What discount to give customers?

Quite often, the following situation occurs with sales managers and business owners.

The seller comes and says: "I have an excellent client, I am ready to buy a consignment of goods, but asks for a discount." The head, of course, understands that if he gives a discount, he will lose part of the margin. The manager has a logical question: “And how much more goods is the customer ready to buy if we give him a discount?”.
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Under the cut - a simple formula that should be at hand in the sales and marketing department.

The formula is given in the book “Pricing” by Igor Lipsits:

Increase in sales of goods = (Discount / marginal income - discount) * 100%

Below is a table with a margin of up to 25% and a discount of up to 10%.



How to work with the table? Suppose your margin is 4%, you want to give a customer a 1% discount - this means that you have to sell 33% more goods (in monetary terms), which will be equivalent to selling goods without a discount.

If your margin is 25%, and you sell a batch of 100 goods, then you can make a beautiful tariff scale: take 125 goods and get a 5% discount; If you take 167 products, you will receive a 10% discount. In this case, you do not lose anything, and the client gets motivation in the form of a discount. Of course, everything depends on the specific case, but the table will greatly help you in determining the boundaries of the discount.