How is a cumulative quantity discount generally structured?

A cumulative quantity discount is designed to incentivize customers to make repeated purchases over a period of time rather than just a single transaction. This type of discount rewards a buyer for their total amount of purchases within a specific timeframe, encouraging customer loyalty and promoting larger overall sales volume.

By offering a discount based on the cumulative total of several orders, businesses create an incentive for customers to continue purchasing from them, as the discount increases based on the customer's total purchases. This approach contrasts with other types of discounts that may only apply to individual bulk purchases or have irregular application criteria. In this way, the cumulative quantity discount not only fosters ongoing customer relationships but also aids in forecast planning for inventory and sales.