why partners ask for more discount, and what to give them instead

A partner that asks for more discount is usually telling you that something else is broken. Its margin does not pay for the presales, POC and service work your product needs, or another quote is undercutting it: from a competing partner, or from your own direct team. Sometimes deal registration did not protect it, or the rebate meant to pay for the effort arrives months after the deal. Find out which one it is before you touch the price list, because a bigger discount for everyone fixes one of these at most and often makes the others worse.

what the request usually means

Five causes sit behind most discount requests. They look the same in an email and need different answers.

• The margin does not pay for the effort. A security product that needs presales days, a POC, an implementation and a hand-held first renewal costs the partner engineer time on every deal. If the licence margin is its only income from the deal, every extra day comes out of that margin. The partner’s side of this is in the guide on services partners can attach. Here the symptom is a discount request on deals that ran long.
• A competing partner quoted lower. Two resellers chase the same customer. One cuts its price, and the other asks you to fund the match.
• Your own team quoted lower. Your direct seller, your website or your bid desk offered the same customer a better price. Channelnomics, in a 2024 piece on channel conflict, names partners competing with the vendor’s direct sales force as the classic form of conflict, alongside partners competing with each other for the same sale. In a Channelnomics survey cited in the same piece, with no sample size given, 25% of vendors and 16% of partners saw distribution as a source of conflict too.
• Registration did not protect. The partner registered, then waited for approval, found a second approval on the same deal, or watched a special price go to someone else.
• The back-end money arrives too late. The partner did the work this quarter, and the rebate or marketing fund that was meant to pay for it lands two or three quarters later, if the partner remembers to claim it.

Only the first cause is about the size of the margin. The other four are about prices and processes you control.

how to tell which one it is

Ask for the deal behind the request. “We need five more points across the range” tells you little. A request tied to a named customer and a date can be checked against your own records.

Question	If the answer is yes, the cause is likely	Where to check
Is there another quote on this deal, and whose is it?	A competing partner, or your own team	The partner, your CRM, the bid desk log
Was the deal registered, and how long did approval take?	Registration that did not protect	Registration records, special price approvals
How many presales and POC days has the partner spent?	Margin that does not pay for the effort	The partner’s estimate, your engineer’s notes
When did the partner last receive back-end money, and for which period?	Rebates that arrive too late	Incentive and finance records
How long did your quote or special price take?	A slow process that makes the partner price defensively	Timestamps in your quoting tool

Two patterns are worth separating. A request that comes from one partner on every deal is usually about its cost of doing business with you. Requests that come from several partners on the same customers, or in the last weeks of your quarter, usually point to a price someone else is quoting. Check your own team first, because it is the one you can fix today.

why more discount often lands in the wrong place

Run the request through the channel price waterfall, with the same illustrative numbers as that guide. A subscription lists at 1,000. You sell to the distributor at 650, the distributor sells to the reseller at 700, and a competing reseller quotes the customer 850. The first reseller matches at 850 and keeps 150.

Now give every reseller five more points to answer the request. Resellers buy at 650, and to leave the distributor its 50 you charge it 600. The competing reseller has the same five points, so it quotes 800. The first reseller matches at 800 and keeps 150 again. The customer pays 50 less, you receive 50 less, and the partner that asked is where it started.

Five more points for every reseller, on one deal

1. list price1,000Unchanged.
2. you receive60050 less than before.
3. reseller buys650Every reseller, including the competitor.
4. competitor quotes800It passes the five points to the customer.
5. reseller keeps150The same as before the extra discount.

Leveling discounts has a second cost. If the extra points also go to partners that only process orders, you pay fulfilment the same as the partner that found and built the deal, and the gap that made registration worth anything shrinks.

Some vendors fund a bigger discount by raising the list price so their own net stays flat. Illustrative numbers again: list goes from 1,000 to 1,100 and the reseller discount from 30% to 36%, so the reseller buys at 704, close to where it was. A reseller that quotes 10% off list now asks 990 instead of 900. The customer that pushes gets the deeper discount. The customer that does not, and every renewal priced from list, pays more. The end price goes up for the quiet buyers, and the list price stops meaning anything.

To see where each extra point ends up with your own prices, run both versions in the channel price waterfall calculator.

what to offer instead

Match the answer to the cause. Most of the useful answers cost less than a permanent point of discount, because they go only to the deals and partners that need them.

The cause behind the request, and the answer that fits

the gap is about price protection →

a competing partner undercutsRegistration that holds through the special pricing process.

your own team undercutsChannel-neutral pay and a direct price partners can live with.

the work outgrows the marginPay for POCs and engineer days, and attach priced services.

your money and quotes are slowMore front-end for this deal, back-end paid on a schedule, faster quotes.

the cause sits inside your company →

Registration protection that holds. A decision deadline you meet, one approval per customer and project, and a bid desk that does not give an unregistered partner a special price on a registered deal. The deal registration guide covers the rules and the test for whether yours is real.

A direct team that does not compete on price. If your seller earns more when a deal closes direct, partners will keep asking for discount to defend themselves. The credit and pay rules are in the guide on paying the channel team. Your own direct and online prices should sit at or above what a partner can sustain.

Paid support for the effort. Fund the POC instead of the price: engineer days, demo licences, a fixed contribution for a defined test. The partner-run POC guide shows how to set one up. Large vendors already separate this money from discount. AWS describes partner funding to help build pipeline and “explore proof of concepts”, and marketing development funds paid as cash or AWS promotional credits. Add priced service packages the partner can attach, so the effort becomes revenue.

Quote speed. A partner that waits days for a quote or a special price pads its number or asks for room to move. Publish a turnaround for standard quotes and special prices, and measure it from your own timestamps.

front-end, back-end and when the money arrives

Front-end margin is the discount on the invoice. Back-end margin is paid later when a condition is met. Both can be the same total over a year and feel very different to a partner pricing a deal this week.

Microsoft’s documentation shows how long the gap can get. Its co-op guide describes incentive earnings split between a rebate, paid at each programme’s payout cadence, and co-op funds. Co-op accrues over a six-month earning period, has to be used in the following six months and claimed in a six-month window, and unused earnings are forfeited. In the example table on that page, earnings from July to December 2023 could be claimed from 16 February to 15 August 2024. Microsoft’s earnings FAQ adds that commerce incentive earnings can be restated for a rolling 12 months12 months is the rolling period over which Microsoft Commerce Incentives earnings can be restated. Microsoft, 2025.

That design suits a programme of Microsoft’s size and a partner with someone to track claims. A small integrator that bought engineer days in July cannot price a deal with a payment that may arrive the following summer. It prices with the money it can count on when it quotes, and it asks for that money as discount.

A workable split: front-end money for behaviour on this deal, such as a registered or partner-sourced opportunity or a new customer. Back-end money for behaviour over a period, such as growth, certified engineers or renewals. Pay the back-end on a published schedule, with a statement that shows which deals earned it.

the line you cannot cross in the EU

When partners keep cutting each other’s prices, it is tempting to tell them to stop. Under Article 4(a) of Regulation (EU) 2022/720 you may recommend a resale price or set a maximum. Fixing a minimum or fixed resale price is a hardcore restriction. Making a rebate or MDF payment depend on a partner not discounting below a level can amount to the same thing, as the Commission’s Guidelines on vertical restraints describe for indirect pressure on resale prices. Use structure instead: registration, fewer partners per segment and your own prices. This is not legal advice, and any policy that touches resale prices belongs with competition counsel.

the next discount request

When a partner asks for five more points, answer with a question: five points to beat whom, and to pay for what?