Price as part of a competitive strategy: what the owner must decide before making any adjustments to the accounting system

To successfully implement a competitive strategy, a business owner must make a number of key management decisions even before starting the technical setup in the accounting system. Based on the functionality of the Torgsoft software, here is a list of strategic questions that determine the further logic of the system.

1. Pricing Strategy and Currency Risks

The owner must decide how the base product price is formed and how the business responds to exchange rate fluctuations.

• Currency pegging. Will the product price be fixed in the national currency, or should it change dynamically depending on the dollar/euro exchange rate? The system allows accounting in the national currency, while automatically recalculating retail prices based on the currency equivalent and the current markup.

• Markup calculation method. Will the markup be fixed for product groups or individual for each product? The owner can set the markup as a percentage or as a fixed amount (UAH) from the purchase price.

• Rounding rules. How should price tags look for the customer? Should you use "psychological prices" (for example, endings of 0.99 or 9), or round to whole numbers/tens of kopecks to simplify cash payments.

2. Geography and Sales Channels (Omnichannel)

It is necessary to define the pricing policy for different sales locations.

• Single or regional price. Should the price be the same in all stores of the chain, or can it differ depending on the region (for example, higher prices in the capital, lower in the regions)? The system has a setting to "Maintain the same prices at all retail locations" or use regional price lists.

• Online and offline prices. Will the price in the online store differ from the price on the shelf in a physical store? The owner must decide which price source is the priority for synchronization with the website or marketplaces (Prom, Rozetka).

3. Wholesale and Retail Policy

The owner must define the rules for switching from retail to wholesale pricing.

• Wholesale criteria. What is the trigger for wholesale pricing — customer status (for example, dealer) or the quantity of goods purchased? You can set up an automatic switch to wholesale pricing when purchasing a certain number of units (for example, from 5 pcs.).

• Priority. What is more important — the store type (wholesale warehouse) or the customer status? If a retail customer comes to a wholesale warehouse, at what price do they buy? It is necessary to configure the priority of the trade type.

4. Loyalty and Discount Strategy

Before setup, the owner must approve the marketing policy so as not to lose margin.

• Discount system type. Will it be a fixed discount, an accumulative system (where the percentage increases based on the purchase amount), or a bonus system (cashback)?.

• Discount limits. Are there indicator products or products with a minimum markup to which discounts do not apply or are limited? The owner must decide whether to allow discounts to "eat up" the profit down to cost price.

• Promotions. What customer acquisition mechanics will be used (for example, "Bring a Friend", discounts for birthdays)?.

5. Margin and Personnel Control

This is a critical aspect of business security.

• Prohibition of loss-making sales. Should the seller be allowed to sell a product if, as a result of the discount, the price falls below cost price? The system allows you to configure the minimum sale price control (prohibit, warn, or allow).

• Staff permissions. Who has the right to change the price in the receipt manually or apply a discount? This decision determines the access role settings for cashiers and administrators.

• Cost calculation method. How should profit be calculated — by the latest purchase price, by the average, or by delivery batches (FIFO)? This is a strategic financial decision that affects how the system will display the business profitability.

Before starting work with the software, the owner needs to have clear answers to the following questions: "At what price do I buy?", "At what price and under what conditions do I sell?", "What is the minimum profit I am ready to accept?" and "How much do I trust the staff to change the price?".