Discounting Doesn’t Make Sense: Why “Just 10% Off” Is Rarely Harmless

Discounting often feels like an easy way to win work. A customer asks, pressure builds, and a small percentage comes off the price to get the deal done. The problem is that discounts don’t behave the way most people think they do. A 10% discount doesn’t reduce profit by 10%. In many cases, it wipes it out.

The reason comes down to contribution margin—the dollars left after variable costs like fuel and trip-specific labor. Those remaining dollars are what cover fixed costs and profit. When you discount, you’re not trimming the top line; you’re cutting directly into that smaller pool of money.

Here’s what that means in real terms. If your contribution margin is around 20%, a 10% discount requires you to sell twice as much work just to earn the same profit. At a 15% margin, you need three times the volume. At lower margins, the math gets even worse. What looks like a “small” discount can quietly demand two to six times more work just to stay even.

That’s a serious problem in a business with limited capacity. You can’t create more Saturdays, more buses, or more qualified drivers when demand spikes. Once a peak date is sold, it’s gone. Discounting high-demand inventory leaves no realistic way to make the numbers work later.

Discounting also creates long-term damage. Customers quickly learn that the first price isn’t the real price. Operations feel pressure to stretch resources to make low-margin trips work. Better, higher-value work gets crowded out. And price-driven customers tend to be the least loyal, often shopping again as soon as another quote appears.

The alternative isn’t being inflexible—it’s being intentional. Instead of cutting price, present clear options. Different equipment, timing, or service levels allow customers to choose what fits their needs without forcing you to give money away. Transparent fees and add-ons help align price with real costs. When demand or driver availability tightens, pricing should respond immediately, not after the damage is done.

Internally, this requires discipline. Measure success by contribution, not just close rate. A slightly lower close rate at full price often produces far more profit than a high close rate driven by discounts. When concessions are necessary, trade terms—schedule flexibility, payment timing, or equipment class—rather than raw dollars.

The bottom line is simple: a 10% discount is rarely harmless. In many cases, it’s an unforced error that demands far more work just to break even. Clear options, honest pricing, and better education consistently outperform discounting—and they build stronger, more sustainable businesses in the process.