Additional Discounts: Play an incredibly significant role in Salesforce CPQ. Additional discounts which can be entered by the sales users while creating the quote. They are different from system discounts. Customer price is found when Additional discounts are deducted from the regular price in CPQ price waterfall. If there is no partner and distributor price, then Customer price becomes the Net price. Hence in many scenarios Additional discounts play a critical role in calculation of net prices. In order to know the Salesforce CPQ Price Waterfall and standard pricing sequence, you may read my blog here.

Additional Discount Types: Additional discount can be of various types like, Percent, Amount, Unit and Total overrides. Percent is the discount percentage, For example as additional discount of 5% on List or Regular price. Amount is the absolute or the whole discount amount. For example, $1000 discount from a List or Regular price of $5000. Unit override completely overrides the List or Regular price and creates new unit price. For example, if the list or regular price of Lunchbox is $15 and we do a Unit Override of $5, then the new unit price becomes $5 and for 5 Lunchboxes the price becomes $25. In this case it completely overrides the last price in sequence, it could be List or regular. Total override is also a similar scenario.

These additional discounts come into action through as additional discount field on quoteline object. with the allowed 4 options (percent, amount, unit and total override). In case if we want to restrict users from using these then we have the option of excluding these picklist values from the additional discount field.

Let us use Salesforce CPQ Price Waterfall and see what the Net Price will be for Kitchen Foods when Qty ordered is 35 for these scenarios.

Scenario1 – Tango Foods offers Lunchbox at a List Price of $15. Kitchen Foods has been a major buyer of ‘Lunchboxes’. There is a system discount of 20% for quantities between 30 and 40. There is an additional 10% discount. KitchenFoods gets a partner discount of 5 %.

This one is straight forward:

a) List Price –> List price per unit is $15. For 35 units list price will be 35 * 15 = $525

b) Regular Price –> Let us first calculate the Regular Price per unit. Regular price per unitwill be List Unit Price minus system discount = $15 minus (20% of 15) = $12.  Regular price for 35 Lunchboxes will be 35*12= $420

c) Customer Price –> Let us first calculate the Customer Price per unit. Customer Priceper unit will be Regular price per unit minus Additional discount = $12 minus (10% of 12) = $10.8.Customer Price per unit is $10.8. Total customer price is $10.8 * 35 = $378

d)  Partner Price –> Let us first calculate the Partner Price per unit. Partner Priceper unit will be Customer price per unit minus Partner discount = $10.8 minus (5% of 10.8) = $10.26.Partner Price per unit is $10.26. Total customer price is $10.26 * 35 = $359.1

Since there is no distributor price, the net price here is $359.1

Scenario2 – Tango Foods offers Lunchbox at a List Price of $15. Kitchen Foods has been a major buyer of ‘Lunchboxes’. There is a system discount of 20% for quantities between 30 and 40. There is an additional $3 per unit discount on Lunchboxes. KitchenFoods gets a partner discount of 5 %.

a) List Price & Regular Price–> List price per unit is $15. For 35 units list price will be 35 * 15 = $525. Regular price per unit will be List Unit Price minus system discount = $15 minus (20% of 15) = $12.  Regular price for 35 Lunchboxes will be 35*12= $420

b) Customer Price –> Let us first calculate the Customer Price per unit. Customer Priceper unit will be Regular price per unit minus Additional discount = $12 minus $3 = $9.Customer Price per unit is $9. Total customer price is $9* 35 = $315.

3)  Partner Price –> Let us first calculate the Partner Price per unit. Partner Priceper unit will be Customer price per unit minus Partner discount = $9 minus (5% of 9) = $8.55.Partner Price per unit is $8.55. Total customer price is $8.55 * 35 = $299.25

Since there is no distributor price, the net price here is $299.25

Scenario3 – Tango Foods offers Lunchbox at a List Price of $15. Kitchen Foods has been a major buyer of ‘Lunchboxes’. There is a system discount of 20% for quantities between 30 and 40. There is a Unit Override of $7 per unit discount on Lunchboxes. KitchenFoods gets a partner discount of 5 %.

a) List Price & Regular Price–> List price per unit is $15. For 35 units list price will be 35 * 15 = $525. Regular price per unit will be List Unit Price minus system discount = $15 minus (20% of 15) = $12.  Regular price for 35 Lunchboxes will be 35*12= $420

b) Customer Price –> Let us first calculate the Customer Price per unit. Customer Priceper unit will be $7 as there is a complete unit override here so the List and Regular Unit price will be discarded. Total customer price will be 35*7 = $245

3)  Partner Price –> Partner Priceper unit will be Customer price per unit minus Partner discount = $7 minus (5% of 7) = $6.65.Partner Price per unit is $6.65. Total customer price is $6.65 * 35 = $232.75

Since there is no distributor price, the net price here is $232.75

Scenario4 – Tango Foods offers Lunchbox at a List Price of $15. Kitchen Foods has been a major buyer of ‘Lunchboxes’. There is a system discount of 20% for quantities between 30 and 40. There is a Total Override of $350 on Lunchboxes. KitchenFoods gets a partner discount of 5 %.

a) List Price & Regular Price–> List price per unit is $15. For 35 units list price will be 35 * 15 = $525. Regular price per unit will be List Unit Price minus system discount = $15 minus (20% of 15) = $12.  Regular price for 35 Lunchboxes will be 35*12= $420

b) Customer Price –> Customer price is Regular Price Minus Additional Discount. In this case, the additional discount is with a Total override. So, the List and Regular unit prices will no longer be applicable. The new total override Customer price is $350. From this Customer Unit price will have to calculated. So, the Customer unit price is 350 divided by 35 which is $10. 

3)  Partner Price –> Partner Priceper unit will be Customer price per unit minus Partner discount = $10 minus (5% of 10) = $9.50.Partner Price per unit is $9.50. Total customer price is $9.50 * 35 = $332.5

Since there is no distributor price, the net price here is $332.5

I am hoping that I have made the concept of Additional discounts in Salesforce CPQ Price Waterfall easy and simple to understand with various scenarios.

Your likes, shares and comments will motivate me to keep writing.