What is the primary purpose of a cumulative quantity discount?

The primary purpose of a cumulative quantity discount is to encourage repeat orders. This type of discount is structured to reward customers for their ongoing business over a specified period of time. By offering discounts based on the total quantity purchased over multiple transactions, businesses aim to build customer loyalty and incentivize them to continue buying from the company rather than seeking alternative suppliers.

This approach not only helps increase the overall volume of sales but also fosters a stronger relationship between the business and its customers, as customers who feel rewarded for their loyalty are more likely to return for future purchases. Thus, the cumulative quantity discount effectively aligns the interests of the seller and the buyer, promoting sustained engagement and repeat business.