Business Volume Discount
Business Volume Discount is the discount that suppliers can provide to buyers if the business allotted to them exceeds a certain amount (in currency). Business volume discounts can be defined on one or more categories. The discount can be expressed in percentage or amount. Suppliers can have multiple business volume discounts in effect at any given time.
Difference Between Business Volume Discounts and Volume Discount Bids
The following are the differences between business volume discounts and volume discount bids:
- Business volume discounts are based on volume of business in currency and volume discounts are based on quantity of items.
- Business volume discounts are based on a category and applies to the entire RFx, whereas volume discount bids are based on a bid in an RFx.
The following table represents an example of business volume discounts applied to an
RFx.
| Category: Notebook | |||
|---|---|---|---|
| Currency: United States Dollar (USD) | |||
| Volume | Discount | Currency or % | |
| More than | 50000 | 2 | % |
| More than | 100000 | 5000 | USD |
| More than | 125000 | 10000 | USD |
In the Example of Business Volume Discount, if the supplier is allotted more than 50,000 USD worth of business for the category of notebooks, the supplier provides a discount of 2% on actual volume of business.
Also, if the supplier is allotted more than 100,000 USD worth of business for the category of note books, the supplier provides a discount of 5000 USD.