What is channel stuffing?
A)A company records revenue before delivery terms can be arranged.
B)A company records revenue on goods that will be shipped overseas.
C)A company induces distributors to buy substantially more inventory than they can promptly resell.
D)A company alters the terms and conditions of recorded sales to entice customers to accept delivery of goods.

Question

Quizplus · Accepted Answer

Channel stuffing occurs when a company induces distributors to buy significantly more inventory than they can promptly resell. The goal is to artificially boost sales and revenue figures in the short-term, even though there may be little or no real demand for the excess inventory. This can lead to financial difficulties down the line if the excess inventory cannot be sold or if customers return the products. Options A, B, and D are not accurate descriptions of channel stuffing.

What Is Channel Stuffing