Retail and consumer goods
Gross-to-net
The gap between list price and the net price a company actually keeps.
Last reviewedWhat does Gross-to-net mean?
Gross-to-net is the difference between gross sales at list price and net sales after discounts, rebates, trade spend and returns. In consumer goods it is mostly trade spend. In pharmaceuticals, especially in the United States, it covers rebates to insurers and pharmacy benefit managers and required discounts to government programs, and the gap can be very large. Example: a product has a list price of 100; after 15 of trade discounts and 5 of rebates, the net price is 80, a gross-to-net of 20 percent. Reported revenue is usually the net figure.
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Related terms
- Trade spendThe money brands pay retailers and distributors to stock, display and discount their products.
- RevenueMoney earned from sales, before costs.
- Value-based pricingSetting the price from what the product is worth to the customer.
- Like-for-like sales (LFL)Sales growth from stores open in both periods, leaving out new and closed stores.
- Sales per square metreStore sales divided by selling space: how productive the space is.
- Shrink (shrinkage)Inventory lost to theft, damage, errors or spoilage.
- MarkdownA lasting price cut to clear stock that is not selling.
- Sell-through rateThe share of stock received that has been sold within a period.