Tips and Tricks

How to calculate the discount and what price is the right one

Making individual customized quotes is always a challenge. On the one hand, it is a very tempting approach, because you can model the offer exactly to win a deal. On the other hand, it is a very risky approach and very difficult to scale with fixed costs. They may create errors in calculation of margin, take time to redesign and are difficult to maintain once created.

The client wants a discount, I have to redo the offer

Not only a corporate image. Freelancers, small and medium-sized businesses are used to this regularly. They often anticipate that the first offer is not the last, because the client asks for a discount and changes. However, it needs to be addressed case by case as they do not know what he will ask for exactly, what he finds expensive and whether they need to reduce the margin across the board or they have to delete some items. Sometimes they have done these client conversions several times, back and forth, sometimes without well documented changes. And the risk of error in calculation increases

Discount is not right, know your costs first

At the time of creating the offer, the costs are fixed. They usually change 1-2 times a month, but it really depends on your business segment. If a client pushes you to a discount and it is not a long-term client or an extremely profitable project, do you really have a reason to give him a discount? Is this business really that worth it? Won’t your margin be negative? The most responsible entrepreneurs live in tables that are regularly updated manually or automatically and employ people who adjust and update their offers for their clients. But is it setup profitable in the long run? 74% of companies state that they have no idea what the real costs associated with creating quotations are. At the same time they admit that they can be significant.

Be prepared, reduce your error rate and leave nothing to chance

Price offer automation helps you handle major errors in the process. At the same time, it can automate the application of discounts – so that you and your business stay profitable. However the automation logic can be endless. The conditions you define on the input will affect how the discount is calculated, whether it is volume, number of items, type of items or a specific combination of them. It will not allow you to go beyond the limits that you define yourself – e.g. not below your margin. At the same time, the customer can configure the combinations to choose what suits him best. No need to rework bids manually or spend any manpower to do this manually.

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