Understanding Price Margin Rules in CloudCockpit

Price Margin Rules

This guide outlines the available price margin rules in CloudCockpit and how each affects your client pricing.
Determining the pricing strategy is a crucial aspect of business operations and these rules offer different ways to apply prices to Resellers, Customers, or even individual Subscriptions.

Info
ERP Price: The Microsoft recommended retail price for Customers.
List Price: The cost paid to acquire the subscription. Depending on the context in which it's being considered (CSP, Reseller or Customer).
Unit Price: The selling price of the subscription after applying the price margin. This also varies by context (CSP, Reseller or Customer).


Invoicing Settings

To achieve the intended pricing goal, also configure the additional Invoicing options available in Administration > Settings > Invoicing:

Microsoft Promotions: When enabled, eligible Microsoft promotions will be applied to your customers.

Markup Limit: Prevents the final price from exceeding the ERP price.

Discount Limit: Prevents the final price from dropping below the List price.

Margin over ERP for RIs: When enabled, allows margins to go over the ERP price for Reserved Instances created or renewed after January 1, 2023.


Price Margin Rules

Each margin rule gives you flexibility in defining pricing that suits your business model and agreements with Resellers or Customers.
Combine these rules with CloudCockpit’s invoicing settings to ensure margins stay within your desired range.

Markup

The Markup rule takes the List price of an offer and adds a percentage.

Info
List price + (List price x Price Margin Percentage) = Unit price for reseller

Example
As a CSP, I can make an agreement with the Reseller where I place a 25% margin over the List 
price of the offer.


Office 365 Business Premium
List price = 8,43€
Margin = 8,43€ x 0,25 = 2,1075€
Unit price for Reseller = 8,43€ + 2,1075€ = 10,5375€ 



ERP Price Minus Discount

On the ERP Price Minus Discount margin rule the ERP price is used for the calculation.
The percentage set is applied on the ERP price in order to reduce its value.

InfoERP price – (ERP price x Price Margin Percentage) = Unit price for reseller

Example
As a CSP, I can make an agreement with the Reseller where I place a 10% discount on the ERP
price.


Office 365 Business Premium
List price = 8,43€
ERP price = 10,50€
10% Discount = 10,50€ x 0,10 = 1,05€

Unit price for Reseller = 10,50€ - (10,50€ x 0,10) = 9,45€ 



Split Margin

Split Margin Percentage lets you set a percentage of the difference that you have 
between List price and the ERP price.

Info(ERP price – List price) x Price Margin Percentage + List price = Unit price for reseller

Example
As a CSP, I can make an agreement with the Reseller that I charge 25% of the margin between the Microsoft's List price and ERP price.


Office 365 Business Premium
List price: 8,43€
ERP price: 10,50€

Unit price for Reseller =  (10,50€ - 8,43€) x 0.25 + 8,43€ = 8,9475€ 



Margin

This rule increases the unit price above the list price according to the defined percentage.

Info
List price / (1 – Price Margin Percentage) = Unit price for reseller

Example


Margin to apply: 10% 
List price = 8,43€

Unit price for Reseller = 8,43 / (1 – 0,10) = 9,37€

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