Volume Discount Definition

A volume discount is a type of pricing structure that offers lower prices to customers who purchase large quantities of a product. The price per unit decreases as the quantity increases, so customers who buy in bulk can save money. This type of discount incentivizes customers to buy more of a product, which can help businesses increase sales and revenue.

There are different types of volume discounts, including tiered discounts and sliding scale discounts. Tiered discounts offer different price points for different levels of quantity, so the more you buy, the more you save. Sliding scale discounts offer a linear discount, so the price per unit decreases by a set amount with each additional unit purchased.

businesses often use volume discounts as a way to move inventory or clear out old stock. They may also use volume discounts to attract new customers or build loyalty among existing ones. Whatever the reason, volume discounts can be a helpful tool for businesses to increase sales and revenue.