Quantity Discount: defined by the Sticky-Marketing.com monthly magazine |
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A quantity discount is a reduction in price available to the purchaser for buying a specific quantity. Quantity discounts often form part of the economics of a distribution channel with the costs of handling and distributing larger quantities usually being lower per unit than for distributing smaller quantities and the volumes or batch sizes expected to be bought by distributors usually larger than by end users. Producers should be aware however that quantity discounts can lead to more stock throughout the whole supply chain which slows reaction to customer orders and ties up more working capital than might otherwise be needed. Further forcing or influencing customers to buy in bulk may have absolutely no positive effect on their overall volumes but is likely to reduce the unit price achieved by the producer. 07/08/2001 Use your browser back button or
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