Merchandising Allowance

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Definition: Merchandising Allowance

Merchandise allowance is a promotion technique used by manufacturers to lure retailers to promote their product. Manufacturers use merchandising allowance technique to give some incentives to retailers by decreasing the wholesale price of product thus increasing margins of retailer. Also sometimes manufacturers provide certain goodies to be kept for in store promotion.


For example Fridge given by Coca Cola and Pepsi for promotion of their products. Manufacturers sometimes provide allowances when retailer buys goods in bulk this is called as volume merchandise allowance. In order to engage retailers manufacturers provide free goods if goods are bought in bulk above certain level. Also there is incentive scheme by which retailers are given vacation tickets or goodies for bulk sale of products.


This is merchandising allowance which is promotional incentive scheme employed by manufacturers to entice retailers to promote a particular product.

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