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Discounts and allowances are reductions to a basic price of goods or services.

They might change the manufacturer’s list price (established by the manufacturer and frequently printed on the box), the retail price (set by the retailer and frequently affixed to the goods with a sticker), or the list price at any point in the distribution chain (which is quoted to a potential buyer, usually in written form).

Discounting can be done for a variety of reasons, such as to boost short-term sales, move outdated inventory, reward loyal customers, motivate channel members to fulfill a task, or incentivize other actions that benefit the discount issuer.

Some concessions and discounts function as sales promotions. There are several price discrimination strategies that let the vendor keep a portion of the excess from the customer.

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