Fair Selling

If you are selling products to the retail or wholesale trade, you need to sell on equal terms to outlets that may be deemed to be competing with each other, unless you can economically justify different terms.

A clear economic justification may be that one store pays cash in advance for your product, while another store retains the right to return unsold goods to you after a period of time. One store may require that your product be individually boxed. High volume can be a basis for a deeper discount if it can be economically justified. You must be able to show that the higher volume actually lowers your cost of doing business.

Not only must pricing be nondiscriminatory, but other terms of the sale must be equal as well. Those terms may include payment method, advertising allowances, and freight allowances.

The main concern of the courts is that larger retailers and wholesalers may be demanding and getting better terms than their smaller rivals without any cost justification.

By Source Streetwise Small Business Start-Up


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