The Supplier's BAM Calculator | Castle Negotiations

Before you say yes to their discount, know what it costs you.

When a customer pushes back on price, terms, or scope, most vendors either cave too fast or hold a number they can't defend. Work out the position you can stand behind before you're in the room.

BAM: Best Agreement to Make. It sits between your list price and their number. That's the floor and counter-position you can defend, matched to how much leverage you have in this relationship.

A discount that looks small against revenue can take a much bigger bite out of your actual profit than the headline percentage suggests.

Longer payment terms carry a real, calculable cost, even when the invoice price never moves.

How much you should concede depends on your leverage in this relationship, not on how uncomfortable the silence feels across the table.

Work out your BAM

Answer honestly. The tool only works as well as what you put into it. We don't store or send anything you enter. It stays in your browser.

What they're asking for

Annual value of this account Total yearly revenue you get from this customer.

Current payment terms (days) What you're paid on today (for example, 30 for Net 30).

Requested price reduction 5%

No change40% cut

Requested payment terms (days) Leave equal to current terms if they're not asking for a change.

Your cost of capital 10%

What unpaid cash costs you: your credit line rate, a loan rate, or what you'd earn putting it to work elsewhere. Most small businesses land in the 8–15% range.

Are they also asking for more work, without more budget? The "while we're at it, could you also…" ask. Scope creep dressed up as relationship management.

Estimated size of the extra ask 10%

As a rough share of your current effort or deliverables on this account.

Your position

Current gross margin on this account 30%

Price minus your cost to deliver, as a percentage of price.

This customer's share of your total revenue 20%

Barely mattersNearly everything

How hard would it be for them to replace you? 5/10

Moderate: meaningful switching cost, a few months

Trivial swapCan't realistically leave

Your alternative revenue pipeline If you walked away from this deal, how ready are you to replace it?

Your walk-away minimum margin (optional) The lowest margin at which this account is still worth keeping. Leave blank and we'll suggest a conservative floor.

Your position, calculated

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Profit erosion if you say yes to everything

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This measures profit on the account, not revenue.

Profit erosion if you hold your BAM instead

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The difference is what preparation buys you.

What holding your BAM saves you vs. their full ask

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Per year, on this account alone.

Your leverage in this relationship —

Trades worth proposing

Never move off your BAM for nothing. Every concession should buy you something back.

How we calculate this

We calculate profit erosion as your requested discount divided by your margin, or d ÷ m. If your underlying cost to deliver doesn't change, a price cut comes straight out of profit. On a 20% margin, a 5% discount costs you 25% of your profit on that account, not 5%.

Every extra day a customer holds your money is a day you're financing them for free. We calculate that cost as contract value × (extra days ÷ 365) × your cost of capital.

The leverage score runs from 0 to 100 and comes from three factors: how concentrated your revenue is with this one customer, how hard it would be for them to replace you, and how ready you are to replace this revenue elsewhere. Lower concentration, a harder replacement, and a readier pipeline all push the score up.

Your BAM moves with that score. More leverage means you concede a smaller share of what they asked for. It never drops below the floor set by your walk-away minimum margin, and it never goes above your current price.