How to Create and Use “Allowance” Catalogs in EQ
Many times dealers have to quote someone a job before the customer decides exactly what they want. To do this they use allowances. This could be something like “$5 Cabinet Hardware Allowance” to capture x-pieces of $5 hardware so you can give them a quote before they decide which hardware they actually want. Once the customer decision is made, it may be more or less than the allowance. You can then replace the allowance with the actual hardware selection and make pricing adjustments if necessary. This works with Plumbing, Flooring, Lighting and anything else you sell.
Here’s how you use a formal Allowance Catalog to help with this process.
Step 1 – Create Your “Allowances” Catalog
You can create your own catalogs in EQ via the Catalog Creator (Setup / Catalog Management / Catalog Creator) [Only Administrators can do this].
Typically you will pick your company as the Supplier since it’s just for allowances. Then name the catalog what you want, and make default selections for Shipping.
The “Use Pricing Profile” checkbox means that you’ll only put the Cost in the catalog for the allowance, and the Pricing Profile chosen on the Quote will determine what margin it sells for. This is typically desired since you may sell at different margins for different customers (via the Profiles). If you want to hard code the Sell price, do not check that box. You will then put the Cost AND the Sell in the catalog and it will ALWAYS sell for that amount. The same is true for the “Use Installation Profile” checkbox.
Hit SAVE CATALOG and you have an empty Allowance catalog. Now fill it with what you want like this:
Notice how you can have a product allowance AND an installation allowance built into the same item? When you add one of these allowances, it will charge for both the product Cost/Sell and the installation Cost/Sell, (if you’ve checked the “Charge for Install” checkbox on the line item).
If you elect to let the Pricing Profile determine how much to sell each item for, then make sure your profiles are set up with the desired margin for the allowance catalog.
That’s it! You’ve got a functional allowance catalog to use.
Step 2 – How to Use the Allowance Catalog
With the catalog in place, you pick the allowance items just like any other catalog items.
Notice how they’re added to your Quote. The cost, sell price and other information are already baked in.
Now you’re ready to give them a proposal with allowance numbers included.
Step 3 – Add the REAL Selected Items
Once the customer accepts the proposal and goes through the process of making their true choices, (we’ll use Hardware for example), you have a few options on how to handle it. This is the typical way dealers do it.
1) Add the catalog items the customer selects (from the actual supplier hardware catalog for example). This will put the actual hardware on your Order, with the true Cost and Sell for those specific items.
2) Price Difference – Most likely, your allowance will not be the exact price as the selected hardware. You will need to decide if you have to change the numbers for your customer. For example, if you gave them a $15-per-piece hardware allowance, and they chose a $50 hardware instead, you’re not going to give them that hardware for the $15 allowance. You would tell them, “Your allowance was $15 per piece, but you chose $50, so your new price is “X”.
You figure this out after you have added the actual product items to your order. You’ll then either delete the allowance line item, or zero it out by clicking the “Misc Item” checkbox and overriding the Cost/Sell with zero. Some do this so they can keep the allowance line item (at zero Cost/Sell) to document what they originally used for the allowance.
Usually what the customer chooses for hardware is only slightly different than the allowance, so you will probably just want to adjust the sell price of your order to match what you originally quoted with the allowances.
For example, your original proposal came to $25,000 total with a $500 allowance for hardware. If the selected hardware comes out to $475 instead of the $500 allowance, the new total (after adding the hardware line items and removing the amounts on the allowance) would be $24,975. You would then do a $25 dollar adjustment on the pricing tab to bring it back to the $25,000 total.
Give it a try!
If you have any questions on Allowances, emails us at email@example.com