Volume Discount

Volume discount pricing is a strategy that provides financial incentives for purchasing a product or service in high volumes.

Volume discount. Meaning of volume discount the concept of volume discount is applicable for both business to business and business to consumers. Customers often purchase more. For instance one volume discount may be a percentage discount once a certain revenue threshold has been hit such as 5 percent off of every 10 000. This will usually be in the section of the contract pertaining to pricing.

Volume discount can be defined as when the business or the brand gives the financial incentives or advantages in order to motivate the customers or the group of individuals to purchase in the huge quantity. Volume discount is a discount offered to the buyers to incentivize them when they purchase a large number of products at once i e. A volume discount is a price reduction offered to buyers who purchase in bulk quantities. When a customer purchases a product in multiple units or a large enough quantity at once the seller rewards the buyer by selling at a reduced price for each group of goods purchased.

Producers or sellers are able to reduce inventories and take advantage of economies of scale by allowing. Determine the current volume discount. For example a company may offer the following discount structure. The pricing strategy as a general rule works.

Often referred to as the all units model the discount is greater as the number of units sold increases and the discount applies to all units. A customer purchases a lot at once to get a lower price per unit. When they place a bulk order.