Configuring Pricing Terms

In Step 3 of the Contract Request Wizard, the Pricing Terms specify any discounts that are available for volume orders that are applied to your orders or invoices.

Discounted Price: A flat amount with the markdown applied.

• Only for item-level contracts​
• Can be used with both catalog and non-catalog items​
• Sets the price of the item

Discounted Percent: A specific percentage off of the original price.

• Used with all contract types​
• Can be used with both catalog and non-catalog items

Tiered pricing enables varying discount levels based on the purchase volume (in dollar amount or quantity) invoiced against a contract.

• Per Order: The best value tier applies to all items in an order.​
  • For example: An order between $100 and $200 applies a unit price of $4.00 USD to all items.​
• Cumulative: Prices are calculated across multiple orders or invoices, adjusting as volume thresholds are met.​
  • For multiple orders that cross pricing thresholds, the unit price adjusts based on the cumulative quantity and corresponding tier prices.

  • Example of Cumulative Pricing:

    If a contract specifies that purchasing up to 100 units costs $5 per unit, but purchasing over 100 units reduces the price to $4 per unit, then:

    • - An initial order of 60 units would be priced at $5 each.
    • - A subsequent order of 50 units brings the total to 110 units.
    • - The first 100 units are still priced at $5 each, but the next 10 units are priced at $4 each.
    • This cumulative approach ensures discounts apply based on total volume over multiple orders.

• Not applicable for service items in supplier-level and commodity-level contracts.​
• Not supported in configurations only using SAP Ariba Catalog or SAP Ariba Contract Invoicing.

* Only available for item-level contracts

* In this case, non-catalog item refers to an item created in the contract, not an item created by the requester during the requisitioning process.

Term-based pricing is used to configure discounts based on specified time periods within the life of the contract. SAP Ariba supports the following types of term-based pricing structures for contracts:​

​Term-based Discount (a percentage discount)​

Term-based discount pricing is valid for customer catalog and non-catalog items (if the contract allows), commodities, and suppliers.

Term-based Pricing (a fixed price discount)​

With term-based pricing, you specify different prices for an item based on specified dates. For example:

Formula pricing is used for partial items, where the price is based on a mathematical formula. Partial items are listed in catalogs and, as the name suggests, are missing certain specifics or information. These specifics could include details like size, color, or other choices which are required by a customer to make before adding the item to a cart and purchasing.

SAP Ariba supports different types of formula pricing, including Matrix and Multiplier pricing.​​

The following example shows one-dimensional matrix formula pricing for a printing job where the price is calculated as follows:

In this example, the pricing can be calculated by the following formula:

​​600 + Max (0,NumColors - 2) * 300.00 + 50.00 * (NumSheets/1000) + Max (0,NumColors - 2) * 40.00 * (NumSheets/1000)

SAP Ariba also supports a two-dimensional matrix in formula pricing, in which one variable can change value in response to a second variable’s value.​

​In the example below, the pricing formula for T-shirts uses a base price of $20 plus a two-dimensional matrix (size_color_matrix) that accounts for additional price markup required by the combination of size and color of the shirt.​

The formula would be:​

​20 + size_color_matrix

The variable size_color_matrix is a two-dimensional matrix that can be represented by a table:

Multiplier pricing is used to specify a base price and types which contain a multiplier to be used against the base price.​

​The following example shows multiplier pricing for a pipe item that considers material, weld type, and the shift of the person making the pipe:

Assuming the pipe has a base price of $5.00, if you select stainless steel pipe with an intersect weld type from shift 5 8, the price would be as follows:

$5.00 * 1.20 * 1.20 * 1.00 = $7.20

Notice that the different types are not related in any way. For example, the multiplier for the intersect weld type is always 1.20, regardless of which material or shift you select.

Matrix pricing is used to specify a price based on different related factors. The following example shows matrix pricing for temporary labor where one factor is the location and the other factor is the job class:

In this example, if an administrative assistant were hired in New York, the amount would be $45.00 per hour.

Compound pricing allows subagreements to take advantage of applicable discounts in parent agreements.​

Compound pricing is only available if the parent agreement uses a percentage discount​.

​The subagreement price discount is calculated first. The result is then used to calculate parent agreement price discount.

Override pricing allows a subagreement price to override the parent agreement price.​

This occurs automatically when: ​

• both agreements have item level price discount​
• the parent agreement is a no-release order contract​
  • otherwise, the contract with the lowest price is automatically selected​

When an item’s price is determined by a combination of a subagreement and its parent agreement terms, spend will be accumulated against both of the contracts and tracked using item-level accumulators.​

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For example, if the Master Agreement is an Item Level contract with a discount, which provided a lower price for an item than the subagreement, the system would automatically attach the Master agreement to the order created instead of using the higher price on the subagreement.