When quoting in a small business, there are usually some customers who get some type of special pricing. It can be because they place a lot of orders, or perhaps they run a non-profit business and we gladly give them a discount. There are usually 2 main ways of discounting our costs to the customer. One way is to offer a special rate. The other is to offer a percentage off discount. I’ve found the latter to be best in terms of not having to re-quote over time as things change.
For example, let’s say you are in the business of selling pool chemicals. A popular product you sell is chlorinating tablets, which you offer at 1.99/lb, and you charge $10.00 for delivery. For a certain customer, you work out a special rate of $1.59/lb and $8.00 for delivery. This could work just fine at first. However, if your overall costs goes up and you need to raise your prices, you would need to adjust those special rates accordingly in order to maintain the same profit. If instead, you gave the customer 20% off your current retail price, the special quote to that customer would always stay current and not need adjusting. For businesses with a lot of customers, this can be a big time saver.