Discounts given by manufacturers or retailers to a company in the same trade are called?

• A. Quantity Discounts
• B. Trade Discounts
• C. Seasonal Discounts
• D. Geographics

Answer: (B)

Trade discounts are reductions offered by manufacturers or wholesalers to other businesses in the same trade to encourage ongoing purchases and maintain channel partnerships. These discounts lower the list price for intermediaries like retailers or distributors, recognizing the business relationship and the role they play in moving the product to end customers. This type of discount is different from other price cuts: quantity discounts depend on how much is bought, seasonal discounts aim to spur purchases during off-peak times, and geographic discounts are based on location. In short, the discount is targeted at business buyers within the trade to support channel stability and sales, not based on volume, season, or geography.