A key feature of Trading Programs is its library of mechanism plug-ins, from which Enable’s system administrators will select and create permitted mechanisms specifically for your business’s needs, as part of the initial Onboarding process.
Trading Programs uses mechanisms in order to define how rebate should be earned for a program line. When a user creates a program line, they must select a mechanism depending on how the rebate should be calculated for the program line.
It may be that a percentage is earned once a certain target transactions (e.g. trading partner spend) value is reached, or that a fixed amount of rebate is earned once transactions have increased from the previous year. Each of these options is available as a mechanism.
The two fundamental conditions for choosing a mechanism are knowing when rebate is earned and how rebate is calculated; the options for each are explained below.
The four options for when rebate is earned are as follows:
Guaranteed · This indicates that the rebate for this program line will always be earned (independent of transacted value).
Target transactions · This indicates that the rebate for this program line will be earned when transaction targets (value) have been reached, e.g. trading partner spend surpasses £1,000,000.
Target volume · This indicates that the rebate for this program line will be earned when transaction targets (volume) have been reached, e.g. trading partner spend surpasses 10,000 units.
Growth · This indicates that the rebate for this program line will be earned when certain growth thresholds are met, e.g. trading partner spend is at least 10% more than last year.
The three options for how rebate is calculated are as follows:
Fixed · This indicates that the rebate amount earned is a fixed amount, e.g. £5000.
Percentage · This indicates that the rebate amount earned is a percentage of the transactions that applies to the program line, e.g. 5%.
Per unit rate · This indicated that the rebate amount earned is a ‘per unit’ rate for the volume of units of the transactions that applies to the program line, e.g. £1 per unit.
The table below demonstrates which of the above options map to which mechanism. Hence, once a user has chosen when the rebate is earned and how it is calculated, they should use this table to identify which mechanism they should select when creating a program line.
Lump sum and apportioned
The Lump sum and Apportioned variations of the “Fixed amount” / “Externally calculated” mechanisms above determine if the rebate earnings are just applied to the program line, or if they should be apportioned (spread equally) among the relevant transactions so that they appear in the granular reporting.
An externally calculated program line means that the value of rebate earning is calculated outside of Trading Programs and can be updated at any point if necessary.
The table below explains the options in more detail:
Fixed percentage of price
The fixed percentage of price mechanism uses the Pricing App to determine the amount of rebate earned for a program line. It does this by taking each transaction line relevant to the program line and finding the Active Price for that product from the Price List and applying the configured percentage to it. If no such price exists then the earnings for this transaction line will be zero.
You can read more about the Pricing App here.
Targeted % with Ratio Targets
The targeted % with ratio targets is a mechanism where the earnings are a percentage of transactions, but the size of this percentage depends on the ratio of specified groupings of transactions.
For example, a program line for which you earn a 1% rate on the spend if 25% of all purchases were of a particular product group, 2% if 50% of all purchases were of that product group and 3% if 75% of all purchases were of that product group.
You can read more on this mechanism here: Targeted percentage rate with ratio targets
More information on configuring mechanisms is available here or to see more on each individual mechanism, click the links below: