What Is the Difference Between Upselling & Downselling?

Up-selling is a marketing technique where you try to convince a customer to purchase a more expensive
product. For example, if a customer looks to purchase an entry-level laptop computer, you could attempt
an up-sell by informing him of the upgrades of a mid-range or premium laptop. A down-sell involves a
reversal of the up-sell. If a customer does not want the product you want to sell, you suggest a cheaper
alternative. For instance, when a customer cannot afford a laptop, you might suggest an older model
desktop that costs less.

Benefits

Although your higher-priced items may have a larger profit margin, down-selling can be just as or more
important to your company. Entry-level products can help you build brand loyalty when a customer cannot
afford premium products at the moment. For example, one boutique that sells purses found that sales were
dropping because customers could not afford the item. Instead of slashing prices and potentially diluting
the market with their product, the boutique designed a cellphone holder with a similar design as their
purses but at a fraction of the price of their handbags.

Cross-Selling

Related to up-selling and down-selling is "cross-selling." Using the cross-selling technique, you offer
related products and services to the initial purchase. Warranties are a common cross-selling technique. If
someone buys a computer for $300, for example, you might offer a warranty to replace the computer in
case it breaks for $100. Cross-selling also builds brand loyalty.
2. Difference between contract and agreement
There is an old statement, “All contracts are an agreement, but all
agreements are not contracts” which implies that agreement is different
from a contract. Without knowing the fact, we enter into hundreds of
agreement daily, which may or may not bound us legally. Those which bind us
legally are known as a contract, while the rest are agreement.
An agreement is any understanding or arrangement reached between
two or more parties. A contract is a specific type of agreement that, by
its terms and elements, is legally binding and enforceable in a court of
law.
Pricing:
The condition technique is used to define pricing across applications.
Condition type is a representation of a pricing element. Condition types exist for discounts,
surcharges, and freight costs

Condition table defines the combination of fields (the key) that identifies an individual
condition record.
The system stores the condition data you enter in the form of a condition record. For
example, when you enter a vendor’s pricing in a purchasing info record with
reference to a material master record, the key of the condition table includes the
vendor number and the material number.

1.The Condition technique is used to define pricing across application

2.Condition type is a representation of a pricing elements
3.candition table define the combination of fields(the key) that identify in individual condition
record
4. A condition record is defined as how system stores the specific condition. Example of
a Condition Record − Entering the price of a product or to specify the discount for a
privileged customer.
5.Access Sequence: This is the search strategy, which is used by the system to find valid
data for a particular condition type. It tells about the order in which a system searches for the
data. An access sequence consists of one or more access sequences.

Dear readers, these SAP SD Interview Questions have been designed

specially to get you acquainted with the nature of questions you may
encounter during your interview for the subject of SAP SD. As per my
experience good interviewers hardly plan to ask any particular question
during your interview, normally questions start with some basic concept
of the subject and later they continue based on further discussion and what
you answer −
What is SAP Sales and Distribution?

SAP Sales and Distribution is one of key component of SAP ERP system and is used to
manage shipping, billing, selling and transportation of products and services in an
organization.

SAP Sales and Distribution module is part of SAP Logistics module that manages customer
relationship starting from raising a quotation to sales order and billing of the product or
service. This module is closely integrated with other modules like SAP Material Management
and PP.
What is Sales and Distribution life cycle? What are the key steps?

What do you understand by Organization structure in SAP Sales and Distribution?

SAP SD organization structure majorly consists of two steps: Creation of Organization

elements in SAP system and second is to link each element as per requirement. On the top of
organization structure in SD module, sales organization is at highest level and is responsible
for distribution of goods and services.

SAP recommends to keep number of sales organization in organizational structure to be

minimum which helps in making reporting process easy and ideally it should have a single
Sales organization.
What is Sales area, Distribution channel and division in SAP Sales and Distribution?

 Distribution channel tells the medium by which products and services are distributed
by an organization to its end users. Division in an organizational structure represents
a product or service line in a single organization.

 A Sales area is known as entity which is required to process an order in a company. It

is comprised of Sales organization, distribution channel and a division.

 In SAP SD organizational structure, each sales organization is assigned to a company

code. Distribution channel and divisions are assigned to Sales organization and all
comprise to make a sales area.
What is the use of Sales area?

A Sales area is known as entity which is required to process an order in a company. It is

comprised of Sales organization, distribution channel and a division.
Can you do delivery without shipping point?

No, shipping point is required to perform goods delivery.

Is it possible to create invoices without delivery?

No, invoice is not possible without delivery.

Give an example of Material Management integration with Sales and Distribution?

Consider an example of creating a sales order in SAP SD, it involves copying details of item
from Material Management.

