Discounts on quotes: how to give one without losing your margin

"Can you do anything on the price?" The question usually comes just as the client is about to sign. A discount can unlock the signature; giving one every time, without doing the maths, can wipe out your margin. A well-handled discount is visible, justified and under control. Here is how to choose it, size it and show it on the quote and then the invoice.

Types of discount

Different reductions serve different purposes:

• trade or volume discount: a reduction for a large order or a regular client;
• loyalty discount: for repeat customers, sometimes applied to the next job;
• early payment discount: for paying before the due date;
• goodwill reduction: to make up for a delay or a problem on the job.

What matters most is saying clearly what the discount is for.

Do not quietly lower unit prices

The temptation is to shave every line until the total looks right. That is a mistake:

• the client does not see the gesture you are making;
• your reference prices slip: the next quote starts from a base that is too low;
• you lose track of how much you actually give away over a year.

A line reading "Discount: −150" shows the gesture, protects your prices and is easy to track.

Percentage or fixed amount

• Fixed amount (−150): the client sees exactly what they save. Often clearer for private clients.
• Percentage (−5%): easier to apply across several lines or a whole section.

You can also discount a single line, for example an appliance you got at a good price, rather than the whole quote.

Ask for something in return

A discount given for nothing teaches the client that asking is enough. Tie it to a commitment instead:

Check your margin

Before agreeing, do a quick sum: what is your margin on this job once materials, labour and overheads are covered? A 5% discount on a job with a 10% net margin removes half your profit. The pieces of that calculation are in our article on materials markup and our guide to setting an hourly rate.

On the invoice

The invoice repeats the discount as it appeared on the signed quote: line prices, discount, net amount, then tax where relevant. If you agree a reduction after the invoice has gone out, for example for a delay, do not edit the invoice: issue a credit note, as described in our article on invoice disputes.

When to say no

Some requests are best declined politely:

• the job is already priced tightly and any discount means working at a loss;
• the client asks for a discount and a shorter deadline at the same time;
• the request comes after signature, with nothing offered in return.

A simple "my prices are calculated to cover the materials and the time the job needs" is usually enough. Clients who choose you on quality rarely leave over a refused discount.

Summary