Approve discounts without margin erosion

Before you agree to any discount - stop and check what's actually allowed. Pull up your current discount policy and get clear on your floor price (the absolute lowest you can go) and your maximum discount percentage. Here's what to look for: - What's the standard discount range for this customer segment? - Are there seasonal or promotional exceptions right now? - Who needs to sign off if the request goes beyond your authority? - Does this customer's payment history justify a better rate? A quick tip from experience - write down the specific numbers before you get on that call or reply to that email. It's way too easy to get talked into something in the moment that you'll regret later. If the request falls outside your authority, don't say "let me see what I can do" - say "I'll need approval for that, and here's the timeline." Customers respect honesty more than vague promises. Also double-check whether any existing contracts or agreements already lock in pricing for this customer. You don't want to offer something that contradicts what's already been signed.

Now it's time to build out the actual volume pricing structure. You're setting up the price breaks that reward bigger orders while keeping your margins healthy. Don't wing this - get the math right or you'll feel it later. Start with these basics: - What's your cost per unit at different production/fulfillment volumes? - Where are the natural breakpoints where your costs drop enough to pass savings along? - What volume commitment does the customer actually need to hit to unlock each tier? - Is there a minimum order quantity before any discount kicks in? A common structure that works well: - Tier 1 (base): 1-99 units at list price - Tier 2: 100-499 units at 5-10% off - Tier 3: 500-999 units at 10-15% off - Tier 4: 1000+ units at 15-20% off Adjust those ranges for your product, but the principle stays the same - each jump should feel meaningful to the buyer without eating your profit. One thing people often miss: make sure you define whether the discount applies to all units or only the units above each threshold. That distinction can mean thousands of dollars on a large order, and if you haven't spelled it out, the customer will assume whichever version benefits them more. Document everything in a format that's easy to share with the customer and easy for your team to reference. If it lives in someone's head instead of on paper, it's going to cause problems when that person's on vacation.