What is Quantity Discount in Retail? Explained

A quantity discount in the retail context is a pricing strategy where the unit cost of a product decreases as the quantity purchased increases. This incentive encourages customers to buy in larger volumes, providing them with cost savings for buying in bulk. Quantity discounts are commonly applied to various products, ranging from consumer goods to business-to-business transactions. Retailers use this pricing approach to stimulate larger purchases, reward customer loyalty, and promote inventory turnover. The structure of quantity discounts may involve different tiers, with greater discounts offered for higher quantities. This strategy benefits both customers, who enjoy cost savings, and retailers, who can boost sales volume and enhance customer loyalty.