Fee Discount Impact Calculator

See what a small discount actually does to your profit, not your revenue.

Why this exists. Fee undercutting is the defining problem in several architecture markets, and no free tool shows an owner what it costs them.

Region

United States, Canada and UK

Fee before discount

Your operating margin at full fee (%)Industry average is about 19.9%.

Discount you are considering (%)

Everything here is calculated in your browser. Your numbers are never sent anywhere, stored or seen by us.

Profit given away$4,500That is 50% of the profit, for a 10% discount.

Fee before: $45,000
Fee after discount: $40,500
Cost to deliver (unchanged)The discount does not reduce the work: $36,045
Profit before: $8,955
Profit after: $4,455
Margin after discount: 11.0%
Discounted projects needed to replace one full-fee project: 2.01

A 10% discount removes 50% of the profit. The discount looks small because it is measured against revenue, but it comes entirely out of margin.

You would need 2.0 projects at the discounted fee to make the profit of one at full fee, for considerably more work and risk.

How this is calculated

The cost of delivering the project is held constant, because a discount does not reduce the drawings, the meetings or the site visits.
Operating margin here is profit as a share of fee. If you are a sole practitioner, deduct your own compensation as a cost first, or the margin will look far higher than it is.

This is a planning estimate, not professional advice. Read the full disclaimer.

Discounting is what a studio does when the pipeline is thin.

Fix the pipeline and the discount conversation stops happening. Start with a free growth audit.

Talk to the founder

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The thinking behind it

Where this number comes from.

Practice

What a ten per cent discount actually costs your studio

A ten per cent fee cut does not reduce your profit by ten per cent. At a typical architecture margin it removes about half of it.

Practice

Where an architecture firm’s margin actually leaks

Six places the fee disappears between the proposal and the bank, the published benchmark for each, and the uncomfortable finding that the two metrics everyone tracks barely predict profit at all.