A retailer might expect a stocking allowance:
A) for paying the supplier's invoice before the product is delivered.
B) to pass along to retail salesclerks who aggressively sell the product.
C) to offset the handling costs for a new product.
D) if the manufacturer can't fill an order by the promised delivery date.
E) None of the above--stocking allowances only apply to wholesalers.

Question

Quizplus · Accepted Answer

A stocking allowance is a fee paid by a manufacturer to a retailer to offset the costs associated with adding a new product to their inventory, including handling and storage costs. Therefore, option C accurately represents the purpose of a stocking allowance. Option A refers to early-payment discounts, option B refers to sales incentives, and option D refers to penalties for late deliveries. Option E is incorrect because stocking allowances can apply to both wholesalers and retailers.

A Retailer Might Expect a Stocking Allowance