Posted in Marketing and Strategy Terms, Total Reads: 647
Definition: Volume Discount
It is the discount offered by the producer to individuals or businesses who buy in large quantities. The simple logic behind volume discount is that the producer gets to sell more, sell quickly, reduce his transaction cost, reduce his inventory cost for the hit he takes on his profit margin by offering discounts. The buyer gets the discount but in exchange he has to incur higher inventory cost and may incur loss if he can’t use all he has bought.