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Trade discount, also known as functional discount, is a reduction in catalogue price granted by manufacturers and wholesalers to their resellers based on order volume and status, as a custom of the trade, or to reward other members of their distribution channels for performing different functions.
Example: If a manufacturer offers a 10% functional discount to a distributor on a product with a list price of $1,000, the distributor pays only $900 ($1,000 – 10% = $900) for each unit purchased in bulk.
26 maj 2024 · Understanding trade discounts is essential for businesses aiming to optimize their financial strategies and maintain competitive pricing. Types of Trade Discounts. Trade discounts come in various forms, each designed to incentivize different purchasing behaviors.
18 gru 2022 · Examples of a situation where a functional discount is used include purchases of goods or services from a supplier, the acquisition of securities/ assets/ investments via a broker or a dealer, or retail sales that are transacted between a retailer and an end consumer.
7 gru 2023 · A trade discount is also known as a functional discount. Related Articles. Accounting for Sales Discounts. Cash Discounts. Quantity Discount. A trade discount is the amount by which a manufacturer reduces the retail price of a product when it sells to a reseller, rather than to the end customer.
Mathematics of Merchandising. 7.1 Trade Discounts. A. Introduction to Mathematics of Merchandising. Imagine walking into a shopping mall during the holiday season. Every store displays an array of products, each tagged with a price, and every discount sign represents a carefully calculated decision.
12 maj 2021 · A price reduction offered by the seller of goods to those trade channel members that perform certain functions, such as selling, storing, and record keeping. ...
