Purchasing & suppliers
Quantity Break (Volume Discount)
By the Supply Chain Manager team · Updated October 16, 2026
A quantity break is a lower unit price a supplier offers when you buy at or above a set quantity, such as $4.00 each for 500+ units versus $4.40 below.
Price breaks reward bigger orders, but bigger orders mean more stock. The right comparison is the saving on the purchase against the extra carrying cost of holding the additional units until they sell.
Price breaks can also be combined across SKUs from the same supplier, for example on total order value. In that case, adding a few fast-moving items to an order can earn the break without overstocking any single line, which is usually better than buying extra of one slow item.
How to calculate quantity break
Saving = (Price below break − Price at break) × Quantity at break Extra carrying cost ≈ Extra average stock × Unit cost × Annual carrying rate × (Holding time in years)
Quantity break example
Illustrative numbers: you need 300 units a month. Ordering 500 instead of 300 earns $0.40 off each, a $200 saving. The extra 200 units take about two-thirds of a month to sell; at a 25% annual carrying rate on $4.00 that costs roughly $11. The break is worth taking.
Why quantity break matters for distributors
Breaks are worth taking on steady sellers and often not on slow ones, where the extra stock may sit for months or never sell.
Common quantity break mistakes
- Chasing breaks on slow movers and creating overstock.
- Ignoring storage space or shelf-life limits.
Examples on this page use made-up round numbers to show the calculation. They are not benchmarks or results from real businesses.