1. Pricing Business Products
Geographic pricing
Deals with delivery costs
FOB (free-on-board) origin pricing
The seller’s pricing is exclusive of delivery costs; the buyer pays the transportation costs
FOB destination pricing
The seller includes transportation costs in the product pricing
Transfer pricing
Prices charged in sales between an organization’s units
Copyright © Cengage Learning. All rights reserved

2. Pricing Business Products (cont’d)
Discounting
Trade discounts
Discounts offered to intermediaries or middlemen
Quantity discounts
Discounts for large volume purchases
Cash discounts
Discounts for prompt payment
Seasonal discounts
Price reductions for buyers who purchase out of season
Allowances
Price reductions to achieve certain goals such as returning used equipment or increasing sales of a particular item
Copyright © Cengage Learning. All rights reserved