Understanding pricing

Suppliers may give their prices in any of the following ways:

  • Simple price. What you see is what you pay. This is generally used by businesses selling to other businesses, where you will then do a lot of work on the product and the original product will be a small part of a bigger whole once you sell it on to your end customer. For example, if you’re making cars and are buying rubber hose, you will just pay a price per metre.
  • Recommended retail price, less trade discount. This is generally used by suppliers to the retail and service trade, where the goods are going to be sold on unchanged to the end user. For example, if you run a bookshop, you’ll buy the books from the publisher at around 40–50 per cent discount off the ...

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