TRADE ALLOWANCE Meaning and
Definition
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Trade allowance is a term used in business transactions referring to a discount or rebate given by a manufacturer or seller to a retailer or customer in order to promote the sale of their products or services. This allowance, also known as a trade-in allowance or promotional allowance, typically involves a reduction in the purchase price of a product or an additional quantity of the product provided at no cost.
Trade allowances can be implemented in various forms depending on the specific circumstances and objectives of the trade agreement. For instance, a manufacturer may offer a monetary incentive to a retailer for promoting and selling their product, which could be presented as a percentage discount on the wholesale price or a fixed dollar amount per unit sold. Alternatively, a trade allowance could involve the manufacturer accepting an old or used item as a partial payment towards the purchase of a new product. This type of trade-in allowance is commonly seen in the automotive industry when consumers trade in their old cars to receive a discount on the purchase of a new vehicle.
Trade allowances are regarded as a strategic marketing tool intended to stimulate sales and enhance trade relationships between manufacturers, sellers, and customers. By providing incentives for retailers and consumers, trade allowances encourage increased product demand, improve product visibility, and promote brand loyalty.
Common Misspellings for TRADE ALLOWANCE
- rrade allowance
- frade allowance
- grade allowance
- yrade allowance
- 6rade allowance
- 5rade allowance
- teade allowance
- tdade allowance
- tfade allowance
- ttade allowance
- t5ade allowance
- t4ade allowance
- trzde allowance
- trsde allowance
- trwde allowance
- trqde allowance
- trase allowance
- traxe allowance
- trace allowance
- trafe allowance
Etymology of TRADE ALLOWANCE
The word "trade allowance" does not have an etymology of its own, as it is formed by the combination of two separate words: "trade" and "allowance".
The term "trade" comes from the Middle English word "traden", which derives from the Old English word "tradian", meaning "to tread" or "to step". In the context of commerce, it refers to the act of buying, selling, or exchanging goods, typically on a large scale.
On the other hand, "allowance" comes from the Old French word "allouance", which is derived from the verb "alouer", meaning "to approve" or "to assign". In English, "allowance" originally meant to assign or allocate a portion of something to someone.
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