What is a Volume Discount?

A volume discount is a pricing strategy used by vendors to encourage customers to purchase goods in larger quantities. In essence, it works quite simply the more that you buy, the less each unit COGS would be. By rewarding customers with lower costs for larger orders. This will help in bulk buying while enabling merchants to move more inventory and boost restaurant revenue.

How Do Volume Discounts Operate?

Volume discounts are based on the tiered pricing model, in which the percentage of the discount rises as the amount bought increases. For instance, a vendor may provide-

• 5% off orders between 100 and 499 units
• 10% off purchases between 500 and 999 pieces
• 15% off orders totaling more than 1,000 units

Customers are encouraged to do larger orders in order to receive greater discounts, thanks to this tiered structure.