Editing Discounts and allowances (section)

== Dealing with quantity ==
[[File:021 Discount book and DVD shop in Dordrecht, Netherlands.jpg|thumb|DVD films sold at a discount when 2 items are purchased]]
These are price reductions given for [[bulk purchasing]]. The rationale behind them is to obtain [[economies of scale]] and pass some (or all) of these savings on to the customer. In some industries, buyer groups and [[Purchasing cooperative|co-operatives]] have formed to take advantage of these discounts. Iyengar and Jedidi note the popularity of quantity discounts being offered to both business purchasers and consumers.<ref name=conj /> Generally there are two types:

=== Cumulative quantity discount{{anchor|Cumulative quantity discount}} ===
Cumulative quantity discounts, also called accumulation discounts, are price reductions based on the quantity purchased over a set period of time. The seller's expectation is that they will impose an implied [[switching cost]] and thereby bond the purchaser to the seller.

=== Non-cumulative quantity discount {{anchor|Non-uantity discount}} ===
These are price reductions based on the quantity of a single order. The seller's expectation is that they will encourage larger orders, thus reducing billing, order filling, shipping, and sales personnel expenses.

If a purchaser has to buy more than they need to secure a discount, we can distinguish between the surplus just not being used, or the surplus being a nuisance, e.g. because of having to carry a large container.