Forward buying is a retail practice of purchasing more inventory than immediately needed to take advantage of special discounts or trade allowances, thereby aiming to increase profits.
A trade allowance is a producer discount given to distributors or retailers as a promotional effort to encourage sales. Retailers pass along the discount to the consumer, which promotes higher sales volumes. Though it can reduce producer profits, this practice is widely followed in many industries.
Trade promotion refers to marketing efforts directed at retailers, distributors, or wholesalers to boost product sales and increase distribution. These promotions often involve special pricing, display allowances, or additional marketing support.
