How to work out an average percent?

[AccordingE]

Hello,

I have no idea about math, am not very good at it. At work I need to keep my average discounts offered to new clients below 10% - how do I work this out?

Currently have 42 new clients - I have given 1 a 10% discount, 1 a 5% discount and 1 a 20% discount.

The rest are all 0%.

Do I divide 42 by 35%? 3.43% is this correct?

Thanks in advance

 

[tkhunny]

No good. Your percent discount is a percentage of what?

-----------------------------------------------------------------------------------

Three Customer Example:

$100 - 10% discount = $100 - $10 = $90
$1,000 - 5% discount = $1,000 - $50 = $950
$10,000 - 0% discount = $10,000 - $0 = $10,000

You are suggesting that the average discount is (10% + 5% + 0%) / 3 = 15%/3 = 5%

You had $10,000 + $1,000 + $100 = $11,100 in sales. 5% of $11,100 is $555, but you discounted only $10 + $50 = $60, so you have MASSIVELY miscalculated the average discount.

----------------------------------------------------------------------------------------

You can't just average separate calculations like that. You need TOTALS.

(Total of all Discounts)/(Total of All Sales) = Average Discount. Notice how this is NOT calculated from the individual discount percentages.

Thus, and finally, you CANNOT calculate an average discount with the information you have provided. You must find the totals, not just the percentages.

Currently have 42 new clients (What was the total of all these 42 sales?)
I have given 1 a 10% discount, (How much was the discount for this client? $$ not %)
1 a 5% discount and 1 a 20% discount. (Sane for these two. $$ not %)

"I have no idea about math, am not very good at it. "

You should upgrade. Based on the expectation of your employer, you are running out of excuses.

 

[AccordingE]

No good. Your percent discount is a percentage of what?

-----------------------------------------------------------------------------------

Three Customer Example:

$100 - 10% discount = $100 - $10 = $90
$1,000 - 5% discount = $1,000 - $50 = $950
$10,000 - 0% discount = $10,000 - $0 = $10,000

You are suggesting that the average discount is (10% + 5% + 0%) / 3 = 15%/3 = 5%

You had $10,000 + $1,000 + $100 = $11,100 in sales. 5% of $11,100 is $555, but you discounted only $10 + $50 = $60, so you have MASSIVELY miscalculated the average discount.

----------------------------------------------------------------------------------------

You can't just average separate calculations like that. You need TOTALS.

(Total of all Discounts)/(Total of All Sales) = Average Discount. Notice how this is NOT calculated from the individual discount percentages.

Thus, and finally, you CANNOT calculate an average discount with the information you have provided. You must find the totals, not just the percentages.

Currently have 42 new clients (What was the total of all these 42 sales?)
I have given 1 a 10% discount, (How much was the discount for this client? $$ not %)
1 a 5% discount and 1 a 20% discount. (Sane for these two. $$ not %)

"I have no idea about math, am not very good at it. "

You should upgrade. Based on the expectation of your employer, you are running out of excuses.

My KPI is to keep the average discount given to clients below 10% - it doesn't matter to my bosses what the total dollar value is - they have asked me to keep the average discount below 10% for new clients - this is 10% of our retail pricing.

I am not great at math, my job does not revolve around math - this is why I'm asking for help here.

The 42 clients have a total of $100,043.82 worth of orders. The 10% discount was $11,693 after the discount, the 5% discount was $9,774.18 after the discount and the 20% discount was $20,196.00 after the discount.

So if I understand you correctly =

Discount 1 = $1,169.30
Discount 2 = $488.71
Discount 3 = $4,039.20
= $5,697.21

 

[tkhunny]

Several things:

1) So, $5,697.21 / $100,043.82 = 5.7% -- That's not very close to your previous 3.43%. If the error would have been 8.43% vs. 10.7%, how would you or your bosses feel about that?

2) You are not calculating the discounted amount correctly. If it is $11,693.00 AFTER the 10% discount, the 10% discount was NOT $1,169.30. What was the price BEFORE the discount? $11,693.00 + $1,169.30 = $12,862.30, but 10% of $12,862.30 is $1,286.23, not $1,169.30. Thus, if you dropped the price from $12,862.30 to $11,693.00, you have managed a discount of only $1,169.30 / $12,862.30 = 9.1%. If you promised a 10% discount, your client may not have gotten the deal to which they agreed. You should fix that.

3) "I am not great at math, my job does not revolve around math - this is why I'm asking for help here. " That's just not good enough. It is clear that there is more need for mathematics in your job than you are aware - perhaps more than your employer is aware or even your clients are aware! I rephrase what I said before: You should upgrade. You are out of excuses. You may be cheating your clients. If you can't do it yourself, because of whatever limitation you state, you should hire a consultant to make you some workable spreadsheets or something else that is correct and legally supportable.

