It’s let’s make a deal time for end of quarter sales.

Well, it’s that time of the quarter again, when sales reps start calling and trying to make deals so that they can close business and meet their quotas or secure their bonuses. Most are willing to give an extra 5–10% off on any deals that can get closed by the end of of the quarter. I certainly understand the perspective of the sales reps, and I would never want to be in that position. However, as a way of doing business, this has always seemed like a bad idea for several reasons:

1. You open yourself up to being played by dealers. Let’s say that I have an order for $100K that comes in today. Rather than just place the order, I’d be smart to hold it until later in the month and then tell the sales reps for various makers involved in the project that “I might be able to close this deal, but they only have X dollars in the budget. If you can get me another 20% off, I’ll do what I can to try to close it.” Of course, if they come back with 20, 15, or 10 more off, it doesn’t really matter. I’d place the order with the maximum discount I can get, and then pocket the difference for myself.
2. If an extra 10% would close a deal, then why not do that back in January? Or next month? Are we losing deals in other months because we don’t have the opportunity to get better pricing?
3. Looking long term, think of how many hundreds of thousands of dollars in profit are given up by Sales reps in order to close a deal by a certain deadline. That money could have been used to provide each dealer…