Availability check of the item and price details are also taken from MM but this can be
controlled this data in SD module. To create inbound and outbound delivery of goods for a
sales order, shipping details, loading point etc. also come from Material Master.
What is the use of SAP FI in SAP Sales and Distribution?

In case of standard sales order, you create an outbound goods delivery to the customer. Here
movement 601 takes place. This movement is configured in MM and movement of goods hit
some G/L account in FI.
What are the link point of SAP Sales and Distribution with other SAP modules?
 Link Points Module Involved

Availability Check MM

Credit Check FI

Costing CO/MM

Tax Determination FI

Transfer of Requirements PP/MM

What is the use of partner function in SAP Sales and Distribution?

Partner function allows you to identify which functions partner has to be perform in business
process. Consider a simplest case, where all the customer functions are performed by partner
customer. As these are mandate functions they has to be defined as obligatory functions in SD
system.
What are different partner type functions available in SAP SD?

Below partner types are Customer, Vendor, Personnel, Contact Person and common partner
functions as per these partner types are −

Partner Type Partner Function Entry from Master Record

System

Sold-to party (SP)

Customer (CU)
Ship-to party (SH) Customer
Customer master record
number
Bill-to party (BP)

Payer (PY)

Forwading agent
Vendor (V) Vendor number Vendor master record
(fwdg agent)

Human Employee Personnel

Personnel master record
resources (HR) responsible (ER) number
 Sales personnel
(SP)

Contact Person Contact person (CP) Contact partner (created in customer master
(CP) number
recors, no master record of its
own)

What are the different Customer account groups that you can create in SAP SD?

 Domestic customers
 Export Customers
 One Time Customers
What is a Sales activity? What are different sales activity that you perform in SD?
All Sales activities in SAP SD system can be divided into presales and post sales activities.
Presales activities are classified as activities which occurs before product is sold to customer
and post sales activities are those which occurs after product is sold.

 Pre Sales Activities − Inquiry, quotation

 Post Sales Activities − Support, Relationship management

What is the use of Sales support in SAP SD module?

Sales support is one of the key component in Sales and Distribution SD module. It is also
called computer Aided Selling SD-CAS.

This module helps organizations to create new sales, tracking of existing sales, and
performance and eventually help in improving marketing and sales in an organization.

SAP SD Sales support module provides an option of creating email list for the customer and
directly sending mails for new leads.
What do you understand by Sales Order processing?

Sales order processing describes a function related to whole sale part of an organizational
business. Common functions under sales order processing −

 Availability of the articles purchased

 Checking for incomplete data
 Checking the status of the sales transaction
 Calculation of pricing and taxes
 Schedule the deliveries of goods
  Printing of documents or e-transfer of documents
What is the structure of Sales Order in SAP SD? How can you create, edit or display an existing sales
order?
Structure of a Sales Order −

An inquiry from a customer consists one or more items that contains the quantity of a material
or service entered in the order.

The quantity in a Sales order is further divided into business lines and comprise of various
subsets and delivering dates.

Items in Sales order are combined in a hierarchy and allows to differentiate between batches
or to use combinations of materials.

All the valid conditions on the items are mentioned in item conditions. These conditions for
an item can be derived via a full condition and can be valid for entire sales order.

You can divide an item to multiple billing plan deadlines and each tells the time when a fixed
amount of the item is to be billed.

 VA02 − Edit a Sales Order

 VA03 − Display a Sales Order
 T-Code − VA01 Create a Sales Order
What is an inquiry under presales activity? How to create a new inquiry?
An Inquiry is not a legal document and is used to record the information about delivery or
services from customers. The information that is captured using an inquiry is related to
materials and quality of goods.

Menu Path − Logistics → Sales and Distribution → Sales → Inquiry → Create

T-Code − VA11
How can you create a quotation in SAP Sales and Distribution?

Quotation is a legal document to customer for delivery of goods and services. This is normally
issued after an inquiry from customer or without an inquiry.

 SAP R/3 Menu

 Logistics → Sales and Distribution → Sales → Quotation → Create
 T-Code − VA21
What is the difference between a Sales activity and a sales document?
Sales Activity −

Sales activities are categorized as Presales and post sales −

This include when you sell material rather you do your preparation for sales with the
customer...

Sales Call, Phone Call, Sales Letter, and post sales like support and relationship, etc.

Sales documents −

These documents are considered under sales, where you sell the materials to the customer and
are created in SAP system to manage sales process.

Example − Sales orders, Quotations, etc.

How do you assign a sales organization to delivering plant?

 SPRO-IMG-Enterprise Structure-Assignment-SD-Assign Plant to Sales

Organization/Dist.Channel

 T-Code − OVX6
Is it possible to process outbound delivery without a shipping point?

