RON: Let’s go ahead and dive in. Why don’t you give us a definition of MTP, multi-tiered pricing, CSP or customer-specific pricing, some clients call it pricing rules. Go ahead and tell me what your definition of multi-tiered pricing is, especially when it comes to eCommerce groups.
CHRIS: At the end of the day, you want to be in a position where we're transferring accurate pricing data based on things like loyalty, quantity, possibly for a specific shipment, or fulfillment. Are we meeting a certain minimum threshold that the manufacturer or distributor needs, and, is this particular customer one of the first customers, or are they a certain type of customer? Are they purchasing or enrolled in a membership program of some type that gives them a specific type of discount? And then the combination of all of those factors needs to result in the actual pricing data that's shown to the user.
We should also be able to present a retail or a public version of the group purchasing site to folks. So this may mean that no pricing shows up unless you're logged in. It may show retail pricing. Then, once you're logged in, you see specific pricing data based on your account. There could be a scenario where it makes sense to change the pricing based on the physical location that we're shipping to because it's physically more proximate, it's getting fulfillment from a different fulfillment location. So we may want to show pricing data based on that breakdown.
These are all scenarios that can apply. Ultimately, we want to go through each of these and just break them out into detail and explain how you might be able to leverage some of these techniques to encourage your members within the buying group, and really to make it a profitable enterprise for everyone.
Really, to the extent that you can take advantage of these pricing rules and the presentation thereof, you're going to be managing the expectations and helping your customers truly understand how the business works, how the buying group website works, and how to take advantage of that for themselves. So what do you think, Ron? Anything else you want to add to that?
RON: Yeah, I love everything you've talked about. Sometimes, for some, they're like, “Wow, that's really complex. Break it down, really simple.” Okay, [here’s the example]. Costco. If I walk into Costco and try to buy, maybe they'll sell to me without a membership, but I would pay retail price. If I have a membership, I pay a different price. There's the tiered pricing, a member price. It's a different price.
And then they now sell an executive membership. Now, some might, at that executive membership think, do I get a better price? You don't. There's only one price. There's retail, there's member price. That's it. If you buy the executive membership, they give you 1% back and they pay that check every summer. You get a check with 1% cashback, in that case, a loyalty program.
So that right there is very simple tiered pricing. There's only one-tier, member or not. And then if you go to the second tier, instead of being a different tiered price, they make it a loyalty program where you get 1% cashback, and that's why they call it an executive membership. If you're doing a lot of bulk buying for businesses and can get 1% back, then that's obviously a bonus. So they've broken out that tier for corporate accounts. And so there is a two-tiered, very simple group buying platform. But yeah, they can get really complex, and there can be all kinds of different tiers.