What is contract pricing?

Contract pricing is a pre-agreed pricing arrangement between a supplier and a B2B customer, usually established through a contract for a specific period or purchasing agreement. The agreed prices may differ from the supplier’s standard or publicly listed prices.

Contract pricing can define:

• Fixed product prices: A specific price for selected products or SKUs.
• Volume-based prices: Different prices based on order quantities.
• Contract duration: The period during which the agreed prices apply.
• Customer-specific discounts: Special discounts negotiated for a particular business.
• Minimum order quantities (MOQs): Required quantities for certain products.
• Payment terms: Such as Net 30 or Net 60.
• Delivery or service conditions: Requirements associated with the agreement.

Example: A manufacturer agrees to supply a retailer with 5,000 units of a product at ₹400 per unit for one year, while the standard price is ₹450. The retailer receives the contracted ₹400 price for qualifying purchases during the contract period.

Contract pricing is useful for long-term supplier relationships, predictable purchasing costs, negotiated deals, and large-volume B2B transactions. In an eCommerce system, contract prices can be connected to customer accounts or catalogs so the agreed pricing is automatically applied during ordering.