Volume discount request, Harbour Kitchen Group to Ember and Oak Roasters
Discount request letter offering volume and faster payment
A discount request letter asks a supplier for a specific price and offers something back, such as more volume, a longer commitment or faster payment. This one page letter from a four cafe group asks its coffee roaster for 8 percent off in return for a 3,600 kg commitment and 14 day payment.
The document, page by page
Every page as it renders and as it prints, with nothing summarised. Read the wording before you reuse it.
Section by section
What each section is for, so you can keep the ones you need and drop the rest.
- Underline letterhead
- The cafe group's name, size, address and email.
- Addressee and subject
- The roaster's wholesale manager and the request.
- Relationship
- How long the roaster has supplied the group and why the request comes now.
- Spend table
- Last year's volume, price and total beside the committed volume at the asked price.
- The ask
- 8 percent off, the roaster's revenue still rising, and a tiered rebate alternative.
- What is offered in return
- 14 day payment and sole supply across four cafes.
- Reply date and signature
- A reply by 30 October, a meeting offer and the operations director's signature.
What to offer in return
A supplier gives a discount when the deal is better for it overall, so the useful question is what costs you little and helps them a lot. Committed volume lets a roaster plan green bean purchases and roasting shifts. A longer term reduces the cost of winning customers. Faster payment shortens the gap between paying farmers and being paid, which is often the hardest part of running a small supply business. Sole supply removes a competitor from your premises. Small business advisers commonly suggest negotiating on the whole relationship rather than the price alone, which is what this letter does.
Trades and what each is worth
As a rough guide: moving from 30 to 14 day payment on $127,512 a year frees about $5,000 of the supplier's working capital at any time; a 15 percent volume increase spreads the supplier's fixed costs further; a 12 month commitment removes the risk of losing you to a cheaper offer; sole supply guarantees the whole volume rather than a share. Put a figure on the trade you offer where you can, because a supplier that sees its own benefit in dollars is easier to persuade than one asked for goodwill.
How to adapt this document
Replace the table with your own purchase history from invoices, not memory, and set the committed volume at a level you are confident of reaching. Work out the new unit price and the supplier's total revenue at that price before choosing the percentage. Choose one or two trades you can genuinely deliver and delete the rest. If you are a single business rather than a group, replace the cafes line with your own scale, and if the supplier sells on a price list with published breaks, ask to move to the next break rather than for a percentage.
What makes this document work
The supplier's maths is done for it
The table puts 3,120 kg at $38.50 beside 3,600 kg at $35.42, and the ask paragraph points out the roaster still earns $7,392 more than last year. A wholesale manager can take that sentence to the owner unchanged.
One figure, with a fallback
The letter asks for exactly 8 percent and shows the new per kg price. A tiered rebate of 5 percent above 3,200 kg and 10 percent above 3,500 kg is offered in case a flat discount breaks the price list, so a no is not the only alternative.
Something real is offered back
Moving from 30 day to 14 day payment improves the roaster's cash flow, and sole supply across four cafes removes the risk of a competitor's blend creeping in. Both cost the cafe group little and are worth a lot to a small supplier.
Questions people ask
How do I ask a supplier for a discount?
Put it in writing with numbers: what you bought last year, what you will commit to next, the price you want and what you offer in return. Name one figure rather than asking what they can do. Ask by a date and offer to meet. A request that shows the supplier still wins is far more likely to succeed than one that only asks.
What is a reasonable discount to request?
It depends on the supplier's margin and the size of your commitment. For a growing, committed volume from a loyal customer, single figure percentages are common; double figures usually need a large jump in volume or a long contract. Check that the supplier's total revenue from you rises at the new price, as it does here, before deciding the figure.
What can I offer a supplier in return for a discount?
More volume, a committed volume over a fixed term, faster payment, sole supply, flexible delivery windows, larger and fewer orders, or a case study and referral. Faster payment is often undervalued by buyers and highly valued by small suppliers, because it reduces the money they have tied up waiting to be paid.
Should a discount be agreed in writing?
Yes. Once agreed, confirm the new price, the committed volume, the term, what happens if the volume is missed and any change to payment terms, in an email or a short side letter. Without that, a change of sales manager can quietly return you to list price and nobody will remember the commitment you made.
What if the supplier says no to the discount?
Ask what volume or terms would make a discount possible, because a no is often a no to the specific shape. If the answer is still no, decide whether to test the market with other suppliers. Do not threaten to leave unless you are prepared to, and keep the relationship courteous; a good supplier is hard to replace.
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