU Items only. Custom Items and configured Smart Quote line items are outside this pricing policy.

!!! info "Preview period" The Price Calculation page may be available before this pricing policy takes effect. During the advance-notice period, the page is informational and displays FYI — preview only. Existing SKU pricing remains in effect until the feature is enabled.

How the price is calculated

The calculation starts with the SKU's approved Item cost:

Unit price = Approved unit cost / (1 - Target GM% / 100)

For example, a $70.00 approved cost and a 30% target gross margin produce a $100.00 unit price:

$70.00 / (1 - 0.30) = $100.00

The calculated price is rounded to two decimal places. The quote stores a snapshot of the inputs and result so users can see which cost and policy produced the price.

Selecting the GM% target

VELO uses the following order when resolving the pricing policy:

  1. If the customer has a valid target GM%, VELO uses that target. It overrides the vertical target.
  2. Otherwise, if the customer has a vertical with an active, valid GM% target, VELO uses that target.
  3. If the customer has no vertical, VELO uses the highest GM% target among active configured verticals.
  4. If no valid policy is available, VELO does not apply the new price and reports that pricing configuration is required.

A valid target is from 0% through 99.99%. Inactive verticals are shown for reference but are not eligible for pricing.

Preview a SKU calculation

From a Sales Quote:

  1. Open Lines & Items.
  2. Find a catalog SKU Item. Custom Items do not include this option.
  3. Select the linked unit price or open Actions and select Price Calculation.

The page shows:

  • approved SKU cost and cost source;
  • selected customer or vertical policy and target GM%;
  • cost-to-price formula and applied markup;
  • calculated unit price;
  • the customer target GM%, when defined;
  • all configured vertical GM% targets; and
  • the policy used by the preview.

The vertical-target table is marked FYI. A Used badge identifies the target selected for the current preview.

When enabled

After rollout, an administrator enables Price SKU Items from cost and target GM% under Setup > Settings > Sales Quotes. When both the alpha feature and this setting are enabled, the same calculation is used when a SKU Item is added to a Sales Quote through either:

  • Product Finder; or
  • Add SKU Item on the Sales Quote.

Existing Sales Quote items are not repriced automatically. The calculation affects a SKU when it is added under the enabled policy.

When the setting is disabled, Product Finder and Add SKU Item use the price defined on the Item.

Data to review before rollout

Administrators should verify:

  • every applicable customer has the correct vertical;
  • customer target GM% values are correct because they override vertical targets;
  • each active vertical has the intended target GM%;
  • the highest active target is appropriate as the no-vertical fallback;
  • SKU Items have approved, current costs in the Sales Quote currency; and
  • cost sources and effective dates are accurate.

Pricing is unavailable when the approved cost is missing, expired, not yet effective, or recorded in a different currency from the quote.

Rollout controls

The pricing policy is initially controlled by both the Vertical SKU pricing alpha feature and the Sales Quote setting. While either control is disabled, users can review the calculation page but the Item price remains active. After the announcement and pause period, authorized internal users can enable the alpha for validation before general rollout.

The design keeps pricing resolution in VELO.API so Product Finder, Add SKU Item, and future velo.core pricelist integrations can use one authoritative calculation.