Learn how discounts impact quoting in Paperless Parts and how to set them up for your organization.
In this article
- Video overview
- What are discounts?
- When should discounts be used?
- How are discounts calculated?
- How are discounts different from pricing items?
- How do I turn on discounts in Paperless Parts?
- What does turning on discounts do in Paperless Parts?
- How do I configure my account with discounts?
- What if I turn off the discounts setting?
What are discounts?
Discounting is a commercial strategy to increase revenue by increasing the incentive to buy. In Paperless, discounts are deductions from the calculated price of a quote item
Note: Discounts in Paperless Parts are applied to each quantity in each line item, rather than the entire quote. See the section below on Bulk Updating to learn how you can quickly apply one discount to all line items in a quote.
Note: Discounts in Paperless Parts do not include “coupons”, which are deductions from the price applied at checkout. For example, there is no ability for a buyer to enter a code at checkout to get the order at a reduced price.
When should discounts be used?
Discounts can be a successful strategy for companies who incorporate a sales process into their quoting process. Discounts are a sales tool that can communicate to a buyer what your company is willing to do to work with them. Not all companies are a fit for using discounts, as sometimes it is better to increase margins and offer expedites depending on the market. Learn more about pricing strategies by checking out the Job Shop Show: The Pricing Podcast.
Reach out to your Customer Service Manager or our Support team if you are unsure if discounts is right for your company.
How are discounts calculated?
Discounts are a positive percentage applied to the unit price (costs + markups + expedites). Add-ons are applied after discounts.
Discounted unit price = rounded unit price * (1 - total discount % / 100)
With this calculation of discounts:
- Unit price * quantity will always equal the total price, both before and after discounts
- Total price will always be rounded to two decimal places
- Both the pre- and post-discounts unit price will be displayed on the quote to the buyer
How are discounts different from pricing items (markup and margin)?
Pricing items like markup and margin are calculated from the cost. Discounts are calculated from the price. In other words, discounts are calculated after the pricing items are applied to the cost.
How do I turn on discounts in Paperless Parts?
Go to the "Discounts" section in the settings page, toggle on "Allow discounts," and click "Save":
What does turning on discounts do in Paperless Parts?
Turning on discounts adds a new Discounts category to the Configure page, similar to Pricing items that exist in the platform today:
Users are able to create discount formulas they can add to process templates and to quote items. See the section below on “How do I configure my account with discounts?” to learn more and see discount formula examples.
A “Discounts” section is added to each line item:
To account for discounts in the calculations for Profit, Profit Margin, Final Unit Price, and Final Total Price, there is also an additional “Pricing Summary” section:
To add or replace discounts on multiple line items at once, users can select the line items, click “Actions”, and select “Update discounts”:
The user can choose to add discounts or replace discounts to the selected line items. If the user wants to remove all discounts from quote items, select “Replace all discounts” and do not add any discount items.
The discount percent can be overridden as it can be for individual line items:
When the total discounted amount is greater than the markups (so the profit is negative for the line item for a particular quantity), there will be a red warning icon:
If any individual discount item or the total discount amount is negative or greater than 100% (so the part would be offered at a negative price), the discount is invalid.
Users will not be able to finalize quotes that have quote items with invalid discounts until the discounts are fixed:
The discount percentage, discounted unit and total prices, and undiscounted unit and total prices are presented on the Digital Quote and PDF quote:
If your account has Advanced Analytics, you will be able to access discount data in analytics queries. Learn more about Advanced Analytics here.
How do I configure my account with discounts?
Discount formulas can be created using P3L just like operations, add-ons, and pricing items, which means they can be customized based on quantity, customer, and more. Like pricing items, discount formulas set an output percentage using PERCENTAGE = ____. Learn more about how to configure custom discounts formulas here.
Note: Discount percentages are always positive even though they will be used to reduce the price.
To create a new discount formula with a simple, constant percentage across quantity breaks, simply enter the percentage when creating the discount:
Discount formulas can be added to to each process template, just as operations, pricing items, and add-ons are added:
What if I turn off the discounts setting?
Turning off the discount setting will remove the discount features, including discount items on the configure page, the discounts table in the Build-a-quote page, the ability to bulk update discounts, and discount items being listed on new quotes generated in Paperless Parts.
For existing quotes that have discounts, regardless of whether the quote has been finalized or not, the discounts will not be automatically removed. Additionally, if a quote with discounts is copied or revised–the discounts will be copied as well. This allows the user to see which quotes were sent with discounts, even if the discount feature is no longer being used.
If you decide to turn on discounts again after turning it off, all of your previous discount configuration (discount items, discounts assigned to processes) will be restored.
Reach out to our Support team!