Why the invoice price misleads you
A multi-brand electronics dealer earns a large share of their margin off-invoice. QPS and QDS rebates, price protection, consumer-offer reimbursement and free goods arrive after the sale — as credit notes and goods, scattered across brand statements over the weeks and months that follow.
So the invoice always shows a higher number than you actually land the unit at. Judge a deal on the invoice price and you will systematically understate your own margin — and sometimes, as above, mistake a profit for a loss. The invoice price is not your cost; it is your cost before the brand pays you back.
The catch: the invoice only lies if you collect
There is a sharp edge to this. The invoice price understates your cost only if every scheme you are owed actually arrives. Miss a credit note, claim a volume slab store-by-store, forget to file price protection — and your landing cost rises by exactly that amount. On this unit, let that scheme money go uncollected and your landing cost climbs back to the invoice price — and the sale really is the loss the invoice warned you about.
Your true landing cost is only as good as the schemes you actually collect. The gap between the scheme money you are owed and the scheme money that lands is scheme leakage — and it is the difference between the margin you think you made and the margin you banked.
Estimate your own leakage — free 60-second auditHow to calculate your true landing cost
The formula, honestly:
list / face value − all scheme credits − price protection − free-goods value + freight + non-creditable tax = net landing cost
Then your real margin is selling price minus net landing cost — never selling price minus invoice price. Do this per model, and the brands that actually make you money stop hiding behind the ones that only look like they do.
See your own numbers
The worked example above is one unit. Across every brand you carry, over a quarter, the same gap compounds — and most of it is invisible until each scheme is reconciled, promised versus received.
Frequently asked questions
What is a dealer's true (net) landing cost?
True (net) landing cost is what a unit actually costs a dealer after every brand scheme, discount and rebate is subtracted from the list price, and every genuinely non-recoverable cost (freight, non-creditable tax) is added back. It is almost never the invoice price, because most scheme money arrives later as credit notes and goods, not as a discount on the invoice.
Why isn't the invoice price my real cost?
Because a large part of a multi-brand dealer's margin is paid after the sale — QPS and QDS rebates, price protection, consumer-offer reimbursement, free goods — as credit notes and goods, not as a lower invoice. The invoice shows a higher number than you actually land the unit at. Judging a deal, or your margin, on the invoice price systematically understates your profit — unless a scheme goes unclaimed, in which case the invoice was closer to the truth and you really did lose money.
How do I calculate my real margin after schemes?
Start from the list/face value, subtract every scheme you are owed (in-bill discount, QPS/QDS, price protection, consumer-offer reimbursement, free-goods value), then add back only the costs you cannot recover (freight, non-creditable tax). That is your net landing cost. Your real margin is selling price minus net landing cost — not selling price minus invoice price.
What happens to my margin if I don't claim a scheme?
Your landing cost rises by exactly the unclaimed amount, and your margin falls by the same. Because dealer margins are thin, one or two missed credit notes can turn a profitable line into a loss. That gap between the schemes you are owed and the schemes you actually receive is scheme leakage — the money the invoice price warned you about.
Related: Net Landing Cost (definition) · GST on scheme credit notes · Scheme Leakage Audit