How we change what others think, feel, believe and do

Quantity Discount

Disciplines > Marketing > Pricing > Quantity Discount

Description | Example | Discussion | See also

Description

In a sale, one way of pricing is to offer a greater discount for a greater quantity purchase.

Depending on the product, quantities can be two, three, five, ten or even more. It can help if the quantity number is attractive (the price too).

When displaying quantity discount pricing, you can also show the actual cost per item, so customers can easily see how much more they save at each step.

Displaying goods pre-packed in quantities makes it easier for customers to pick them up.

Example

A retail store packages breakfast cereals in bundles of twos, threes and fives, then discounts these with bold signs showing how you can get even greater discount when you buy more.

A store specialises in selling in quantity, with all its products in cardboard boxes. It promotes itself as a 'warehouse' that sells at 'trade prices'.

A wine seller discounts the price of wine if you buy a 'case'.

Discussion

Quantity discounts suit some products more than others, most typically consumables. Yet things that may expected to have a lifetime of a few years can still be attractive in quantity as people buy them for much later use, as 'backup', gifts and so on.

A way of encouraging purchase of a particular quantity is to make the differential between this and the next pack down significantly more. For example if you charge $5 for one, $9 for two, $7 for three and $6.75 for four. The 'three' deal looks the best as discounts drop off after this. Putting in such an 'end stop' also helps people decide which is the best bargain.

Quantity discounts are particularly useful if you have a lot of excess stock to shift.

Another use for giving quantity discount is if the buyer wants to negotiate. You simply give them a quantity discount rather than selling single units for a lower price. This preserve the unit price as well as selling more.

A variant on quantity of packages is quantity of the actual goods, for example selling washing powder in 'jumbo' sized boxes or catering tubs.

The twofer and other 'bargains' are effectively quantity discounts.

See also

Discountable Pricing, Discounting, Bundle Pricing