What is a Cumulative Quantity Discount?
Cumulative quantity discount, sometimes referred to as progressive discount, is a type of pricing structure used for businesses to reward customers who purchase large volumes of products or services at once. It works by offering discounts that increase with the quantity purchased. This type of discount encourages customers to purchase larger amounts of products or services, as the discount increases with the quantity purchased.
How does a Cumulative Quantity Discount work?
A cumulative quantity discount works by offering discounts that increase as the quantity of products or services purchased increases. For example, a business may offer a 10% discount on purchases of 5 items, a 20% discount on purchases of 10 items, and a 30% discount on purchases of 15 items. This type of discount encourages customers to purchase larger volumes of products or services, as the discounts increase with the quantity purchased.
Benefits of a Cumulative Quantity Discount
There are several benefits to using a cumulative quantity discount.
- It encourages customers to purchase more items or services, resulting in increased sales.
- It helps to build customer loyalty, as customers are rewarded for purchasing large volumes of products or services.
- It helps to reduce inventory costs, as businesses can purchase products or services in bulk with a bulk discount.
- It helps to reduce overhead costs, as businesses do not have to spend time and money on marketing campaigns to bring in new customers.
Conclusion
Cumulative quantity discounts are a great way for businesses to reward customers for purchasing larger volumes of products or services. This type of discount encourages customers to purchase more items or services, resulting in increased sales and reduced overhead costs. It also helps to build customer loyalty, as customers are rewarded for purchasing large volumes of products or services.References: