Special pricing agreement

Definition

A manufacturer-approved discount on one named project, quoted below the house's normal cost.

Why It Matters

It is how a distributor wins work it could not win at book price, and it is also where a seller's margin can be made to look better than it is. The house sells at the agreed price and recovers the difference from the manufacturer afterwards, so the gross margin on the invoice is not the margin on the job. Read a sample of open agreements against the invoices they cover, and check whether the project each one names actually happened, because an expired agreement quoted on a live quote is a loss waiting to be booked.