The unit price fell 6%. The order quantity tripled.

Volume discounts are the easiest saving in the business to evidence, and the hardest to work out whether you actually made.

By Steve 5 min read
Abstract bridge artwork for The unit price fell 6%. The order quantity tripled.

A supplier offers 6% off if the order goes from one pallet to three. The saving is arithmetic, it lands on the purchase ledger, and whoever negotiated it can point to a number. The cost lands somewhere else entirely, in the cash account, in the warehouse, in the two months of demand you have now committed to a forecast you don’t trust. Nobody reports that. So the deal looks free, and it gets taken again next quarter. This is not an argument against volume discounts. Plenty of them are worth…

Keep reading for free

Create an account to read the rest.

The whole library is free. No card, no subscription, no trial that quietly ends. An account simply lets us know who we are writing for, and opens every article from here on.

  • Every article, in full, at no cost
  • New articles published every weekday
  • Takes about twenty seconds
Create a free account I already have one

Free means free. We will not charge you for the library, and you can read as much of it as you like.

Important: General information only. Rialto Bridge articles describe patterns and considerations that may apply to a business; they are not financial, legal, tax or accounting advice, and they take no account of your particular circumstances. Consider your own situation and seek advice from a qualified professional before acting.

More on Operations

Scroll to Top