Legal Definitions - trade price

Definition: Trade price refers to the price at which goods or services are sold to retailers or other businesses, rather than to individual consumers. It is often lower than the retail price, as businesses buying in bulk can negotiate better deals with suppliers.

Example: A manufacturer of clothing may sell their products to a retailer at a trade price of $20 per item, while the retailer then sells the same item to individual customers at a retail price of $40. The trade price allows the retailer to make a profit while still offering a competitive price to customers.

Another example: A restaurant may purchase ingredients from a supplier at a trade price, allowing them to keep their costs low and offer affordable menu items to customers.

The examples illustrate how trade price is a pricing strategy used in business-to-business transactions, allowing businesses to purchase goods or services at a lower cost and then sell them at a higher price to make a profit.