Most slab schemes fail at the edges: the jump to the next slab is either too weak to change ordering, or so rich it invites bill-pooling. Enter your slabs and payouts — this tool computes the marginal rate at every edge, flags the risky ones, and prices the scheme per 1,000 counters.
A "1.2% payout at ₹2.5L" headline hides the number that actually drives ordering: what does the counter earn on the extra purchase needed to get there? That is the marginal rate — (payout at slab N − payout at slab N−1) ÷ (threshold N − threshold N−1). In the pre-filled example, moving from slab 1 (₹1,200 on ₹1.5L) to slab 2 (₹3,000 on ₹2.5L) pays ₹1,800 on ₹1L of extra purchase — a 1.8% marginal rate. A counter compares that 1.8% against its cost of capital, godown space and the risk of unsold stock.
Across Indian trade schemes, marginal rates below ~2% rarely shift orders — the stretch isn't worth the working capital. Above ~6%, the edge becomes an arbitrage: crossing the threshold pays better than the counter's own trade margin on the incremental stock, so counters manufacture the crossing rather than sell their way to it.
Bill-pooling — three counters route purchases through one to cross slab 3, then split the payout; the brand pays top-slab rates for zero incremental sale. Quarter-end loading — distributors dump stock into billing at period close to clear slabs, and next period's sales crater. Threshold parking — counters that can't reach the next edge stop buying once a slab is secured. Mitigations: QR-verified secondary offtake instead of primary billing, per-counter purchase caps, monthly rather than quarterly slabs, and outlier detection on sudden purchase spikes.
Slab payouts are benefits to channel partners: once a counter's rewards cross ₹20,000 in a financial year, Section 194R requires 10% TDS. At the pre-filled slab 3 (₹6,000/month), a counter crosses the limit in 4 months. Collect PAN at enrolment, decide whether payouts are grossed-up or net of TDS, and say so in the scheme T&C — retrofitting tax treatment mid-scheme destroys trade trust.
The full playbook — structures, payout curves and the mistakes that kill schemes.
Turn slab costs into a defensible annual budget with contingencies and gates.
The interactive step-by-step checklist to take this scheme from design to scaled launch.