What does Quantity/Volume Pricing refer to in inventory management?

Quantity/Volume Pricing in inventory management refers specifically to item pricing that depends on the quantity purchased. This pricing strategy incentivizes customers to buy more of a product by offering lower prices per unit as the quantity increases. For example, if a customer buys a larger number of items, they might receive a discount, which can boost sales volume and improve overall customer satisfaction.

This pricing model is particularly effective in encouraging bulk purchases, which can help sellers clear inventory more efficiently and attract price-sensitive customers. It also reflects a common practice in B2B transactions, where larger orders often lead to negotiated pricing agreements based on volume.

While seasonal promotions, damage allowances, and cumulative pricing can influence pricing strategies in different contexts, they do not specifically define the practice of Quantity/Volume Pricing, which is distinct in its focus on per-unit cost reductions tied to purchase quantities.