Worked example: 10% off the quote removes 40% of profit
A 20,000 quote with 15,000 cost earns 5,000 gross profit. A 10% discount cuts the quote by 2,000. With the same cost, profit falls to 3,000 and gross margin falls from 25% to 16.7%. That 2,000 concession removes 40% of the original profit.
Find a price floor with a named assumption
To retain a 20% margin at a 15,000 cost, the price must be at least 18,750. The largest discount from 20,000 is therefore 6.25%, displayed to one decimal place. Use the full-precision calculation behind the result when setting a final rounded quote, then check that quote again. If the original price already misses the target, a zero discount does not fix it.
Trade scope, timing or risk as well as price
This calculator holds delivery cost fixed. Removing work may lower cost; rushing may increase it. Explore the discount worked example, use the scope-change calculator for a change in effort, and follow the budget negotiation guide to make the trade explicit.
Frequently asked questions
Can a discount remove more than 100% of profit?
Yes. If the price reduction exceeds the original positive profit, the job moves into a loss and the percentage of original profit removed exceeds 100%.
Why is the profit-reduction percentage sometimes not defined?
The percentage compares the reduction with an original positive profit. When the original quote has zero or negative profit, that comparison is not useful; the calculator still shows the profit amounts and margin.