# Quantity Discounts - How to Calculate?



## Pwear (Mar 7, 2008)

I'm having some trouble figuring out a quantity discount table for a product we sell. Regardless of the discounts I use, I wind up with problems, such as inconsistent gaps between price breaks (for example 98 units is $389 total, 99 units is $400 total, but 100 units is $300 total). I also have problems with high quantities having the same, or similar pricing as lower quantities (100 units at $400, 200 units at $475, but 300 units also at $300).

I need a way to 1) minimize the gap between price breaks, and 2) figure out a way to avoid higher quantities having the same, or similar pricing as lower quantities.

#1 is simple, I think I just need more price breaks, so the difference in price between them is lower. #2 has me stumped. It sounds simple, but I can't find price breaks that work.


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## BeforePrinting (Sep 17, 2010)

You're exactly right on #1... you'll need more price breaks to lessen that effect. In a perfect world, pricing could have infinite breaks and be a curve on a graph. 

I'm no math major, so unfortunately I don't know how to determine a formula from a curve. I have actually tired to solve that problem, but I think someone with better math skills would have to work out the formula.

As far as #2 goes... do you have an example you can share? I think in most cases that works itself out on it's own. 
example:
100shirts @ $5/ea. = $500 total
200shirts @ $2.50/ea. = $500 total
In this situation doubling the order obviously should not give the customer 50% off the price... if your pricing is coming out like this, maybe your quantity discounts are too steep?


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## BeforePrinting (Sep 17, 2010)

Pwear said:


> (100 units at $400, 200 units at $475, but 300 units also at $300).


oops, i missed the example you gave in your original post. Like I said, I think the price drop is too deep. Your labor costs for printing 200 shirts doesn't change much compared to 100shirts. Especially if you're running an auto. Those prices should be closer together.

In your example your pricing looks like this:
100 shirts: $4/shirt
200 shirts: $2.38/shirt (40% discount for another 100 shirts)
300 shirts: $1.00/shirt (58% discount for another 100 shirts)

w/o going through all the math here, maybe try giving an even 15-20% discount to see how things look.


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## hal (Aug 10, 2007)

This is a estimator I developed a couple of years ago. Since I'm not very good in Excel, it's kind of clunky, but it does work for us. We've streamlined it recently. It doesn't have current t-shirt prices and is based primarily, not on percentage mark-ups but more on the competitive market we are in.


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## Hiway (Apr 8, 2011)

My price breaks are at 300- 750- and 1200. 

To figure out per piece price is not something that needs to be aesthetically pleasing to a marketing price sheet, but instead reflective of what it costs to run your business.

Do you have a PHR? Do you know what a PHR is? A PHR is a production hour rating and is what it costs to per hour to run your business.

I tried many pricing structures over the years, but there is no denying the fact one must cover expenses, and then build in a profit based on their own specific situation. Unless there are 2 identical shops sitting next to each other outfitted exactly alike, what works for one will not work for another.


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