ECONOMICS

Detailed explanation-1: -Trade discount, also known as functional discount, is a reduction in catalogue price granted by manufacturers and wholesalers to their resellers based on order volume and status, as a custom of the trade, or to reward other members of their distribution channels for performing different functions.

Detailed explanation-2: -A trade discount is the amount by which a manufacturer reduces the retail price of a product when it sells to a reseller, rather than to the end customer.

Detailed explanation-3: -An item’s intended selling price, or net price, equals list price minus a given percentage called a trade discount. The amount of trade discount usually depends on whether a buyer is a wholesaler, retailer or final consumer. The larger the volume of the purchase, the larger the discount given.

Detailed explanation-4: -Trade discount is referred to as the discount that is offered by a seller to the buyer of the product in the form of reduction in the price of the item. Trade discounts are offered to increase the sales of the product and make the customers feel that they are getting the best offer.

Detailed explanation-5: -Cash Discount The amount, for which the listed price of the goods sold is reduced, trades discount. The amount deducted from invoice price for realizing outstanding sales amount is a cash discount. Generally, trade discount is granted to bulk buyers.