No
What is the use of Sales support function in SD module?

Sales support is one of the key component in Sales and Distribution SD module. It is also
called computer Aided Selling SD-CAS.

This module helps organizations to create new sales, tracking of existing sales, and
performance and eventually help in improving marketing and sales in an organization.

SAP SD Sales support module provides an option of creating email list for the customer and
directly sending mails for new leads.

Sales support stores all the data related to sales and distribution related to customers, products,
materials, competitor products, etc.
Give an example of a sales process from presales activity to free of charge replacement?

There is a customer telephone inquiry in the system and then customer requests a quotation
which can be created by referring to same inquiry. Next is the customer place an order on the
basis of quotation and a sales order is created by copying the information from the quotation
and if any modifications are required.

Merchandise is shipped and bill is sent to the customer. After the delivery of goods, customer
raises a claim damaged articles, a delivery can be created free of charge with reference to the
sales order.
What are different sales document in SAP system? How to create a sales document?
There are different types of sales document that can be defined in SAP system −

 Credit Memo
 Debit Memo
 Standard Order
 Delivery Returns, etc.
To define a Sales Document

Enter T-Code − VOV8 or SPRO → IMG → Sales and Distribution → Sales → Sales
Document → Sales Document Header → Define Sales Document Type
In SAP Sales process, a standard item function is same as function of free or charge item or text
item?

No
What are the different factors to be considered while defining different types of item categories?

 General Data Control Elements

 Shipping data Control Elements
 Billing Data Control Elements
What are different schedule line categories as per different sales document?
Inquiry −

 No Delivery of an item
 No Availability check
 Information purpose
Quotation −

 No Delivery
 No Movement
Order −

 Schedule line is suitable for delivery

 Movement type 601
Return −

 Schedule line is suitable for delivery

In a sales order how system does picks up plant?
You can assign particular material master to particular Plant and it picks up from there.
Why do you use pricing date in condition type?

It shows date of calculation of pricing procedure for that Particular document. So that in future
you can see the date on which pricing calculated for that particular document.
What is the use of copy control, explain?

Copy Control is defined as a process in which important transactions in a sales document are
copied from one document to other. It consist of routines which determines the system how
the data is to be copied from source document to target document.

A SAP system contains number of these routines and you can also create additional routines
to meet the business requirements. To create a new routine you can use an existing sales
document as a reference.

How to find Copy Controls in SAP system?

These controls are created and configured under IMG and can be found at below menu path
−

 SPRO → IMG → Sales and Distribution → Sales → Maintain copy control for sales
documents

 SPRO → IMG → Sales and Distribution → Shipping → Specify copy control for
deliveries

 SPRO → IMG → Sales and Distribution → Billing → Billing Documents → Maintain

copy control for billing
What is pricing in Sales and Distribution? Explain?

Pricing in Sales and Distribution is used to define the calculation of prices for external vendors
or customers and cost. Condition is defined as set of conditions when a price is calculated.

Example −

Consider a case when a customer orders specific quantity of a product on a particular day.
Various factors like customer, product, order quantity and date tells the final price to customer.
This information is stored in the system as master data in the form of condition records.
What are the different pricing elements in SAP system?

There are various pricing elements like prices, surcharges, discounts, and taxes are defined in
SAP system as condition types. To manage pricing information for a pricing element in a
system, you have to create condition records.
What is condition record and condition table?
A Condition table is defined as combination of keys to identify an individual condition record.
A condition record is defined as how system stores the specific condition.
Give an example of condition record and condition table?

Example of Condition Record −

Entering the price of a product or to specify the discount for a privilege customer.

Example of Condition Table −

Condition records for a customer specific material prices are stored by a sales department.
SAP system contains a conditional table 005 for this purpose. Key of table 005 includes below
field −

 Customer
 Material
 Sales Organization
 Distribution Channel
First two fields − Customer and Material determines the relationship between customers and
specific materials. Last two fields are used to identify organization data in SAP system.
What do you understand by condition technique and type?

Condition type is defined as specific features of daily pricing activities in SAP system. Using
condition type you can also put different condition types for each pricing, discounts on goods,
tax and surcharge that occurs in business transactions.
Any example of using condition technique and type?

Condition type allows you to define the discount for special material. This can be specified in
the system to calculate discount as an amount or it can calculate discount in terms of
percentage.

In case you have to use both discount types, two separate condition types has to be defined in
the system.
What are the predefined condition types in SAP SD system?

Condition Type Desccription

PR00 price
 K004 Material discount

K005 Customer-specific material discount

K007 Customer discount

K020 Price group discount

KF00 Freight surcharge (by item)

UTX1 State tax

UTX2 Country tax

UTX3 City tax

What do you understand by surcharge and discount? What are predefined discount type in SAP
system?
A standard SAP system includes variety of common discount types. You can also define
customize discounts and surcharges as per business requirement.

