When a High Discount Does Not Mean the Lowest Cost

A call after an attractive purchase

One day, a customer named Magnús called us. He had already completed the purchase independently. He explained that he had found a store with very attractive prices and discounts of up to 30 percent on selected products.

This was interesting. At the time, a similar store offered our customers a fixed 15 percent discount across its entire range. Magnús therefore appeared to have negotiated exceptionally strong terms.

However, he needed help with the next stage. The store did not offer export sales or a VAT refund, so he asked whether we could help him export the goods without Polish VAT.

The discount was only one part of the calculation

The order exceeded PLN 200,000. At that value, VAT alone amounted to approximately PLN 46,000, more than EUR 10,000 at the exchange rate at the time.

This changed the overall picture. Even if some products were discounted by an additional several percentage points, the inability to recover VAT could make the total order more expensive than an offer with a lower discount but a properly handled export process.

Magnús had not made a mistake by looking for a good price. That is natural with a large purchase. The difficulty was that the product price had been evaluated separately from the total transaction cost.

We checked the conditions directly with the store

After speaking with Magnús, I visited the store personally and met with its management.

It was confirmed that discounts of up to 30 percent could be achieved on selected products after lengthy negotiations. At the same time, sales to export customers were blocked by the company's internal policy. The store also had no VAT refund procedure for this transaction.

This did not mean that export was completely impossible. In certain situations, we can find another lawful export structure. However, it requires additional documentation, the involvement of appropriate entities and costs that would not arise when purchasing from an export-ready supplier.

The customer did not continue the discussion

We offered Magnús our support and explained that the costs and structure of the operation would need to be discussed.

The project did not proceed. Contact ended before we could analyse all available options together.

I do not know what he ultimately did with the order. I can only assume that the scale of the decision, the amount of money already committed and the additional formalities may have felt overwhelming.

What we now check before an order is placed

Magnús's story showed us that a discount should only be assessed after several basic questions have been answered:

• Does the store support export sales?
• Can it issue the documents required for export?
• Does it allow VAT-free sales or a later VAT refund?
• What are the transport, customs and documentation costs?
• Can all products be included in one efficient export process?

Only the combination of these elements reveals the real purchase cost.

The key lesson

Magnús found attractive prices and negotiated effectively. That was a strong part of his purchasing process.

Only one element was missing: checking the export rules before placing a large order.

In international purchasing, the highest discount does not always mean the lowest cost. Sometimes the better offer is the one that accounts for tax, documentation, transport and a safe completion of the transaction from the beginning.