SKUs & Line Items
The most important part of building a business is an ever-evolving pricing strategy based off of rock solid pricing models. RevOps is built to allow your sales team the flexibility to sell their products, no matter how you price them. There are endless ways to price SaaS products.
What are SKUs and Line Items?
SKUs, also known as stock keeping units, were traditionally scanned codes to help vendors track the movement of inventory. Businesses would create a unique SKU for each good or service offered to track sales data and know when the product needed to be restocked. Within RevOps.io, each SKU also represents the products or services that could be sold. When an SKU is added to the Sales Agreement, a line item is created. This line item represents the agreed upon product or service and price which your customer is purchasing.
What's the difference between SKUs and Line Items?
SKUs are a representation of the product or service offered by the business, while line items represent the agreed upon product or service purchased. The business will list the product at a "recommended" price; this is known as the list price or MSRP (Manufacturer's Suggested Retail Price) of the SKU. However, when the product is sold, it may be adjusted due to the needs of the specific customer, the quantity sold, and the agreement terms. To keep track of the unique pricing, quantity, and other entitlements that may only be available to the customer for that particular agreement, a line item is created. Since RevOps tracks them separately,
- Your business may update SKUs without impacting any active deals that are underway.
- The same SKU may be added to the order form multiple times. By doing so, you create multiple line items which you may then choose to discount differently or offer throughout different periods of the agreement. While SKUs and Line Items appear almost identical, by making them two separate objects we're able to clearly keep track of what the business offers versus what the customer purchased. Most of the time, Sales Users are interacting with line items while Admins and Operators are managing the SKUs.
Additional Resources
📄️ How to Create a Credit SKU
Credit pricing models are common for platforms that allow cheap, bulk actions where it’s easier to charge based on “blocks” of usage instead of per individual event. This can be known as block, chunk, or pack-based pricing.
📄️ How to Create a Flat-rate SKU
Flat-rate pricing models are common for early stage businesses that know a good base price for their product or service, but still need to investigate their target price., examples are early stage platform subscriptions.
📄️ How to Create a One-time SKU
One-time pricing models are the most common way of doing business. A non-recurring pricing structure where a product or service is sold as a one-time fee. Common examples are hardware setup, pilot, or implementation fees.
📄️ How to Create a Per-feature SKU
Per-feature pricing models are the most common for platforms that have nailed down their base pricing and now expanding secondary, add-on functionality. The model is combined with the Per-user pricing model to control access to the additional features.
📄️ How to Create a Per-user SKU
Per-user pricing models are the most common for subscription platforms. Known as a license, seat, or user-based model, it is the most well known across most industries.
📄️ How to Create a Schedule SKU
Schedule pricing models are prevalent in the consumer space and are more commonly known as Free Trials. RevOps knows these as Schedule, but they can be called Ramped, Trial, and Pilot pricing.
📄️ How to Create a Usage SKU
Usage-based pricing models are most common in SaaS platforms that automate some action or store some type of data and expect high volumes of them from their users. Examples are API requests to an external API, or metrics pings to store some type of high interval data.
📄️ How to Create a Volume SKU
Volume pricing models are prevalent in the business-to-business space, where the seller wants to incentivize the buyer with discounts when they buy more products or services at the same time. This is similar to the Credit pricing model, except there’s usually no need to set rules regarding rolling over unused units.
📄️ Managing line item service dates
Service dates, like start or end date, can be configured on each line item to communicate when the product or service purchased will begin and end. This can be useful when defining a pricing schedule or "scheduling" the line item, you may know this as "scaling" or "ramping". At RevOps, we use our Schedule line items to achieve this.
📄️ Permissions
How to Restrict Discount Types
📄️ Supported Currencies
RevOps supports quoting with the following currencies: