Courier service Maximum Affordable Discount
Maximum discount = (1 − cost / ((1 − margin) × current price)) × 100
Gather completed route logs, fuel receipts and delivery records. Include mileage, dispatch time, and handling. The starting figures are examples. Replace them with your own records.
Formula and worked example
Maximum discount = (1 − cost / ((1 − margin) × current price)) × 100
| Input | Example |
|---|---|
| Current price | 1,000 |
| All assigned cost | 650 |
| Minimum retained margin | 20 % |
| Calculated result | 18.75 % |
Choose reliable inputs
Compare route time, vehicle cost, delivery density and collection timing. For this courier service calculation, use completed route logs, fuel receipts and delivery records and a consistent definition of one delivery.
- Mileage: include the portion belonging to this delivery or reporting period, and record where the value came from.
- Dispatch time: include the portion belonging to this delivery or reporting period, and record where the value came from.
- Handling: include the portion belonging to this delivery or reporting period, and record where the value came from.
Use the same currency for every money input. Do not mix weekly costs with monthly revenue, or count the same expense in both an itemised cost and allocated overhead.
Can a profitable job still fail my margin target?
Positive profit and the desired percentage margin are different tests. The margin denominator is revenue.
A negative answer means the current price already fails the target margin.
What if this input changes?
If current price rises by 10%, this example changes by 7.3864 %. This shows the effect of one change; it does not predict what will happen.
Open the calculator, save your baseline, then change the input supported by the least reliable estimate in your records. Compare both scenarios before committing to a price or capacity promise.