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Cash Discount
A reduction in the full cost of a
good or service when payment is made within
a specified time period. See also: Payment
Terms, Prompt Payment Discount, Discount.
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Discount
An allowance, reduction, or deduction
from a selling price or list price extended by a
seller to a buyer in order for the net price to
become more competitive. More common
forms of discounts include trade discounts,
quantity discounts, seasonal discounts, and
cash discounts. See also: Payment Terms,
Prompt Payment Discount, Cash Discount.
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Discount Schedule
A listing of various discounts
offered to a buyer for varying amounts of
goods or services. May be requested as part
of a solicitation.
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Discount-From-List
Mathematical calculation to
determine a buyer’s price from a
manufacturer’s price list. On non-automated
term contracts, the manufacturer must
submit a printed price list/catalog from which
prices are to be figured. Prices in this category
cannot be increased for a specified time
period after the contract begins, unless
otherwise noted in the contract.
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Prompt Payment Discount
A reduction in cost
offered by the supplier in exchange for
early/accelerated payment by the customer.
See also: Payment Terms, Cash Discount,
Discount.
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Quantity Discount
A reduction in the unit price
offered for a large volume contract.
Economies of scale would dictate that the
larger the volume/quantity, the lower the unit
price or total cost. See also: Volume Discount,
Volume Leveraging, Economies of Scale.
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Trade Discount
A discount or reduction from a
list price based on the position of the
purchaser in the distribution channel, for
example, as a distributor, retailer, or original
equipment manufacturer.
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Volume Discount
Discount offered to a buyer
from a seller based on increased quantity
purchased, the size of the order, or total
annual volume. See also: Quantity Discount,
Volume Leveraging, Economies of Scale.
