If a company gives its products or charges a lower price at its cost and plans to increase it later to recover from the initial losses, such a predatory price assignment (Predatory Pricing) is probably illegal. Microsoft was accused of this practice when he gave his web browser, Internet Explorer, supposedly to obtain a dominant position in the market. Critics affirm that the predatory price allocation can take out of the market of various companies and, thereby reduce competition, in which case it or surviving companies can greatly increase prices. Other observers say that low prices, whatever the seller’s purpose, benefit buyers. In any case, after at the beginning of the 1990s, the Court Price Assignment Strategies
Superior justice of the United States rejected an accusation of harmful low prices, it is very difficult to demonstrate in the courts the predatory nature of a price allocation.15
Discounts and discounts Discounts and rebates result in a base price deduction (or list price). The deduction can be in the form of a reduced price or of some other gift or concession, as a free merchandise or discounts offered in advertising. Discounts and discounts are common in business dealings.
Volume discounts Volume discounts are deductions from the list price of a vendor whose purpose is to encourage customers to buy in large quantities or buy more than they need; These discounts are based on the size of the purchase, either in the amount in money or in units. A non-cumulative discount is based on the size of an individual order of one or more products. A retailer maybe sell golf balls to two dollars each or at a rate of three balls for five dollars. A manufacturer or wholesale may make a quantity discount program such as the following, which uses a manufacturer of industrial adhesives: boxes purchased in a single order
Non-cumulative amount discounts are granted to encourage large orders to be made. Many expenses, such as billing, ordering and sales staff salaries are approximately the same, whether the seller receives an order for $ 10 or one for $ 500. The result of this is that sales expenses as a percentage of sales decrease as orders grow in size.