Every wholesale price list is secretly a formula, even the ones built by feel. When someone says "trade gets 30% off" or "we work on cost plus 40%", they are describing a pricing rule — usually one applied inconsistently across hundreds of SKUs in a spreadsheet nobody dares touch. Making the formula explicit is the single biggest upgrade you can give your wholesale pricing, because it forces you to choose between the two fundamental approaches: building up from cost, or discounting down from RRP. They are not interchangeable, and picking the wrong one quietly erodes margin.
The two directions of a price formula
Cost-up starts from what you paid and adds margin: trade price equals cost multiplied by a markup factor. It guarantees you never sell below a floor you chose. RRP-down starts from the retail price and subtracts a discount: trade price equals RRP times (1 minus discount). It guarantees your trade customers a predictable saving against retail, which is how most of them think.
The tension: cost-up protects your margin but can produce trade prices that look arbitrary next to your RRP. RRP-down produces tidy, saleable discounts but says nothing about margin — if your cost creeps up or your RRP was set thin, a flat 30% off RRP can put individual SKUs underwater without anyone noticing.
Worked example: the same SKU, both directions
Take a product costing you £10.00 with an RRP of £24.99.
- Cost-up at cost × 1.5: trade price £15.00. Your margin is £5.00, which is 33.3% of the selling price. The customer's saving against RRP is £9.99, about 40% — generous, and it varies SKU by SKU depending on how RRP relates to cost.
- RRP-down at 30% off: trade price £17.49. Your margin is £7.49, about 42.8% of selling price. The customer sees a clean, predictable "trade is 30% off" story across your whole catalogue.
Now change one number: cost rises to £13.50 after a supplier increase, RRP unchanged. Cost-up at ×1.5 moves the trade price to £20.25 automatically — margin percentage preserved, though your discount-versus-RRP story shrinks to 19%. RRP-down at 30% still charges £17.49, and your margin has quietly fallen to £3.99, under 23% of selling price. Multiply that pattern across a 2,000-SKU catalogue and you can lose five figures a year to SKUs that drifted below their margin floor while the "30% off" banner stayed up.
When cost-up fits
- Volatile input costs. If suppliers reprice often (timber, metals, anything freight-sensitive), cost-up repricing keeps every SKU above your floor automatically.
- You are the brand. When you set the RRP yourself, RRP-down is circular — you would be discounting from a number you invented. Price the trade tier from cost, then set RRP above it.
- Mixed-margin catalogues. Where RRPs are inherited from many brands with wildly different margin structures, a flat RRP discount is fair to no one; cost-up gives each SKU a consistent economics.
When RRP-down fits
- Reseller-facing tiers. Retailers buying from you think in margin off RRP, because that is their profit. "Trade is 35% off RRP, wholesale is 45% off" is a pitch they can evaluate in one sentence.
- Brand-controlled RRPs. If the brands you distribute mandate RRPs, discount-off-RRP is the industry's native language and fighting it confuses buyers.
- Simple, stable catalogues. When costs are stable and your RRPs were set with healthy headroom, RRP-down is simpler to communicate and to audit.
Building the ladder: more than one tier
Most wholesale operations need a ladder, not a single trade price — for example Retail (RRP), Trade at 30% off for small accounts, and Wholesale at cost × 1.35 for pallet buyers. Note the mix: nothing stops you using RRP-down for one tier and cost-up for another, as long as you sanity-check that the tiers never cross (a wholesale price above trade price is an embarrassing spreadsheet classic). Add a margin-floor check to every tier — a rule that no formula result may fall below, say, cost × 1.15 — and you have converted pricing from folklore into a system. We covered why spreadsheets buckle under exactly this job in tiered pricing for Linnworks without spreadsheets.
Rounding: the final polish
Raw formula output produces prices like £17.4930 or £20.2515. Presentable price lists round to attractive endings — .99, .95 or .49 — which also stops customers reverse-engineering your exact formula from the pennies. Whether charm endings even belong on a B2B price list is a genuinely interesting question; we dug into the evidence in psychological price endings in B2B.
Automating it against Linnworks
This is exactly the job our upcoming app B2B Price Tiers is built for — and it is coming very soon. It is a wholesale pricing engine for Linnworks: unlimited named tiers (Trade, Wholesale, RRP or anything custom), a formula engine that works cost-up or RRP-down per tier, attractive rounding to .99/.95/.49, and a spreadsheet-style grid with inline editing and bulk maths when you want to hand-adjust. It syncs your catalogue from Linnworks and pushes tier prices back as native extended properties, supports CSV import and export, assigns customers to tiers, enforces per-tier minimum order values, and integrates deeply with Trade Order POS so the counter charges the right tier automatically. It will be £29.99 a month with a 14-day free trial when it goes live — you can see more at b2b-prices.mcp-g.com.
Stop maintaining your price ladder by hand — register your interest in B2B Price Tiers and be first in line when it launches very soon.