Volume Incentive Agreement

Mixed discounts are a proven method to improve the range of customers and products of a delivery relationship. A seller uses mixed discounts to encourage a distributor to sell more mixing volume or higher margin, products or more to selected end-users or end-user segments. Discounts should rarely be a constant percentage, for example. B 2% on all income. A constant percentage runs the risk of misinterpretation as a rebate. Paying different discount rates or amounts for different product families and segments allows the seller to use the discounts as a strategic lever and improve the product range. „Dear Jane, think you`re fine. We are pleased to send you the 2015 tender. Over the past year, we have delivered more than 60,000 OSA TEUs goods, moves and related items worldwide.

The raw materials of the OSA are light goods, about 3 tons by 20 ft and 7 tons for 40 ft. Our peak season is your low season. Our tender includes global maritime freight rates as well as UK domestic transport. The year of the contract begins on March 1, 2015 and ends on February 28, 2016. Our most important transactions with volume in recent years (and indicating the potential volume) are: (specification of TEU by trade route). OSA denies guaranteeing MOLE a load volume. The above text of the email contains a warranty, according to MOLE. Therefore, the Court finds that MOLE agrees with the text.

The question is whether the text implies an obligation for OSA and, if so, what kind of obligation. The doctrine of trust applies and it is not the interpretation of the treaty, since that guarantee is not part of the agreement. In many cases, a manufacturer may have volume, mix and growth reductions with the distributor, have volume discounts with the end user, and pay Ship-Debit fees on the same transactions. The net price of these sales would be calculated minus all discounts. A better understanding of the different types of interest agreements – as they are structured and calculated – can benefit the management of your company`s discount. In our experience with companies that manage complex discount agreements, we have encountered different types of discounts. Some of these transactions are more self-explanatory, such as a fixed amount of money or a fixed percentage of total revenue over the life of the agreement. A volume reduction agreement could for example.B. Incentive goals of: You can or can currently act in these types of discounts, but a better understanding of how they work and why they exist can help improve your discount management processes and inform you on the way to trading.