Discount Policies Quantity Discounts. These are offered to encourage customers to buy in larger amounts. When buying more, the customer pays less per unit. Cumulative quantity discounts apply to all goods purchased in a given period.
Noncumulative discounts apply only to individual orders.
These are offered to encourage buyers to buy earlier than present demand requires. Manufacturers use this policy to help shift the storing function further along in the channel and to stabilize demand, useful if producers face irregular demand or capacity constraints. Since most businesses pay on credit, cash discounts can aid both buyer and seller. These are reductions in the list price given to channel members that perform one or more marketing functions for the producer. This is a temporary discount off the list price.