Base point pricing
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Base point pricing is an economics term used to describe the system of firms setting prices of their goods the same to all buyers regardless of the sellers location, even if their transportation costs to the locations are different.
This means that if the destinations are far apart and have considerably different costs of transportation, each will still be charged the same price.
Although some consider this a form of collusion between the selling firms (it lowers the ability of buying firms to gain a competitive advantage by location or private transportation), it is common practice in the steel and automotive industries.
[edit] Types
- Point Pricing (-5 to +5 range)
- Rebate Pricing (-5 to +5 range)
- Bond Pricing (+95 to +105 range)
[edit] See also
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