Bulk discount is the selling method in which the seller gives discount prices to encourage the purchase of goods in large quantities. When buyers make a purchase for a product in a large enough quantity at once, they can enjoy a reduced price for each group of goods purchased.

Bulk discount is most commonly used in multiple-product stores that offer customers a set of products such as holiday gift sets, travel kits, decoration sets, and family clothing sets.

How To Offer Bulk Discount?

1. Tiering (or setting different tiers)

Tiering is the most popular way to offer bulk discounts. In this method, the sellers set several tiers for buying quantity; each has a different discount rate. A specific discount rate is applied for a given number of units falling under that tier. The more customers buy, the higher the discount rate they get. 

For instance, for a bulk investment of Product X, a 5% reduced cost will be applied to the tier of 5-10 units. As the tier changes to 11-50 units sold, a larger discount is applied, 10% for example.

2. Setting a threshold

With this selling technique, buyers can only get lower prices or higher discounts if they purchase over a predetermined volume. For instance, a volume discount may not be applicable until the customer purchases at least 10 units of a product.

It means that the reduced price rate will only apply to the 11th product purchased. The buyer still needs to pay the original price for the first 10 items.

3. Pricing uniquely for packages of units

In this last method of structuring volume discounts, reduced prices will only be offered in certain packages of units. Take Good X for example, a discount rate of 5% may be applied to every package of 5 units, and a 10% discount may apply to purchasers of every 10 units.

Thus, to reap the maximum benefits of the discount, the buyer would need to buy in batches of 10 rather than batches of 5. If the buyer buys 17 units of X, 10% discount only applies for 10 units of X, 5% applies for 5 units, and the remaining 2 items will have the original price.