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Price Waterfall Builder: From List Price to Pocket Price
List price is rarely what you keep. Between the price list and your bank account sit invoice discounts, rebates, freight, payment terms and a long tail of smaller concessions. A price waterfall puts each one on the page so you can see where price leaks and which leaks you control.
Enter a list price and the leakage steps that apply, each as a percentage of list or a dollar amount per unit. Add or remove steps to match your business. You get the pocket price, the leakage at each step, a waterfall chart and a CSV you can take into a spreadsheet. The example values are illustrative; replace them with your own.
Price and volume
Leakage steps (between list and pocket price)
Percentages are measured against the list price, so steps add up without compounding.
Your results
Pocket price
$81.00
81.0% of the $100.00 list price. Total leakage $19.00 per unit (19.0%).
Annual leakage at this volume
$950,000
Waterfall
Free template · Excel workbook
Price Waterfall and Price Increase Model
From list to pocket price, plus a price-increase model with segment breakeven volume loss and realization tracking.
Illustrative example values are prefilled; replace them with your own. Everything is calculated in your browser, and Performis does not store what you enter. Our analytics record which calculator was used and a few summary figures, such as a rounded result.
The formulas
- Step amount (percentage step)
- List price × step %
- Step amount (dollar step)
- Dollars per unit as entered
- Price after a step
- Price before the step − step amount
- Pocket price
- List price − Σ step amounts
- Leakage % of list
- (List price − pocket price) ÷ list price × 100
- Annual leakage
- Σ step amounts × annual units
How to interpret your result
Rank the steps by size
The largest step is not always the one to attack first. Start with the ones that have no commercial return, such as discounts given without a volume commitment.
Look for steps nobody owns
Freight absorbed, payment-term discounts and goodwill credits often sit outside the pricing process. Steps with no owner tend to grow quietly.
Compare across customers or segments
Run the same waterfall for several customers. Wide differences in pocket price for similar volumes point to inconsistent discounting rather than real differences in value.
Treat it as an average
One waterfall describes one average unit. Real leakage varies by customer, product and order, so use the result to choose where to dig into transaction data.
Check that every concession is included
A waterfall that leaves out year-end rebates or returns will overstate pocket price. Reconcile the total to what finance reports as net revenue.
Frequently asked questions
What is a price waterfall?
A price waterfall starts at list price and subtracts each discount, rebate, allowance and cost that sits between list and what you actually keep. The last bar is the pocket price. It shows where price leaks, step by step.
What is the difference between invoice price and pocket price?
Invoice price is what appears on the invoice after on-invoice discounts. Pocket price also removes off-invoice items such as rebates, freight you absorb, early-payment discounts and other concessions. Pocket price is the better guide to profitability.
Should leakage steps be percentages or dollars per unit?
Either. Discounts and rebates are usually percentages; freight and similar costs are usually dollars per unit. This tool takes each step in whichever form you have. Percentages are applied to the list price, so steps add up without compounding.
What steps should I include?
Include every concession that reduces what you keep per unit: invoice discounts, volume and growth rebates, promotional funding, freight, payment-term discounts, returns allowances and warranty. Add your own steps with the add button.
How do I get the annual dollar figure?
Enter annual units sold. Per-unit leakage for each step is multiplied by that volume. Leave units at zero if you only need the per-unit view. The figure assumes the same average price for every unit.
Is my data stored or sent anywhere?
No. All calculations run in your browser and nothing you enter is collected or saved. The CSV is generated on your device.
Take it further with a template
Free template · Excel workbook
Price Waterfall and Price Increase Model
From list to pocket price, plus a price-increase model with segment breakeven volume loss and realization tracking.
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