question archive Why would a retailer offer customers sales discounts? Which of the following credit terms would be more generous to your customers: n/30 or n/eom?
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Why would a retailer offer customers sales discounts?
Which of the following credit terms would be more generous to your customers: n/30 or n/eom?
It is to earn sales faster.
n/30
Step-by-step explanation
Retailers often get their products at a lower price when they buy it in bulks from their suppliers. It won't hurt them financially when they offer discounts to their customers. Discounts are used to entice people to buy their products, thus, earning sales faster. Discounts are used by many as a marketing tool.
n/30 means payment be made within 30 days. n/eom means you need to pay at the end of the month. N/30 would be more generous to the customer since they are given 30 days to pay. However, if n/eom, no matter what date you bought the products, you need to pay for it at the end of the month. To which I think is giving the customer lesser days compared to n/30. Unless you bought it on the very first date of the month, then that would make them equal when it comes to the number of days.