A waterfall discount is a type of volume-based cash discount where the price per unit decreases as the volume of units sold increases. This type of discount encourages customers to buy in larger quantities to receive a lower price per unit. For example, a company might offer a 10% discount for orders of 100 units or more. Waterfall discounts are often used in industries where products are typically purchased in bulk, such as food and beverage manufacturing. They can also be used to clearance out inventory that is no longer needed.