Choosing net rates vs retail rates sounds like a pricing decision, but it’s really a behaviour decision.
Pick the wrong one, and you’ll spend your life answering questions like “why is the price different?” and “can you just adjust this booking?” while your partner quietly sells something else that feels simpler.
Pick the right one, and trade bookings become boring in the best way.
First, the plain English difference
Net rates
Your partner buys the product at a trade price (net). They then set their own selling price and keep the difference.
Think: “I’m building a package and I don’t want the customer to see line-by-line prices.”
Retail rates (with commission)
Your partner sells at your public price (retail). They earn an agreed-upon commission (either automatically tracked or paid later, depending on how you run it).
Think: “I want to sell this quickly and transparently, without doing my own pricing.”
When net rates make the most sense
Net rates usually work best when the partner is packaging or reselling as part of a bigger offer.
Good fit examples
- A travel agent building a full holiday package (hotel, flights, transfers, activities)
- A group organiser putting together a multi-stop itinerary
- A partner who wants to bundle your experience without showing individual prices
Why it works
- They can price the full package their way. They control the final number the customer sees.
- It avoids price awkwardness. The customer isn’t comparing your retail price against a bundled package.
- It suits partners who already do pricing. They have a process, templates, and a reason to care about margins.
Watch-outs (so you don’t create chaos)
- Brand risk. They can overprice, underprice, discount aggressively, or make your product look “cheap” without meaning to.
- Customer service grey areas. If the end customer thinks they paid you, but actually paid the agent, refunds and complaints can get messy.
- Reporting can feel fuzzier. It’s not always obvious what the customer paid, which can matter for finance and performance reviews.
A simple rule: net rates work when the partner behaves like a retailer. If they want to run their own shop, net rates fit.
When retail rates (with commission) make the most sense
Retail rates usually win when the partner is helping a customer quickly buy a specific item at a known price.
Good fit examples
- A hotel concierge selling tickets to guests at the desk
- A small local agency booking individual services rather than packages
- A partner who does not want to design documents, set prices, or think too hard
Why it works
- The price is familiar and easy to explain. “It’s £32 per adult” is a nice sentence.
- It protects your pricing consistency. No surprises across different partners.
- It reduces partner effort. They do not need to calculate margins or build a package.
- It’s easier for your team to support. One price model, fewer arguments.
Watch-outs
- Some partners will push for discounts anyway. Humans love a deal, especially when they’re reselling.
- Commission admin can get annoying if it’s not tracked cleanly and paid on a predictable schedule.
- It can be less attractive for package sellers who do not want the customer to see individual retail prices.
A simple rule: retail rates work when the partner behaves like a service desk. They want to help the customer buy, not build a product.
The behaviour shift you actually care about
Here’s the bit people miss.
Net rates tend to create “entrepreneur partners”
- They care about margin.
- They may upsell, bundle, and package creatively.
- They will compare your net against other suppliers’ nets and switch quickly if your trade price no longer makes sense.
Retail rates tend to create “assist partners”
- They care about ease.
- They want fewer steps, fewer decisions, fewer follow-up emails.
- They will sell what is reliable and quick, even if the commission is slightly lower.
Neither is better. They’re just different types of partners.
A quick decision checklist
Choose net rates if most of these are true:
- They sell packages, not single items
- They want to hide line-by-line pricing
- They have their own pricing process and sales material
- They care about margin more than speed
- You trust them to represent your product fairly
Choose retail rates with commission if most of these are true:
- They sell individual services on request
- The customer expects to see a normal ticket price
- They want the simplest possible workflow
- You want consistent pricing across partners
- You want fewer finance and support edge cases
A practical middle ground (because real life is messy)
You can absolutely run both models, as long as you keep it tidy:
- Use retail rates for concierge-style partners and smaller agents who want speed.
- Use net rates for package sellers who need pricing flexibility.
- Set clear rules on who gets which, based on partner type and trust level.
If you do nothing else, do this: don’t force package sellers into retail, and don’t force concierge-style partners into net. That’s how you end up with long emails that start polite and end with “as per my last message”.
The right pricing model should make your partners easier to work with, and your team less involved in the day-to-day.
Contact us now to explore how our backoffice helps you set up, customise, and report.