TIERED DISCOUNTS EXPLAINED

 

We are often asked about the tiered discounts noted on our quotations and invoices. Simply put tiered discounts are the reduction in the price of a product or service in the increments of 5%. A Tier 1 discount is 5% off, Tier 2 discount is 10% off, etc.


The basis for these discounts has several factors, including:

Purchase frequency and volumes.

 

Products have inherent business cost associated to them. These include the cost of the product and shipping. When a customer places multiple orders over a years’ time we can order most of the items and store them at our facility. This reduces shipping cost and allows us to pass on the savings to the customer.


Our venders are honest and hardworking. They also understand the long-term nature of business. When a customer places a larger order this provides us with flexibility to negotiate with our venders, reducing the pricing. We pass this savings to the customer. We understand that discounting a sale for the customer’s benefit is the ethical thing to do. We also understand that a reduced sale price on larger orders is the right thing to do for a long-term customer relationship.


There is also an expense in acquiring new customers. This can include sales and marketing materials, travel expenses, administrative as well as other cost. As customers place multiple orders over a period of time this cost is reduced until eliminated. We pass this saving on to the customer. We truly value long term relationships with our customers!

Product Pricing.

All products and services have a natural markup associated with their final cost. This varies by manufacturer and product line. Frankly stated the more flexibility that we have with our venders’ pricing allows us to extend a better discount for our customers. 

Promotions.

CenArk as well as our venders will occasionally have promotions on products and services. CenArk does not keep this price variance, preferring to pass the savings to the customer. 

Work Load.

CenArk is a local company, employing local residents. Occasionally economic shifts create free time for our technical staff. During these downturns we reduce the cost of our services to keep our staff productive and employed. The long-term relationship with our employees key to our success. 

Contact us for more information.