What is a bulk discount?

A bulk discount refers specifically to a pricing strategy that offers a reduced price to customers who purchase large quantities of a product. This strategy is used to incentivize customers to buy more items in a single transaction, which can help businesses increase sales volume and reduce inventory levels.

By encouraging larger purchases, businesses can benefit from economies of scale, allowing them to maintain competitive pricing while improving their profit margins. Bulk discounts are typically structured on a tiered basis, meaning the more an individual buys, the larger the discount they receive, which can be appealing for both individual consumers and businesses looking to stock up on supplies.

Understanding bulk discounts is essential for recognizing how businesses motivate customer loyalty and promote larger sales, which can be beneficial in a variety of retail and wholesale environments.