What do you mean by allowance ? Explain its types.

1.	What do you mean by allowance ? Explain its types.
Answer» Allowance is a compensation in cash or kind given to the dealer for providing certain services from the manufacturer. Main allowances are: Purchase allowance : It is given to the trader on purchase of certain quantity of goods within a given period of time from the manufacturers. Advertising allowance : It means compensating the dealer for advertisement expenditure incurred by him for the product. Display allowance : It compensates the retailer for arranging special display of manufacturer’s product. Shelf space allowance : For compensating the dealer for giving a special shelf space to the manufacturer’s brand.

Answer»

Allowance is a compensation in cash or kind given to the dealer for providing certain services from the manufacturer.

Main allowances are:

It is given to the trader on purchase of certain quantity of goods within a given period of time from the manufacturers.

It means compensating the dealer for advertisement expenditure incurred by him for the product.

It compensates the retailer for arranging special display of manufacturer’s product.

For compensating the dealer for giving a special shelf space to the manufacturer’s brand.

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