Discounts are retroactive payments that are used to drive revenue growth, without simply reducing the price indicated by a discount. The essential element is that discounts are granted unlike discounts after the first payment of the goods. In our experience with companies that manage complex discount agreements, we have encountered several different types of discounts. Some of these operations are more self-explanatory, such as for example. B a fixed sum of money or a fixed percentage of the total turnover over the duration of the agreement. However, with the extension of the range of discounts, rebate agreements have become more complex and specific in order to bring the greatest possible benefit to all parties involved. Why get a low discount rate for all products (some of which you may never have in stock!) when you can negotiate a higher discount rate for one of your most traded products? Of course, volume discounts could be easier and earn a fixed amount in each target band instead of a rate per unit. They could also include percentages instead of per unit rates. Discount agreements typically specify which products, locations, and transaction types are included.
For example, purchases delivered directly to the site may be excluded from eligibility for discount winnings. A better understanding of the different types of incentive offers – how they are structured and calculated – can be beneficial for managing your company`s discount. The different types of incentive agreements offered usually depend on the manufacturer concerned, some may exclusively negotiate volume discounts, others only offer volume discounts for groups of buyers. For example, a reduction in volumes could have incentive objectives: incentive discounts are used to encourage purchase in a given product category. The incentive offered by the manufacturer or supplier means that the more you deal with that partner during your business, the better the discount rates you get. This helps to promote loyalty to certain business partners and protects the supplier from the risk of its business partners coming into contact with their competitors through similar products. Rebate agreements that stimulate growth earn discounts when certain growth thresholds are reached.