For a supplier making a gross margin of 35 percent, a discount in price of 7.5 percent will require an extra percent volume for cash profit to remain the same. (Figure 1). Figure 1 Measuring customer profitability requires key account managers to consider what happens to their company when agreeing to a price cut for large orders by volume. 10 Present % Gross Margin 20 25 30 35 15 40 50 2% || 25 15 un | 11 9 7 6 colloll % Price Cut 14 3% 43 25 18 14 11 9 8 6 4% 67 36 25 19 15 13 11 9 5% 100 50 33 25 20 17 11 7.54300 || 100 | 60 33 27 23 18 10% 200 100 67 50 40 33 25 15% 300 || 150 | 100 || 60 43 33 |20% 400 || 300 || 133 | 100 || 66