Discounts do not only attract customers. Some discounts even encourage the customers to by in large quanties while others encourage the customers to pay promptly.
Quantity discount encourage a customer to buy more because the customer is expected to receive a higher discount if he/she buys in large quantity. Here the percentage discount depends on the quantity purchased. There is cash discount which encourages the customer to pay promptly. The customer only receive the cash discount if goods are sold to the customer on credit and pays on or before the end of the credit period. A customer is expected to attract both discounts if she/he meets up with the required terms of trade.
Quantity discount encourage a customer to buy more because the customer is expected to receive a higher discount if he/she buys in large quantity. Here the percentage discount depends on the quantity purchased. There is cash discount which encourages the customer to pay promptly. The customer only receive the cash discount if goods are sold to the customer on credit and pays on or before the end of the credit period. A customer is expected to attract both discounts if she/he meets up with the required terms of trade.
