Question

Ski ABC Company manufactured too many ski jackets, overestimating the quantity retailers would purchase. So Ski ABC has offered its customers a lower cost of purchase, 20 percent lower, if they order ten or more jackets. The company is displaying an example of what

Answer 1

The company is displaying an example of buying allowances.

What is purchase allowance?

A manufacturer or distributor may give a purchasing allowance as a discount on the list price in exchange for a minimum order. A consumer may also be given this amount in return for keeping any defective or inaccurate items. When a client has official buying functions, purchase allowances are more prevalent since the purchasing team may negotiate them with suppliers.

What is the difference between sales allowance and cash discount?

You might wish to offer a buyer an incentive occasionally while attempting to sell your house. Offering a monetary discount or a sales allowance might aid in the selling of your house if there is a significant supply of houses in your neighborhood. Both a sales allowance and a cash discount can assist persuade a buyer to buy your house, even if both incentives are different in theory.

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