PRICING GUIDE FOR DISTRIBUTORS
Price book for wholesale: what it holds, who keeps it
A wholesale price book is the organized set of prices a distributor uses to quote and invoice: a price for every product by unit of measure, customer class and quantity, with effective dates and the rules that decide which price wins. A price list is one slice of it.
Every distributor has a price book, even if it lives in a spreadsheet, in the heads of two senior salespeople and in a drawer of supplier price sheets. The problems begin when it is not written down: two counters quote the same customer different prices, an old supplier increase never reaches the list, and nobody can say why a customer pays what they pay. This guide explains what a price book holds, how it differs from a price list, how to decide which price applies, who should keep it and how to keep it current.
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Price book, price list, price matrix: the words
The terms overlap, and different software and different trades use them loosely. These definitions are the ones used on this page.
| Term | What it is | Example |
|---|---|---|
| Price list | One set of prices, usually for one customer class or one date | The Tier B list effective November 1 |
| Price book | The whole organized system: every price level, break, contract price and date, with the rules for choosing between them | All lists, matrices, contract prices and promotions, plus the precedence rules |
| Price matrix | A grid that sets a price or a discount by product class and customer class | Product class 2 × customer tier B = 15% off list |
| Contract price | A price agreed for one named customer and one item or group | Customer Y pays $82.00 for item 4417 until the end of the year |
| Supplier price file | The manufacturer’s own list or cost sheet, which sets your cost | A PDF or spreadsheet of costs sent by the supplier, with an effective date |
A price list is what you hand to a customer or a counter. A price book is what produces it. If you only maintain lists, every change means editing many lists by hand; if you maintain a book, you change a rule or a cost once and the lists follow.
What a price book holds
| Layer | What it holds | Example |
|---|---|---|
| Cost | Landed cost per item and the date it took effect | $60.00 effective Oct 1 |
| List price | Your base selling price per unit of measure | $80.00 each |
| Customer tiers | A discount off list, or a markup on cost, per customer class | Tier B: 8% off list |
| Quantity breaks | Lower unit prices as the order grows | 10 or more: 3% off |
| Customer prices | Prices agreed for one customer, with start and end dates | Customer Y: $82.00 until Dec 31 |
| Promotions | Temporary prices with start and end dates | Spring sale: 5% off for two weeks |
| Rules | Rounding, margin floors, minimums and which price wins | Never below 12% margin; most specific price wins |
Two features separate a price book from a list: every price has an effective date, and there is a written rule for conflicts. Without them you cannot answer “what did we charge last March?” or “which price is right?”.
Which price wins? A worked example
One item can have several prices that apply at once. Suppose an item lists at $100.00. A customer on tier B, which is 15% off list, orders 12 units, and orders of 10 or more get a further 4% off the tier price. A second customer has a contract price of $82.00 for this item.
| Price source | Unit price | Who it applies to |
|---|---|---|
| List price | $100.00 | Everyone |
| Tier B price, 15% off list | $85.00 | Tier B customers |
| Tier B price with the 10-or-more break, 4% off | $81.60 | Tier B orders of 10 or more |
| Contract price | $82.00 | One named customer |
Sample figures. Tier B: $100.00 × 0.85 = $85.00. With the break: $85.00 × 0.96 = $81.60.
Now take the tier B customer who also has the $82.00 contract price and orders 12 units. If your rule is “the most specific price wins”, the contract price applies and the customer pays $82.00. If your rule is “the lowest price wins”, the customer pays $81.60. Neither rule is wrong, but they give different answers, which is why the rule has to be written in the price book and applied the same way by everyone. The gap is 40 cents a unit, $4.80 on these 12 units; across a year of orders it is not small.
Who keeps the price book
A price book needs one accountable owner. In a small distributor it is the owner or the purchasing manager. In a larger one it is a pricing manager or a pricing team. The owner does not have to type every change, but they decide the rules and approve the changes.
- Decides the structure: tiers, quantity breaks, product classes and the precedence rule.
- Approves list-price changes and the cost updates that drive them.
- Approves customer-specific prices and sets their end dates.
- Controls who may override a price at the counter, and records why.
- Publishes a new version with an effective date and archives the old one.
