A manufacturer's VP of Sales once described their situation this way: "Our margins are exposed to the entire sales team, every quote." He didn't mean that as a good thing. He meant that anyone on the team could see, and change, the margin on any deal at any point in the quoting process. The result was a quoting environment where the margin on a closed deal was often meaningfully different from what the company had intended.
This kind of leakage rarely shows up on one bad deal. It shows up across hundreds of deals, a point or two at a time, until someone pulls a report and realizes the gap between expected margin and actual margin is significant. By then, months of quoting history have already shipped.
The questions below are a diagnostic. Each one points to a specific place where quoting processes let money out. Work through them honestly. The ones where your answer is "I don't know" or "it depends on the rep" are the ones worth addressing first.
Profit leakage in quoting usually doesn't look dramatic. It looks like inconsistency: two reps quoting the same product to similar customers at margins that are three or four points apart. It looks like deals that close below the quoted price because of "last-minute adjustments." It looks like freight and fees that get absorbed somewhere between the quote and the invoice. The signs are in the variance, not the outliers.
1. Do your reps have access to a floor price for every product they sell?
If the answer is no, then your reps are setting their own floors. Some will do it conservatively. Others will quote whatever it takes to win the deal, whether or not that margin makes the job worth doing. A floor price doesn't have to be complex. It can be a minimum margin by product category, applied in the quoting tool so that the rep simply can't submit a quote below it. Without one, the floor is wherever the rep decides it is.
2. Who approves discounts above a threshold, and how long does that approval typically take?
Most companies have an approval process in theory. In practice, the approval often lives in email, the manager is in back-to-back meetings, and the rep hears nothing for two days. By the time approval arrives, the customer has moved on or the rep has re-quoted without waiting. If you can't answer how long a discount approval typically takes, you don't actually have a functioning approval process. You have a policy that sometimes gets followed.
3. How many people in your company know your customer-specific pricing by memory?
If the answer is more than two or three, that pricing isn't really controlled. Customer-specific pricing that lives in people's heads is vulnerable to turnover, to a rep quoting from memory when they should check the agreement, and to new reps who don't know the history. Pricing that lives in the customer record in your quoting tool fires automatically, regardless of who is building the quote.
4. When did you last update your price list, and how did you communicate the change to reps?
Material costs change. Labor costs change. Freight rates change. If your price list updates annually and costs are moving quarterly, you are routinely quoting with margin assumptions that are no longer accurate. The second part of the question matters as much as the first. An updated price list that wasn't communicated clearly, or that reps are overriding out of habit, isn't really in effect.
5. Do quoted freight and fees match what appears on the invoice?
This is one of the most common and least visible leakage points. A rep quotes freight at a flat rate because it's faster. The actual freight comes in higher. The company absorbs the difference rather than go back to the customer. Do this a few hundred times a year and the total is not small. If you don't have a direct comparison of quoted vs. invoiced freight and fees across a sample of deals, you don't know whether this is happening.
6. Can a rep quote a product you don't have in stock or can't deliver on the promised timeline?
A deal that wins on a timeline you can't hit is not a good deal. It turns into an expedite cost, a customer service problem, or a re-negotiation. The quoting process should surface availability constraints before the quote goes out, not after the customer has a signed order in hand. If your quoting tool doesn't connect to inventory or production scheduling, your reps are making delivery promises based on what they think is true.
7. How long does a discount approval sit in email before it gets a response?
This question is related to question two but more specific. Pull your email threads from the last 90 days. Look at discount approval requests and measure the time from request to response. The number you find is how long your deals are sitting idle waiting for internal sign-off. If that number is 24 hours or more on average, deals are being lost or reps are skipping the process. Both outcomes cost money.
8. What is the gap between your average quoted margin and your average closed margin?
This is the summary question. If your average quoted margin is 34% and your average closed margin is 29%, five points are disappearing somewhere between the quote and the close. That gap is the total of everything above: reps adjusting price in final negotiations without approval, freight and fee absorption, last-minute discounts that don't get logged. If you don't currently measure this gap, measuring it is the first step. One manufacturer who started tracking this number found that tightening the quoting process recovered 30% of the margin they had been losing.
You don't need to fix all eight at once. Start with the questions where your answer was "I don't know." Those are the gaps that are costing you margin right now, without your awareness. Pick the one or two that seem most likely to be producing variance in your deal margins, and address those first.
The goal is a quoting process where the rules are in the system, not in the training materials. A rep who can't quote below the floor doesn't need to remember the policy. A deal that triggers an approval automatically doesn't need a manager watching every quote. The structure does the work that policing never quite manages to do.