Volume Rebates and Freelancing

Hi,

Just curious if any freelancers out there have offered volume rebates to clients for eLearning development. I'm new to freelancing and a client has asked if I have a rebate structure, so as an incentive to keep sending me business, I give a percentage of the total job back to them.

I have no idea what an reasonable % is. I guess it depends on how much work you think the client would send you over the course of a year? So say you think they might send you 3 projects over a year amounting to $40K combined total, a 5% rebate is reasonable?

Appreciate any advice.

4 Replies
Christy Tucker

I offered a discount once for a client who contracted with me for developing 5 courses. I did a 5% or 10% discount. Unfortunately, she canceled the contract after the first course. It really was just a way for her to negotiate a lower rate, with no intention of doing more work.

Most clients are honest of course, but even honest clients have changes in circumstance that mean future planned courses don't ever happen.

I probably wouldn't do discounts like that again. However, if I did, I would probably do the first course at full price, then offer increasing discounts on future courses. I would aim for a 5% discount total, although I might push it to 10% if I had enough buffer in the original estimate. For example, if it was 3 courses total, I might charge full price for the first one, 3% off for the second one, and 6% off for the third one. If they really do give you more business, then they will get the volume discount. If they bail after the first one (like my past client), then I'm not out anything.

Stephen Lee

Christy, thanks for the great response. I've always enjoyed reading your posts on your website, so really value your insight and experience.

This is a client that I've done a few jobs for in the past and I don't really have any concerns about contracts being cancelled. They are also a client I enjoy working with. I'm thinking of going with a rebate of 5 or 6%. Hopefully I'm inline with what other companies are offering.

Thanks

Christy Tucker

For a client with a proven history, I would be more inclined to trust them too. It's a red flag for me when it's the beginning of a relationship. In those cases, I'd rather do a small project first to make sure we're a good fit and earn their trust than go right to price negotiations.

I've asked about volume discounts in other forums (mostly after my last experience to see if it was atypical). I didn't hear from too many other people who are offering it. Several people said they never do discounts; they would negotiate the scope of the project down if budget is a concern. A few people said they might do discounts. 5% seems about right if you're going to do it. There is value in having a reliable client who you don't have to train and where you know the processes.

Bob S

Having been on both sides of this interaction, I can tell you that "volume discounts" may not be the terminology you wish to use.

You, and hopefully the client, are looking for a long-term mutually beneficial business relationship. As your relationship deepens you come to "know" your client better... their branding, their culture, their particular needs, their approval criteria, etc.  The ability to provide even more appropriate solutions to their business problems, in less time, with less re-scoping and hassle is the result.

It is that result that may be worth quantifying with a lower rate for certain future projects.  And that is how I would explain it - That as a valued partner you want to pass along the savings, monetary and otherwise,  that come from having a long term relationship.

Otherwise you are competing on price alone.... and that is not a place you want to be in.