Work out vendor rebate instantly with clear inputs, formula shown and shareable results.
Tiered vendor rebates pay a base rate on all purchases and an enhanced rate on volume above a threshold. Because only the excess earns the higher rate, the effective rate rises gradually — and the marginal rate just above the threshold is what makes a final-quarter push worthwhile.
Rebate
Rebate = min(Purchases, Threshold) x Base rate + max(0, Purchases - Threshold) x Enhanced rate
Effective rate
Effective % = Total rebate / Annual purchases x 100
As a reduction in the cost of inventory purchased, recognised as the goods are sold — not as other income when the rebate is received.
Yes. A retrospective tier applies the higher rate to all purchases once the threshold is crossed, which creates a large step benefit and a strong incentive to hit it.