Retailers will get flat 10% to any other retailer

Distributors’ discounts are price deductions that systematically make the net price vary according to buyers’ position in the chain of distribution. They are so called because these discounts are given to various distributors in the trade channel, e.g., wholesalers, factors (Adatias), dealers and retailers. For the same reason, they are also called as trade channel discounts.

As these discounts create differential prices for different customers on the basis of marketing functions performed by them (e.g., where they are wholesalers or retailers), they are also called as functional discounts. However, it must be pointed out that special discounts may also be given to persons other than distributors (and not associated with distribution function). For example, special discounts may be given to manufacturers who incorporate the product in their own product. Tyres and tubes sold to cycle manufacturers for use in their bicycles, is a typical example.

Special prices may be charged to members of the same industry, e.g., petroleum may be exchanged by one company with another company at a special price. Again, special prices may be quoted to central and state government and to universities; for example. Remington typewriters, Godrej safes, etc., are sold at a concessional price to these bodies. Distributor’s discounts take different forms mainly determined by convention in the industry. Nevertheless, at times a company may have to decide about the form in which discount is to be offered.