Page 65 - Demo

Review Numbers & Money Exchange│ Unit1653.1 Trade Discount IntroductionA discount is a reduction in the value of goods and services made by wholesalers and retailers to increase sales, promote a product or dispose of inventory before it is obsolete. Usually, the merchant announces the discounts on certain occasions, such as the end of the calendar year or holidays and seasons.The discount has different ways and forms according to the type of goods, the customer and the merchant.Trade DiscountA discount is an amount deducted from the list price.Manufactures and distributors give retailers trade discount as incentives for a sale and cash discount as incentives for paying promptly. Discount are usually established by discount rates.Given is percent of decimal form, based on the money owed. The discount, then, is a percentage of the list price.Most products go from the manufacturer to the consumer by way of the wholesale merchant (wholesaler of distributor) and the retail merchant (retailer).Manufactures or wholesaler prepare a catalog of items it has to sale, it usually give each item a list price, also called a catalog price (3-1-1).