 

[AccordingE]

Several things:

1) So, $5,697.21 / $100,043.82 = 5.7% -- That's not very close to your previous 3.43%. If the error would have been 8.43% vs. 10.7%, how would you or your bosses feel about that?

2) You are not calculating the discounted amount correctly. If it is $11,693.00 AFTER the 10% discount, the 10% discount was NOT $1,169.30. What was the price BEFORE the discount? $11,693.00 + $1,169.30 = $12,862.30, but 10% of $12,862.30 is $1,286.23, not $1,169.30. Thus, if you dropped the price from $12,862.30 to $11,693.00, you have managed a discount of only $1,169.30 / $12,862.30 = 9.1%. If you promised a 10% discount, your client may not have gotten the deal to which they agreed. You should fix that.

3) "I am not great at math, my job does not revolve around math - this is why I'm asking for help here. " That's just not good enough. It is clear that there is more need for mathematics in your job than you are aware - perhaps more than your employer is aware or even your clients are aware! I rephrase what I said before: You should upgrade. You are out of excuses. You may be cheating your clients.

Well thanks for the condescension and rude attitude, I hope your day gets better than it currently is if you have nothing better to do than belittle people asking for help on the internet.

Regardless of your attitude, thank you for the help you have provided.

 

[tkhunny]

Well thanks for the condescension and rude attitude, I hope your day gets better than it currently is if you have nothing better to do than belittle people asking for help on the internet.

Regardless of your attitude, thank you for the help you have provided.

You were not belittled at all. There was neither rudeness nor condescension. I gave you a warning about possible misrepresentation in your business practices. You should hear it from me before you hear it from your client's lawyers. Seriously, get some help. Your present practices are not working and one day, one of your clients will figure it out. Protect yourself by making it right BEFORE they ask you about it in a deposition. Lawsuits are no fun at all. "I am not good at math" is a very poor defense in a lawsuit.

 

[AccordingE]

You were not belittled at all. There was neither rudeness nor condescension. I gave you a warning about possible illegal business practices. You should hear it from me before you hear it from your client's lawyers. Seriously, get some help. Your present practices are not working and one day, one of your clients will figure it out. Protect yourself by making it right before they ask you about it. Lawsuits are no fun at all.

Thank you for your concern, but it really is not as bad as it appears.

Our accounting package automatically calculates discount given, all I need to do is put 5%, 10%, 20% etc in the column and it's done.

I really do not have to do any other form of math other than tracking my own KPI's.

Thank you again for your help.

 

[tkhunny]

Well, just to clear the air, I had a chat with my daughter, the Social Worker / Lawyer. She suggested I try again on that first part.

I am sorry you found belittling, rudeness, or condescension in my communication. I can see how the directness of my words could be so construed. If you could see into my head, you would see compassion, concern, and alarm, but none of the intent that your heard and reported. Apologies, then. See why we need Social Workers? And thank you for coming back and making me consult my helpful resources so that I can learn to deal better with humans.

Come back whenever you need help. Try to include, as you did on this one, some idea of what it is you are trying to do and how you are trying to solve it. You have done well.

P.S. I am a little suspicious of your software package. Perhaps a discussion for another day.

 

[Dr.Peterson]

Hello,

I have no idea about math, am not very good at it. At work I need to keep my average discounts offered to new clients below 10% - how do I work this out?

Currently have 42 new clients - I have given 1 a 10% discount, 1 a 5% discount and 1 a 20% discount.

The rest are all 0%.

Do I divide 42 by 35%? 3.43% is this correct?

Thanks in advance

My KPI is to keep the average discount given to clients below 10% - it doesn't matter to my bosses what the total dollar value is - they have asked me to keep the average discount below 10% for new clients - this is 10% of our retail pricing.

I am not great at math, my job does not revolve around math - this is why I'm asking for help here.

The 42 clients have a total of $100,043.82 worth of orders. The 10% discount was $11,693 after the discount, the 5% discount was $9,774.18 after the discount and the 20% discount was $20,196.00 after the discount.

So if I understand you correctly =

Discount 1 = $1,169.30
Discount 2 = $488.71
Discount 3 = $4,039.20
= $5,697.21

Let's finish this up -- though I'd expect you to have before-discount numbers available to work from, which would make it easier.

And if you are being judged on the average discount, I would expect that someone in the company has software to calculate that (or else you don't really need to worry about it).

The total amounts before discount would be, respectively:

10%: $11,693.00/1.10 = 10,630; discount = 0.10*10,630 = 1063.00
5%: $9,774.18/1.05 = 10,262.89; discount = 0.05*10,262.89 = 513.14
20%: $20,196.00/1.20 = 16,830; discount = 0.20*16,830 = 3366
Total for these three: 37722.89
Total discount: 4942.14
Total for all clients: 100,043.82 + 4942.14 = 104,985.96
Average discount: 4942.14 / 104985.96 = 0.047 = 4.7%

At least that's what I get on one try; you'll have to check for errors.