Dynamic Pricing

Maintaining accurate package prices based on real-time ingredient costs is key to smooth internal operations. Apicbase automates price updates and lets you apply margins or fees, ensuring consistent pricing across locations with minimal effort.

Table of Content

1. What is Dynamic Pricing?

2. Use Cases

2.1. Central Kitchen case

2.2. Warehouse case

3. How to set up Dynamic Pricing

3.1. Manual setup

3.2. Bulk setup via Excel

1. What is Dynamic Pricing?

Apicbase offers the ability to dynamically update the prices of ingredient or recipe packages based on real-time costs. This feature is particularly useful for businesses that rely on Internal Ordering within their operations, such as central production units (CPUs) or warehouses acting as internal suppliers. By leveraging dynamic pricing, you can ensure that your prices are always aligned with the latest cost changes while optionally applying margins or fixed fees for greater flexibility.

When setting up your library for Internal Ordering, you'll create packages for your ingredients or recipes to be delivered from your warehouse or central kitchen to other outlets. These packages need a price, which can either be a static, fixed price or a dynamic price.

A fixed price is simply a set value, e.g., "This box of salad costs €12."
A dynamic price, on the other hand, follows the current cost of the recipe or ingredient, e.g., "The price of this salad box is the cost of its ingredients."

Dynamic Package Pricing allows you to automatically adjust the prices of packages based on the actual costs of ingredients or recipes. It’s ideal for scenarios where the cost of raw ingredients fluctuates and you need to apply a margin or a fixed fee to the original package prices. Dynamic pricing is recommended when:

You want to automate price updates for packages without manual intervention.
You manage large volumes of packages and need to ensure real-time price accuracy.
You want to add a percentage-based margin or fixed fee to reflect internal costs or profit margins.

2. Use Cases

2.1. Central Kitchen case

In this scenario, a Central Kitchen or Central Production Unit (CPU) might produce stockable recipes like sauces or pre-made meals that are then sold/sent to other internal locations within the company. Apicbase can use the Prime Cost of the recipe as the base price, automatically accounting for the cost changes of individual ingredients. On top of that, you can apply a margin and/or a flat fee to adjust the package prices accordingly. Here are some examples:

Example 1: The CPU sends preparations at the cost price. E.g. You sell 1 kg of Bolognese Sauce (4 portions), with each portion having a prime cost of €5.40. Price per package = €5.40 * 4 = €21.60
Example 2: The CPU receives a margin on top of the original cost. E.g. You apply a 10% margin but no extra fee. Price per package = €5.40 * 4 * 1.1 = €23.76
Example 3: A Fixed Fee is added on top of the price. E.g. You apply a 10% margin and a fixed fee of €2. Price per package = (€5.40 * 4 * 1.1) + 2 = €25.76

In case of ingredient price changes, these calculations will automatically adjust to ensure the new costs are reflected.

2.2. Warehouse case

Warehouses often purchase ingredients externally and sell them internally. With dynamic pricing, you can automatically track and apply the most recent supplier prices, adding a margin or fee if needed.

Example 1: Warehouse sends items at Cost. E.g. The warehouse sends a 10 kg pack of flour at the exact cost from the supplier. If the current price of the supplier is €8, the internal price is €8. If the price rises to €10, the internal price will rise accordingly.
Example 2: A Margin is added to the original price. E.g. You apply a 5% margin to account for internal handling or overhead. If the current price of the supplier is €8, the internal price is 8 * 1.05 = €8.40. If the price rises to €10, the internal price will rise to 10 * 1.05 = €10.50.

3. How to set up Dynamic Pricing

3.1. Manual setup

These steps apply to both Ingredient and Recipe packages.

Go to Edit on the Ingredient/Recipe that will be delivered by your Internal Supplier. Open the Package & Pricing tab, create the necessary package, and click the + button to add a supplier to it.
Select your Internal Supplier (Warehouse/Central Kitchen) as the supplier.
Select the Dynamic Pricing option (1). Optionally, you can add a Margin % (2) and/or a Flat Fee (3) to the original cost of the package. You will see that the current cost of the package is calculated accordingly.
Save by clicking "Add Supplier Package". You will see a sign next to the package price.

3.2. Bulk setup via Excel

For large operations with many packages, you can use the Packages Excel file to enable dynamic pricing and adjust margins and fees in bulk.

To do this, go to your Ingredient/Recipe list, click Import, select Ingredient/Recipe packages, and download the template provided in step one.

You can also obtain this Excel file from the Export section, either by exporting the full list of packages or by selecting specific ingredients/recipes and choosing Selected Packages.
In the Excel file, you’ll find a section for dynamic pricing in columns Q, R, and S:
1. In column Q ("Dynamic Pricing"), enter 1 to activate Dynamic Pricing; otherwise, enter 0 or leave the cell blank.
2. In column R ("Margin in %"), enter the percentage margin to add to the package price (e.g., to add 10%, enter 10). Otherwise, enter 0 or leave it blank.
3. In column S ("Flat fee in default currency"), enter the fixed fee to add on top of the original price (e.g., to add an extra €2, enter 2). Otherwise, enter 0 or leave it blank.
Once finished, save the Excel file and upload it to Apicbase in the second step of the Import page.