Salespeople propose exceptions; they should not each carry a private version of the book. When prices live in individual spreadsheets, the book is not one book but as many as there are people.
Keeping it current when supplier costs move
The commonest way a price book goes wrong is quiet: a supplier raises a cost, the list does not follow, and margin shrinks with every sale. Take an item that costs $60.00 and lists at $80.00, a 25% margin. The supplier raises the cost to $63.00, a 5% increase. If the list stays at $80.00, the margin becomes ($80.00 − $63.00) ÷ $80.00 = 21.25%. No one decided to give up almost four points of margin; the book simply was not updated.
A repeatable update routine prevents that:
- Receive the supplier’s new price file and note its effective date.
- Load the new costs with that date, keeping the old costs for history.
- Compare new cost to old cost for every item and look at the biggest changes first.
- Decide which list prices to move, and by how much, using your pricing rules.
- Check the margin at the lowest price each rule can produce, against your floor.
- Approve the changes and publish the new version with its own effective date.
- Tell the team which version is current, and retire the old copies.
Choosing a structure
- A flat file holds one price per item per tier. It is easy to read and print, but a change to one rule means editing many cells.
- A rules-based book stores a list price and the rules (tier discounts, breaks, markups) and calculates the prices. A change to a rule updates every price, but you need to check the results.
- Customer-specific prices sit on top of either one. Keep them in a separate table with start and end dates so they can expire.
Most distributors end up with a mix: rules for the bulk of the catalogue and a table of exceptions. The free wholesale price list template on this site shows a small rules-based book in Excel: one list price and cost per item, tier prices and quantity breaks from a settings sheet, and a margin check.
Common price book problems
- More than one version in circulation, with no way to tell which is current.
- Prices with no effective date, so history cannot be reconstructed.
- Costs updated but list prices not, or the reverse.
- Customer-specific prices that never expire.
- No written precedence rule, so the same order is priced differently by different people.
- No margin check at the lowest price, so discounts stack past the floor unnoticed.
- Unit-of-measure confusion between each, box and case.
- Overrides at the counter with no record of who approved them.
Checklist: is your price book in order?
- One named owner, one current version, and a date on it.
- Landed cost on every item, with the date it took effect.
- List prices and the tier and quantity-break rules written down.
- A written rule for which price wins, and for margin floors.
- Customer-specific prices with end dates.
- A routine for supplier cost changes, with someone responsible for it.
- A way to see what you charged a customer in the past.
Where a quoting tool fits
A price book earns its keep at the moment of quoting, when each line of a customer’s request has to be matched to an item and priced by the rules. That is where mistakes and delays occur: a rule remembered wrongly, an old list used, a contract price missed.
Qotora AI applies your own price rules, including customer tiers, margins and discounts, to the lines it finds in your own catalogue. Every price traces back to your own data. When a line is unclear, it asks a precise question instead of substituting, and a person on your team reviews and approves the quote before anything leaves. It does not replace the price book: your price book still decides what the prices are.
Frequently asked questions
What is a price book?
A price book is the organized set of prices a business uses to quote and invoice: each product’s price by unit, customer class and quantity, with effective dates and the rules that decide which price applies.
What is the difference between a price book and a price list?
A price list is one set of prices, such as the list for a customer tier. A price book is the whole system that produces those lists: every price level, quantity break, contract price and promotion, with the rules for choosing between them.
What is a price matrix?
A price matrix is a grid that sets a price or a discount by combining two things, usually a product class and a customer class. For example, product class 2 for tier B customers might be 15% off list.
Who is responsible for the price book?
One accountable person: the owner or purchasing manager in a small distributor, a pricing manager in a larger one. They set the rules and approve changes, even if others enter the data.
How often should I update the price book?
Whenever costs or your pricing decisions change enough to matter. For volatile goods that can be weekly. Whatever the cadence, give each version an effective date and keep the old ones.
Should I keep my price book in Excel?
A spreadsheet works while one person owns it and the catalogue is small. It becomes risky when copies spread or when the lists are long. A rules-based book, in a spreadsheet or in your business software, reduces the number of places a change must be made.
What happens when two prices apply to one order?
You need a written rule. Common rules are “the most specific price wins” (a contract price beats a tier price) or “the lowest price wins”. They can give different results, so decide which you want and apply it consistently.