How to calculate a trade discount
Reduce list price and test the margin.
1
Enter list price
Use the published price before any discount.
2
Apply the discount
Enter the agreed wholesale percentage.
3
Check unit cost
Confirm the net price still covers cost and target margin.
What does this tool do?
A trade discount is a reduction from list price given to wholesalers or resellers. The net price drives the invoice total, while comparing it with unit cost shows whether the discount still leaves an acceptable margin.
The Formula
Net price = List price × (1 − Discount %); Margin = (Net price − Unit cost) ÷ Net priceFrequently Asked Questions
What is a typical trade discount?
It varies by industry, commonly 20% to 40% off list for wholesale. The right level depends on volume, reseller margin expectations and your own cost base.
Should discounts be stacked?
Avoid stacking unless intended, because discounts compound. A 20% trade discount plus a 10% promotion gives an 18% reduction from list, not 30%.