Dealer incentive

Dealer incentive,

Definition of Dealer incentive:

  1. A dealer incentive is a financial inducement used by manufacturers to motivate dealers to sell a particular product by offering discounts on that product. Generally, this corporate sales strategy involves a reduction in the cost a dealer pays to acquire an item from a manufacturer, which increases the dealer's profit upon sale of that item. A dealer incentive may also take the form of a cash payment to a dealer for the sale of a specific item, or a cash incentive, such as a rebate, that is awarded directly to the consumer. Dealer incentives are most often used by auto manufacturers, but may also be employed by other types of brokers or resellers.

  2. Dealer incentives are widely used in car sales so the practices of dealers and manufacturers provide the best examples. In general, though, dealer incentives are used by companies to motivate salespeople, such as cash incentives paid to a salesperson for the sale of a particular model of car. They allow manufacturers to cut the costs of making sales, enable the capture market share, and help with the launch and promotion of new products or models by tying pay to performance.

  3. A financial inducement offered by a car manufacturer to dealers on a regional basis that reduce the dealers actual cost to purchase the vehicle from the factory. Typically applied to slow-moving stock after initial sales objectives have been met.

Meaning of Dealer incentive & Dealer incentive Definition