VOLUME DISCOUNT Meaning and
Definition
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A volume discount refers to a pricing strategy where a seller or supplier offers a reduced price or discount to a buyer based on the quantity or volume of goods or services purchased. Typically, the more units or quantity of goods purchased, the greater the discount offered by the seller.
This type of discount is commonly employed to incentivize buyers to purchase larger quantities, thereby promoting economies of scale and generating more revenue for the seller. By offering reduced prices for bulk purchases, sellers aim to encourage higher order volumes and foster long-term relationships with customers.
Volume discounts are particularly prevalent in business-to-business (B2B) transactions, where companies purchase goods or services in large quantities. Such discounts are often negotiated through contracts or agreements and can vary depending on the industry, product type, and the specific terms established by the seller.
The main advantage of volume discounts is that they provide cost savings for buyers who purchase goods or services in larger quantities, allowing them to obtain products at a lower average price per unit. Additionally, volume discounts can lead to increased customer loyalty, as it encourages repeat business and rewards customers who regularly place large orders. From the seller's perspective, these discounts can result in higher sales volumes, increased market share, and improved profitability through higher overall revenues.
Common Misspellings for VOLUME DISCOUNT
- colume discount
- bolume discount
- golume discount
- folume discount
- vilume discount
- vklume discount
- vllume discount
- vplume discount
- v0lume discount
- v9lume discount
- vokume discount
- vopume discount
- vooume discount
- volyme discount
- volhme discount
- voljme discount
- volime discount
- vol8me discount
- vol7me discount
- volune discount
Etymology of VOLUME DISCOUNT
The word "volume discount" is a compound noun formed by combining the word "volume", which comes from the Latin word "volumen" meaning "a roll or scroll", and the word "discount", which originates from the Latin word "disconter" meaning "reckon wrongly" or "deduct".
"Volume" in this context refers to the quantity or amount of goods or services being bought or sold. A "volume discount" is a reduction in price given to customers who purchase large quantities of a product or service. The term emerged in the mid-20th century as a way to describe this type of pricing benefit offered to purchasers based on the volume of their orders.
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