Definition of 'Volume Discount a volume discount is a financial incentive to encourage individuals or buffet town raffles city lunch businesses to purchase goods in multiple units or in large quantities.
Most standard purchasing systems cant help with this, but unless accurate records are kept the deal can fail to be realised.
In order to cut logistics costs, some suppliers prefer to deliver to a central distribution centre.The offer does not apply to DMA trades.This is sometimes achieved through extra volume discounts on the old lines. .Check back next week for an overview of best practices for channel management rebates!Following last weeks post introducing rebates, I will now shift to highlighting some common rebate types, which can be categorized by business objective and customer type.Retention rebates are rebates paid to reward continued business, or customer loyalty.2 - Growth Incentives, where the supplier is keen to increase the total volume not just the individual order volume, a rebate based on incremental growth in orders is often used.As old versions are being phased out, suppliers might plan to ship as much of the remaining stock as possible before the new version appears. .To find out more about managing the complexities of your rebate contracts, download our guide).For example, the discount might go into effect after 100 units are purchased, and only apply to the units beyond that threshold.Instead of"ng a price driven largely by the customers intended, or promised volume, the seller responds with tiered pricing where the Invoice Price is fixed, but the actual price varies with volume and the difference is granted by rebate.In these cases, whilst the purchasing company isnt adding too much to their own costs by agreeing to ship from their CDC to branches, they can benefit from the discounts offered. .
The seller or manufacturer rewards those buying in bulk by providing a reduced price for each good or group of goods.
The same would be true if 27 units were purchased; two units would cost full price while 25 units get the lower rate.