Pricing arrangements in commercial agreements

PRICING ARRANGEMENTS IN COMMERCIAL AGREEMENTS

A key thing in procurement is justifying why you spent how much you spent on whatever it is that you spent it on. That makes price a key component and as such the need to understand Pricing arrangements in commercial agreements. The problem is that price is never really a fixed number. The cost of production, which is a key aspect in your profits, could be fixed but price…not really. This page contains video lessons and articles intended to make you learn more on how Pricing arrangements in commercial agreements works.

INTRODUCTION

Check out more VIDEOS

VIDEO 1: FACTORS AFFECTING PRICE

There are a number of factors that go into determining price and in this lesson we look at such factors as well as what to expect regarding the subject of Pricing arrangements in commercial agreements especially how they can be used in commercial agreements to ensure effective price and cost management

VIDEO 2: Understanding PRICING SCHEDULE

In purchasing process there are two points that you have to pay attention to, 1)The price the seller won’t go below and 2) And the price above which the buyer won’t buy. Between these two you have your zone of potential agreement; basically where you will have the agreed price. Truth is the supplier will push for higher price and the buyer will push for lower price. How then do you get a fair price?

VIDEO 3: FIXED PRICING ARRANGEMENTS

At times you end up in situations where you as a buyer or client explain what you need done and the supplier tells you how much that would cost you. In the end you settle for a fixed-pricing arrangement. But what is a fixed-pricing arrangement?

VIDEO 4:COST-PLUS PRICING AGREEMENTS

The idea behind cost plus arrangement is fairly straight forward, You calculate all the cost associated with product or service then apply a markup percentage and you have your asking price here we look at how this work practically.