Give a customer a 40% trade discount and no minimum order value, and you have created a strange product: retail service at wholesale prices. The £23 trade order costs you the same to pick, pack, invoice and chase as the £800 one, but the discount was priced for the £800 behaviour. Minimum order values (MOVs) are how you keep the bargain honest — trade prices in exchange for trade volumes — yet most sellers either set none, or set one arbitrary number for everyone and enforce it apologetically. Here is how to do it properly.
Why small trade orders lose money
Every order carries a fixed fulfilment overhead regardless of size: order admin, picking, packing materials, a delivery cost that is barely related to basket value, invoicing, and for account customers a share of credit control. Cost that overhead honestly — for most B2B sellers it lands somewhere between £6 and £15 per order once labour is counted. Now run the maths on a small order. A £30 trade order at 30% gross margin yields £9 of margin; if your per-order overhead is £10, you paid a pound for the privilege of serving it. The discount you granted assumed the customer would amortise that overhead across a decent basket. Small orders break the assumption while keeping the discount.
Why one MOV is not enough: per-tier thresholds
The deeper your discount, the thinner your percentage margin, and the bigger the basket needed to clear the same overhead. That is the case for MOVs that scale with the tier ladder rather than one flat number:
- Retail/RRP: no minimum — full-margin orders can be any size.
- Trade (say 30% off): £75 minimum.
- Wholesale (say 45% off): £250 minimum.
- Distributor (say 55% off): £1,000 minimum.
The message to customers is coherent and easy to defend: deeper pricing is earned by bigger commitments. It also gives account managers a clean upgrade conversation — "you are regularly clearing £300 an order, let's move you to the wholesale tier" — instead of ad-hoc discount creep.
Choosing the actual numbers
- Find your break-even basket per tier. Divide your per-order overhead by the tier's gross margin percentage. At £10 overhead and 30% margin, orders below £33 lose money outright. That is your floor, not your MOV.
- Set the MOV at a multiple of break-even. Two to three times break-even means small-end orders still contribute meaningfully. In the example, £75–£100 is a sensible trade MOV.
- Check it against real orders. Pull a year of orders per tier from Linnworks and look at the distribution. If 40% of trade orders fall below your proposed MOV, phase it in or soften it (see below) — an abrupt cliff will cost you accounts. If only 8% fall below, switch it on without ceremony.
- Round to a memorable number. £75, not £73.50. MOVs are communicated verbally at counters and on phones; they need to be repeatable.
Hard floor or soft floor?
You have three enforcement styles, and they suit different relationships:
- Hard MOV: orders below the threshold are refused at that tier. Cleanest economics, harshest customer experience. Fits distributor tiers where the relationship is formal.
- Small-order surcharge: orders below the MOV accepted with a fee (say £7.50) that recovers the overhead. Customers dislike visible fees, but it converts the policy from "no" to "yes, at cost".
- Tier fallback: below the MOV, the order is priced at the next tier up (a sub-£75 order from a trade customer is priced at retail). Economically elegant — the discount is literally conditional on the volume — though it needs software support to apply cleanly.
Enforcement is a point-of-sale problem
An MOV that lives in a PDF price list is a suggestion. Real enforcement happens where the order is built — and the person building it is often a counter assistant facing a regular customer, which is exactly when policies get waived. The fix is to put the threshold into the order screen itself: the POS knows the customer's tier, knows the cart total, and prompts before the order is created — "this order is £41 below the trade minimum" — with the agreed remedy attached: add more lines, apply the surcharge, or reprice. The policy stops depending on whoever is on the counter that day, and awkwardness with the customer drops because "the system flags it" is easier to say than "I won't". This is also why MOV data belongs in the same system as your pricing and your point of sale, not in three separate documents; rekeying policies between systems fails the same way rekeying orders does.
Doing this in Linnworks
Our upcoming wholesale pricing engine B2B Price Tiers — coming very soon — treats MOVs as a first-class part of the tier, not an afterthought. You define unlimited named tiers with formula-driven pricing, assign customers to tiers, and set a per-tier minimum order value alongside the prices themselves. Tier prices push back to Linnworks as native extended properties, and the deep integration with Trade Order POS means the counter sees the customer's tier and its minimum at the moment the cart is built — the exact enforcement point that makes an MOV real. It will be £29.99 a month with a 14-day free trial at launch; details at b2b-prices.mcp-g.com.
Set your thresholds once and have them enforced at every counter sale — register your interest in B2B Price Tiers ahead of its launch very soon.