When a business buys products, the price paid is the cost to the business. ![]() If your business purchases a product from a supplier, any discount it receives lowers how much the business pays to acquire the product. Retailers use various terms for discounts, including sales or clearance. As a consumer, you are bombarded with discounts all the time. If you are a manufacturer, then your cost equals all of the labor, materials, and production expenditures that went into creating the product.Ī discount is a reduction in the price of a product. If you are a reseller (also known as a middleman or intermediary), what you pay to your supplier for the product is your cost. ![]() If you are a consumer, the ticketed price tag on the product is your cost. The cost of a product is the amount of money required to obtain the merchandise. You go to Dairy Queen for a Blizzard to soothe your headache while you figure things out. It is also Bay Days, which means you can scratch and win a further 10% to 20% off the sale price. You head over to The Bay for a warehouse clearance event that has the same toy priced at $64.99 but at 35% off. ![]() Toys R’ Us has an outlet in the parking lot where the regular price for the same toy is $59.99, but all Batman products are being cleared out at 40% off. Walmart is running their Rollback promotion and is offering a Batmobile for 25% off, regularly priced at $49.99. You mutter in exasperation, “Why can’t they just set one price and stick with it?” Your mind boggles at all the competing discounts you encounter at the mall in your search for that perfect Batman toy for your nephew.
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