What is Soft and Hard Limit?

Introduction

Soft and Hard Limits are used to safeguard Partner users from setting prices lower than costs and to avoid excessive discounting.

In this article:

• Hard and Soft Limits configuration
• Limits Calculation

Hard and Soft Limits configuration

The Soft Limit defines the limitation for the Account Manager role while the Hard Limit defines the one for the Seller admin.

Limits Calculation

For example, a user with the Seller admin role has set:

1. Price Source: Retail Price (this is by default setup).
2. Markup: 0%
3. Soft Limit: 20%
4. Hard Limit: 10%
5. Cost Price: 3.37 EUR
6. Retail Price: 4.20 EUR

When applying calculations: 

• Soft Limit defines the minimum allowed price to be set by Account Managers:
  • x = 3.37 EUR + 20% = 4.04 EUR
  • As such, the Account Manager can give a maximum discount of 3.8% from Retail Price for this offer:
    • (4.20-4.04)/4.20 *100% = 3.8%
• Hard Limit defines the minimum allowed price to be set by Seller Admins:
  • x = 3.37+10% = 3.71 EUR
  • Thus, the Seller Admin can give a maximum discount of 11.7% from Retail Price for this offer:
    • (4.20-3.71)/4.20 *100% = 11.7%

1) If Price Source = InPrice: 
    Soft Limit ≥ Hard Limit ≥ Markup 
    & Markup ≥ 0

2) If Price Source = Retail Price: 
    Soft Limit ≥ Hard Limit
    Markup ≥ [(InPrice - Retail Price)/Retail Price] x 100%

Scenario: Allowing a discount below Cost Price (negative limits)

Soft and Hard Limits are calculated as a markup on top of the Cost Price (shown as "% over Vendor Price" in the offer configuration). With a limit of 0%, the minimum allowed price equals the Cost Price, so users cannot sell below cost. To allow a deeper discount, including selling below Cost Price, set the limits to negative values.

Example. The Seller wants to set a -21% price adjustment for an offer, but the system shows the error "Markup could not be less than -20".

1. Price Source: Retail Price
2. Markup: 0%
3. Soft Limit: 0%
4. Hard Limit: 0%
5. Cost Price: 24.48 SEK
6. Retail Price: 30.60 SEK

Why the adjustment is blocked:

• Minimum allowed price = 24.48 SEK + 0% = 24.48 SEK
• Minimum adjustment from Retail Price = (24.48 − 30.60) / 30.60 × 100% = -20%
• The requested -21% gives 30.60 × 0.79 = 24.17 SEK, which is below the minimum price, so it is rejected.

How to allow a bigger discount: set the limits to negative values, for example:

• Hard Limit: -5% (Seller admin)
  • Minimum price = 24.48 − 5% = 23.26 SEK
  • Maximum discount from Retail Price = (30.60 − 23.26) / 30.60 × 100% = 24%
• Soft Limit: 0% (Account Manager)
  • Minimum price = 24.48 SEK
  • Maximum discount from Retail Price = 20% 

With these settings the Seller admin can set the requested -21% (24.17 SEK), while the Account Manager remains limited to -20%. The Soft Limit must still be greater than or equal to the Hard Limit.

Formula:

• Minimum price = Cost Price × (1 + Limit %)
• Minimum adjustment from Retail Price = (Minimum price − Retail Price) / Retail Price × 100%
• Limit needed for a target price = Target price / Cost Price − 1 (e.g. 24.17 / 24.48 − 1 ≈ -1.3%)

Summary

Soft and Hard Limits are pricing safeguards that prevent Partner users from setting prices below costs and avoid excessive discounting. The Soft Limit applies to Account Manager roles while the Hard Limit applies to Seller admin roles, with both limits configurable in the Platform settings. These limits are not simple percentage discounts but are calculated based on the Cost Price plus the specified limit percentage to determine the minimum allowable Customer Price. Both limits define Markup on top of the Cost Price and remain independent of the selected Price Source when configuring pricing. Note that price configuration based on Suggested Retail Price can incur losses if Cost Price exceeds the discounted Suggested Retail Price, and specific mathematical conditions must be met depending on whether Cost Price or Suggested Retail Price is selected as the Price Source.