wiseGEEK: What Is a Pricing Schedule?
A pricing schedule is often a sheet of information that displays the charges for a company’s goods or services. For example, if a company charges a slightly decreasing rate for increased volume purchases, this sheet is typically called a pricing schedule. In most cases, a company does not disclose its prices or price schedule to just anyone; the sheet is most often available to those companies or clients who purchase items from the business. Additionally, a company can have multiple schedules for different client types or businesses in certain sectors. This allows a company to tailor its services to specific clients and how they operate.
Vendors and suppliers are most often the companies that make use of pricing schedules for their clients. Here, the sellers present each client with a schedule for goods or services that lists prices for different items. New clients may receive a slight discount in order to induce new business ; this most often works for volume purchases. Other times, repeat clients may receive more of a discount in order to maintain business. Either way, the pricing schedule represents a flexible approach to working with clients.
The creation of a pricing schedule may be a way in which
a company can control the market or stave off competition from other businesses. For example, if a company knows the market rate for a good or service, it can create a pricing schedule that works around this market price in a competitive manner. That is why many of these schedules tend to be regressive when it comes to the price of goods or services. Companies are more willing to shrink profits on large-volume sales in order to prevent a competitor from getting the business. In some cases, this practice may be close to an alternative form of price skimming. which is a common pricing strategy.
A different form of a pricing schedule is the use of this item in a contract or bid for goods and services. In a bid process, several companies go after a certain amount of business with a single client. In order to incur future business or more contracts, a pricing schedule with reduced prices can help win the business from this new client. Or, the new client may be willing to give more business to the vendor or supplier with the biggest volume discounts in the bid or potential contract. Either way, the pricing schedule works the same.