In this guide 6 sections
Contract pricing gives a customer a dated rate list that overrides the catalogue price. The list holds the item, the agreed price, quantity breaks and an expiry date. Freight sits inside the unit price or on its own invoice line, and a weekly drift report catches lists that wander apart.
What a rate list actually holds
A rate list is a dated table of item codes and agreed prices. It belongs to one customer, such as a hotel group, or to a band of customers who share the same terms and the same account manager. For those buyers it wins.
Take a cleaning chemicals distributor. A school chain agrees prices on floor degreaser in 5 litre drums, hand soap refills and microfibre cloths, while everything else still sells at the public price. The agreement runs for a year. So the list needs a valid from date and a valid to date.
When a rep opens a quote or a buyer signs in to the store, the system looks for a list tied to that account first. It falls back to the catalogue only when no line matches.
- Item code, pack size and unit of measure
- Agreed price per pack
- Valid from and valid to dates
- The customer or customer group it belongs to
- Who approved it and when
Quantity breaks need one clear counting rule
A break lowers the unit price once an order reaches a set quantity. Say whether that quantity counts per line, per order or across a month, because buyers and sales staff often read the rule in different ways. Write it down.
Kitchenware shows the trouble. Ten cases of tumblers on one line may earn a better rate than ten cases spread across three glass sizes, though both weigh the same on the truck. Decide which counts. Then print it on the quote.
Fix the unit as well. A break written in cartons falls apart the moment a customer orders loose ladles, tongs or gastronorm pans by the piece. Convert everything to one base unit. Show the pack size beside it.
Freight inside the price or beside it
Heavy goods make freight a pricing decision. A 20 litre jerrycan of descaler, or a pallet of nitrile gloves, abrasive discs and cable ties, costs far more to move than the same value of cloths. Two methods are common.
A delivered price folds freight into the unit rate for a delivery zone. An ex warehouse price shows it as a line of its own. Delivered pricing reads simply. Yet it hides a loss the moment a customer starts ordering small drops for distant sites, since the zone rate was set for full pallets.
- Delivered rate by zone or postcode band
- Ex warehouse rate plus a freight line
- Free freight above an agreed order value
- Part pallet and full pallet handling
- Fuel surcharge clause and who may change it
- Customer collection allowance
How rate lists drift apart
Drift starts small. A supplier raises the cost of a sanitiser, the catalogue is updated that afternoon, and the school chain list stays as it was because nobody told its owner. A rep promises a rate by email. It never reaches the system.
Soon one item carries three prices. Nobody notices until a customer waves an old invoice at the counter and asks why the rate went up. Margin leaks all the while.
Catch it with a weekly drift report. Compare each contract price against the landed cost and the catalogue price, then flag any line priced below cost plus freight and any list that expires within thirty days.
- Contract price below landed cost
- Contract price above the catalogue price
- Lists with no valid to date
- Items replaced by a new code but still priced on the old one
Name a list owner and fix a dated review
A list without an owner ages badly. Name one person per account who approves changes and a different person who enters them, so that no single set of hands can alter a price unseen.
Review each list before it expires, not after. Lay the old list beside the last six invoices to that customer and check that every price on the page matched what was billed on the day. A mismatch shows where the process leaks.
Start this week with your three largest accounts. Print each rate list. Set it beside the latest invoice and mark every line that does not agree.
Rate list review sheet
A worksheet holding one row for each item on a customer’s rate list. Columns hold item code, pack size, contract price, catalogue price, last landed cost, break quantity and break price. Further columns hold the freight rule, valid to date and approver. A strip at the foot logs exceptions, each with a reason and a sign off.
Open a blank worksheet to printQuestions owners ask
What is the difference between a rate list and a price list?
A price list is public and applies to everyone. A rate list belongs to a named customer or group, carries its own dates and overrides the price list for the items it covers.
Should quantity breaks apply per order or per year?
Either works if it is written down. Per order is simpler to quote and check. A yearly commitment suits large accounts, but it needs a running tally of what has been bought so far.
How often should contract prices be reviewed?
Before each list expires, and whenever a main supplier changes cost. Chemicals and packaging inputs move often. A look at the drift report each quarter is sensible, with a reminder set sixty days before every expiry date so renewal talks start early.
Can a customer see only their own prices online?
Yes. A store can show each signed in buyer the rate list tied to their account, while visitors see the catalogue price or a request for quote button.