Hello Friends,
In this section, we are going to talk about products and price books.
Learning Objective:
- What is product?
- Product and Service Based Selling
- Difference between product and asset
- Create Price Book – Standard and custom
- Create Product
- Relation between Product, Price Book, Price Book Entry
- OWD Setting of Price Book
- Schedule – Revenue Schedule and Opportunity Schedule
- Bonus – Interview Questions on Product and Price Book
Tip of the Day
When you are learning any concept in Salesforce, try to apply it to real world scenarios. This will help in broaden your understanding of why we are using a particular object or relationship in Salesforce.
What is the product?
It is an item, bundle or service offered to customer for a price. A useful definition for a product would be:
Anything a business sells that solves a market problem or addresses a customer’s need or desire.
Product-based Selling
Item: It is offering single item to the customer. Eg shoes, ice-cream etc.
Bundle: Package multiple products together and sell it to customer
Perfect example is Cadbury celebration
Service-based selling
When selling a service, it’s important to highlight what makes service personal and how we can meet the customers’ needs. Marketing services requires building trusting relationships with customers and customizing them as necessary. Generally, service businesses are less expensive to operate than product businesses because there’s no inventory, and the physical location of a service-based business is often irrelevant.
Example: Urban Clap come home and gives variety of services.
Difference between Product and Asset ?
Product is invention of the company. Through product company makes revenue. Product won’t have depreciation value for the company.
Asset is not tagged for selling but is for own use of the company. For example, Air Conditioner company is having inside the office is asset. It can have depreciation value.
Time for Hands on
Go to App Builder 🡪 Sales 🡪 Select drop down arrow -> Click Edit
Go to Navigation Items -> Add Product and Pricebook to Selected Items 🡪 Click Save
Now let’s create a product.
What are the different types of standard product fields in salesforce ?
Product name : Product name must be specified clear and familiar.
Product code : Product code is an internal code or product id which is used to identify a product.
Product description : We have to enter text in product description area to distinguish products from each other.
Product Family : Product family means it is the category of the product. By setting product family in salesforce the product automatically maps to it product family.
Confused ???????
Let’s understand with help of real time example. If you go to Amazon website, you will see different categories like Books, Beauty, Appliances etc.
Now if you select Beauty Category, you will be able to see different products related to Beauty Like Mascara, Makeup Remover, lip-gloss etc.
Now let’s build this in Salesforce.
Go to Setup -> Object Manager -> Product -> Fields and Relationship -> Product Family
Product Family is a picklist field. In that you can add picklist values based on different category. Then later you can associate a particular product to that product family.
Schedule
There’s a feature called Schedules that companies can use to define delivery cycles and payments for products. Companies that provide subscription services and product shipping often use this feature.
Schedules come in two types:
- Quantity Schedule – Determines when a product is delivered
- Revenue schedule – Determines when a product is paid for
When to use Quantity Schedules?
Take for instance magazine subscription. They bill subscribers annually and deliver the products on a monthly basis. They can use quantity schedules to help in monitoring the product units that need to be shipped and if there are any pending subscription payments that need to made.
Click on Quantity Schedule Enabled Checkbox in product record to Enable Quantity Schedule.
When to use Revenue Schedules?
A revenue schedule is suitable when customers make regular payments but receive the product once.
For Example, customer takes car on lease, he might do $400 per month for 48 months i.e. $19200 total. So, customer has signed contract for $19200 but monthly he is paying $400 i.e. he has got the product, in this case car but making payments in regular basis.
Go to Setup -> Product Schedules Settings -> Setup Schedules
Go to Product -> Page Layout -> Add Section “Schedule” and add below fields to the page layout
Create Product
If you are scheduling the product then fill in the below details
But every product needs to have a price for us to sell it in the market.
How do we define price?
We manage price of product using price book. There are two types of price book:
- Standard Price Book
- Custom Price Book
Standard price book
Every product that we create, we should have a standard price.
It is the default price that is associated.
Go to Price book Object -> Click on New and Create Standard Price book
Select checkbox besides Standard Price Book and Active
Go to Related -> In the Price book -> Select Add Standard Price
So, we have created our product and we have set the standard price.
Custom price books
When we offer our products to different people with different prices, then we go for custom price books.
For example, I am selling iPhone in India and US. The price will differ for iphone in India and US market. So, there comes the concept of custom price book.
Go to Pricebook -> Click New -> Create the price book
Go to Product -> Related -> Click on Add to Pricebook
Add the List Price $30 for US and $25 for India
So now I have different prices for different country.
Implementing various pricing options
Thus, using Salesforce price books, companies can specify different pricing options for products and services:
- Standard Prices: Default prices that companies establish for products when they fill in a standard price book.
- List Prices: Prices included in custom price books.
- Sales Price: Price for certain products specified by a sales rep for a particular opportunity.
Relationship Between product, price book and price book entry
- Products are represented by– Product2
- Price Books are represented by– Pricebook2
- Each of the entry in price book is stored in– PricebookEntry.
PricebookEntry is the junction object between Product and Price Book. Every price book entry will have the product and the price book ID. This is how the relationship works.
The Price Books Object has got three records. These are price book entries
So this price book entry object is the relationship object between products and price books.
OWD Setting for Pricebook Object
If we go to sharing settings, go for price book, and we will see that by default setting is set to Use
Q/A Section
How to use Price Books to sell products in multiple currencies?
If a company has a single price for a product regardless the currency, it can enable the multicurrency feature in Salesforce. Then, the conversion rates entered in Salesforce will automatically apply to product prices added to an Opportunity.
Scenario 1
If a company sets the Opportunity currency in USD and adds a product with a price in Rs, the price will be automatically converted to USD based on input exchange rates.
Scenario 2
If a company doesn’t want to adjust to conversion rates, it can create a single Price Book and set individual prices for products in each currency (e.g., Product A − USD 100, Product A − Rs 8000)
Can we delete Standard Price book?
A company can deactivate Standard Price Book, but not delete or archive it. In case a company changes prices in Standard Price Book, it may affect open and even closed Opportunities.
Can we delete Custom Price book in Salesforce ?
It’s not possible to delete Price Book while it’s in use on Opportunities or Quotes.
What is means to archive a price book ?
If a company decides that it won’t need a certain Price Book in the future, it can archive a Price Book even if it’s being used in Opportunities or Quotes. Once archived Price Books can’t be recovered.
How can we determine which price books are assigned to a user?
By default, the org-wide default setting for price book is “Use”. This means that any user with read access to both the “Product” and “Price Book” object will be able to select any active price book.
How to control access to Salesforce Price Books?
A company can control access to Price Books by setting the Organization-wide sharing rule on Price Books to “View only” or “No Access” and then giving access to a particular Price Book based on the Role, Public Group.
How to set access Level of Product ?
The products object does not use the standard record sharing model. Access to manipulate products is controlled by object-level security (profile & permission sets).
How to modify prices in Price Books?
User can modify prices in both Standard and Custom Price Books. This can be achieved in two ways:
- Manually
- Using Apex Data Loader
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