Word: Trade Discount
Part of Speech: Noun
Definition: A trade discount is a reduction in the price of a product that a manufacturer or wholesaler gives to a retailer or merchant. This discount is usually applied to the list price (the original price) of the product before it is sold to customers.
Usage Instructions:
You use "trade discount" mainly in business contexts, especially when discussing prices and sales between manufacturers, wholesalers, and retailers.
It is important to note that this discount is often not visible to the general public; it is an agreement between businesses.
Example Sentence:
"When the store owner ordered bulk products from the manufacturer, she received a trade discount that allowed her to sell the items at a lower price."
Advanced Usage:
In business discussions, you might encounter terms like "net price," which refers to the price after the trade discount has been applied. For example, if the list price is $100 and the trade discount is 20%, the net price would be $80.
Word Variants:
Different Meanings:
In general, the term "discount" can refer to any reduction in price, not just in a trade context. For example, a sale discount for consumers at a retail store is often advertised to encourage purchases.
Synonyms:
Price reduction
Wholesale discount
Rebated price
Related Idioms and Phrasal Verbs:
"Cut a deal": This phrase means to negotiate a price that is lower than the original price, similar to receiving a trade discount.
"Mark down": This means to reduce the price of an item, which is somewhat related to the concept of offering a trade discount.