Dealer Incentive

Posted in Marketing and Strategy Terms, Total Reads: 488

Definition: Dealer Incentive

Incentivizing a dealer is a sales strategy in which the price a dealer has to pay a manufacturing or a producer company is decreased. It, thereby, allows the dealer to reap higher margins or to have scope to reduce the selling price of a product further.

Dealer incentive is often linked to certain quota of units sold i.e. a dealer becomes entitled to a certain incentive only when he fulfils a particular sales criteria set for a period.

Automobile industry is an industry where dealer incentives are pretty common. With the goal in mind to increase the sales volume, car manufacturers often provide incentives to their dealers so that they push sales of a particular model in a given period. The dealer may choose to share their savings with their customers. If the dealer does not provide any discount on the selling price to their customers, then they enjoy high profits.

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