Channel/Currency Price Calculation

The price of a book is calculated after considering the variables namely Tax Rate, Currency Conversion rate and Rounding Rules.

A publisher will have a Base Currency in which it does all its business transactions. Each book that the publisher distributes to the Distribution Channels will also have a Base Price. And lastly, all distribution channels may not have the same Base Currency as the Publisher.

All these variables can make the Price Calculation of a book a little confusing.

Method for Price Calculation

Scenario: Lets assume that we have a Publisher and a Distributor channel that have different Base Currencies and the region where the book is to be distributed attracts a 10% Service Tax. Let us say, Rounding Rules apply too.

Publisher ABC (Base Currency=GBP)

Distributor DEF (Base Currency=USD)

Base Price of the book=10GBP

The correct way to calculate the price is given below:

1. Firstly, find out the price of the book after the Service Tax is levied. So for our scenario, the price of the book will be 11 GBP. (10% of 10 is 1)
   Note: Service Tax is not the only modifier value. Modifier values can also be a discount in percent or a fixed value discount.
2. Now, you can apply the conversion rate of the currency you are converting, into the actual price of the book. (Actual Price = Base Price + Service Tax)
   For our scenario, lets say, the conversion rate of GBP to USD is 1.62.
   Therefore, the calculated price of the book in USD is 17.82.
3. If Rounding Rules does not apply, the calculated price of the book for distribution will be 17.82 USD.
   But if Rounding Rules apply and lets assume USD is rounded up by 0.99; then the calculated price of the book will be 17.99 USD.

So all in all, price is calculated in 3 simple steps

1. Add/subtract the Modifier Value to/from the Base Price.
2. Apply Conversion Rate.
3. Round off the value. (Prices are always rounded up)

The calculated value is the price of the book.