What Is Employee Pricing?

Mary McMahon

Employee pricing is a promotional price offered to employees of a company to encourage them to buy its products. Employees receive a fixed discount on sales prices and also have the option of taking additional discounts that may apply. Some companies may have employee pricing sales events where they offer the same price to all customers to stimulate sales. This is particularly common in the automotive industry.

Businessman giving a thumbs-up
Businessman giving a thumbs-up

For companies, the purpose of employee pricing is to make sure its products are affordable for employees and to encourage them to buy the company's products. Car companies often promote ownership of their products because they believe that seeing employees in cars made by other companies would create a bad image. Executives and other company officials often receive cars for free as part of their compensation, to avoid the embarrassment of members of the media catching them in cars made by a rival. Employees can qualify for promotional pricing to help them buy the company's cars.

The typical structure of employee pricing includes a flat discount on the sticker price and the ability to apply any discounts or promotions. Some companies also offer financing at promotional rates. Employees may get a lower interest rate or could have an interest-free loan for a set period of time. The company may also be willing to negotiate with employees who feel that employee pricing does not meet their needs, but do have an interest in buying company products.

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In an employee pricing event, retailers offer goods for sale to the public at the same price paid by employees. Usually this lasts for a limited time only. Such promotions may be framed in a way meant to reward customer loyalty. The company may claim that the low prices are a present for loyal customers, even though anyone can take advantage of them. Such events can stimulate sales by encouraging consumers to consider the company's products for new purchases or replacements.

Consumers with an interest in special pricing can look up the current promotions at various companies of interest to see what is available. It is important to compare prices across companies; employee pricing doesn't necessarily mean that consumers will get the best price. Product reviews can offer guidance on the best product for a consumer's needs, regardless of price. This information can be useful for making purchasing decisions. In some cases, consumers may be able to get comparable products at low prices through discounts and promotions.

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