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      Setting Up Fixed Price Projects in Ressio: Selection Allowances and Markup Calculations

      Goes over the additional details required when setting up a Fixed Price project and the effect they will have.

      When setting up projects in Ressio, beyond choosing the cost structure—Cost Plus (Open Book) or Fixed Price (Lump Sum)—there are additional important settings to configure when working with Fixed Price Projects.

      This article will guide you through the key options available for Selection Allowances and Markup Calculations for Selections in Fixed Price projects.

      Selection Allowances in Fixed Price Projects

      When setting selection allowances in Fixed Price projects, you can choose how the allowance is displayed to the customer. There are two options:

      1. Builder Cost (Go Shopping Amount)

      • The customer sees the base cost of the item before any markups, taxes, or additional expenses.

      • This option clearly shows customers what they are allowed to spend if they want to stay in budget

      • Markups, taxes, and additional costs are added separately, depending on the markup rules selected. 

      • Useful for open ended selections where clients (or designers) will do their own shopping and you want to ensure they don't spend your profit.
      • Example
        • Builder set a lighting allowance of $6000 an additional 10% is added onto that total for markup bringing the total to $6600
        • Client will see that they have $6000 as an allowance to spend freely.

      2. Customer Price (All-In Amount)

      • The customer sees the total price of the item, which already includes markup, taxes, and other expenses.

      • This option fully hides your internal cost structure and profit margins from the customer.

      • It helps prevent the customer from reverse-engineering your markup or questioning your pricing.

      • Useful for pre-defined selections or upgrade choices where you want to be 100% clear with the client what the total cost of making that selection will be.
      • Example
        • Builder set a lighting allowance of $6000, 10% of which is set aside for markup.
        • Client will see they have $6000 as an allowance which they will know includes all costs and must budget accordingly.

      Markup Calculation Options for Selections

      Ressio offers three markup calculation methods for selections within Fixed Price projects:

      1. Variable Markup

      • The markup increases or decreases based on the actual selection price compared to the allowance.

      • Example:

        • Allowance: $1,000

        • Markup: 10%

        • If the customer selects an item costing $1,200, the markup increases to $120.

        • If the customer selects an item costing $800, the markup decreases to $80.

      2. Post-Lock: Can Only Increase

      • The markup increases if the selection exceeds the allowance.

      • If the selection is under the allowance, the markup is based on the original allowance.

      • Example:

        • Allowance: $1,000

        • Markup: 10%

        • If the customer selects a $1,200 item, the markup increases to $120.

        • If the customer selects an $800 item, the markup remains at the original $100.

      3. Post-Lock: Locked

      • The markup is fixed and does not change, regardless of whether the customer’s selection is over or under the allowance.

      • The markup is always calculated from the original allowance amount.

      • Example:

        • Allowance: $1,000

        • Markup: 10%

        • If the customer selects a $1,200 item, the markup remains $100

        • If the customer selects an $800 item, the markup remains $100.