Standard SAP system includes below discount types −

Discount (Key) Kind of discount

Customer (K007) Percentage

Material (K004) Absolute

Price group (K020) Percentage

Material group (K029) Absolute discount by weight

Customer/material (K005) Absolute

 Customer/material group (K030) Percentage

Price group/material (K032) Absolute

Price group/material group(K030) Percentage

Rebate processing (BO01) Group rebate (%)

Rebate Processing (BO02) Material rebate (fixed)

Rebate processing(BO03) Customer rebate(%)

Inter-company processing (P101) Intercompany discount (fixed)

Inter-company billing (P102) Intercompany discount (%)

Invoice lists (RL00) Factoring discount

Invoice lists (MW15) Factoring discount tax

How do you manage discounts in Condition record?

While creating a condition records, you can use any of standard discount types. While doing
automatic pricing, system checks for the discount that satisfies a certain condition and it
checks for a valid condition records.

If a discount refers to a group like a material group or price groups, that group must be
assigned to relevant customer or material master record before automatic pricing is done in
the system.
What is the use of product proposals in SAP SD module?

Product Proposal helps an organization to increase the sales by recommended other products
to the already added products or by replacing one already added. The products recommended
can be cheaper, expensive or similar to the product that is requested by the customer.

Automatic Product Proposal is one of most powerful tool used in online marketing of products.
Product Proposals can be mapped to specific requirement of business partners to match their
market requirement.
Can we extend material and customer to other sales area in SAP Sales and Distribution?What are
different sales order type that can be used in SAP SD system?How do you manage deliveries when
customer is not satisfied with product/service?What is an outline agreement?

Outline agreement is a long term purchasing agreement with vendor containing terms and
conditions regarding the material that is supplied by vendor.

Outline agreement are valid up to certain period of time and cover a certain predefined
quantity or value.
What are different type of outline agreements?

Outline agreement is of following two types.

 Contract
 Scheduling Agreement
Contract

Contract is a long term outline agreement between vendor and ordering party over predefined
material or services over certain framework of time. There are two types of contract

Scheduling Agreement

A scheduling agreement is defined as an external agreement with the customer and having
details of quantity of goods and delivery dates. This information is mentioned as schedule
lines In a standard system, Schedule lines can be created with the scheduling agreement or
you can also create these at later stage.
What are different contract types? How to create a contract in SAP system?

Quantity Contract − In this type of contract overall value is specified in terms of total
quantity of material to be supplied by vendor.

Value Contract − In this type of contract overall value is specified in terms of total amount
to be paid for that material to the vendor.

Contract can be created by following the below steps −

 Path to create Contract −

Logistics ⇒ Materials Management ⇒ Purchasing ⇒ Outline Agreement ⇒ Contract

⇒ Create

 T-code − ME31K
How you can create a scheduling agreement?
Path to create Scheduling Agreement −

 Logistics ⇒ Materials Management ⇒ Purchasing ⇒ Outline Agreement ⇒ Scheduling

Agreement ⇒ Create ⇒ Vendor Known

 T-code − ME31L
What are the different activities under consignment stock in SAP SD?

Consignment stock management includes four key activities in the system −

 Creating a Consignment Fill-Up (Stock is fill up at warehouse)

 Creating Consignment Issue (Stock issued from warehouse)

 Creating a Consignment Pick-Up (Stock return to manufacturer)

 Displaying Consignment Returns (Stock return from customer)

What is the use of shipping process in SAP Sales and Distribution? How do you define modes of
transport?

Shipping is defined as an important activity in sales process. It comes under logistic chain and
guarantees customer service and distribution of goods.

It is a component of Sales and Distribution module and is used to perform outbound delivery
and other shipping activities like picking and packing of the goods.

In shipping process, below are the key sub processes −

 Delivery processing of the goods

 Picking of items
 Packing of the goods
 Post goods issue
 Shipping communication
 Planning & monitoring of shipping
To define Modes of Transport, navigate −

 SPRO → IMG → Logistics Execution → Transportation → Basic Transportation

Function → Routes → Define Routes → Define modes of transport → Execute.

What is Next ?
Further you can go through your past assignments you have done with the
subject and make sure you are able to speak confidently on them. If you
are fresher then interviewer does not expect you will answer very complex
questions, rather you have to make your basics concepts very strong.
Second it really doesn't matter much if you could not answer few questions
but it matters that whatever you answered, you must have answered with
confidence. So just feel confident during your interview. We at
tutorialspoint wish you best luck to have a good interviewer and all the
very best for your future endeavor. Cheers :-)

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