Who typically receives a trade discount?

A trade discount is a reduction in the list price or retail price of goods offered by manufacturers or wholesalers to businesses, particularly those that are resellers or in a particular trade. Business customers, such as retailers who buy from wholesalers, are usually eligible for trade discounts because they intend to sell the goods to end consumers or use them as inventory.

This practice helps businesses manage their operating costs and allows them to maintain competitive pricing. Trade discounts are typically not available to retail customers or individual consumers, who generally pay the full retail price for products.

Understanding this context highlights why business customers are the intended recipients of trade discounts, as they are part of the supply chain and contribute to the distribution of goods rather than simply consuming them.