MANAGEMENT

Detailed explanation-1: -Manufacturers often prepare product catalogues for wholesalers, retailers and other resellers. These product catalogues will contain the listed prices of the products. However, when a reseller offers to buy the product in bulk, the manufacturer reduces the listed price of the product. This is called a trade discount.

Detailed explanation-2: -A trade discount is also known as a functional discount and the two terms are used interchangeably. Nevertheless, a functional discount sometimes refers specifically to a reduction in list price granted to members of a seller’s distribution channel to reward them for their function in the supply chain.

Detailed explanation-3: -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-4: -The list price, or catalog price of an item, is the price for which you can generally sell an item. You can purchase the item at a trade discount, which is a discount off the list price. The trade-discount rate is the amount of the discount expressed as a percentage.

Detailed explanation-5: -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.