Legal Definitions - trade price

Trade price refers to the price at which goods or services are sold by one business to another business, typically for resale, for incorporation into their own products, or for use in their business operations, rather than to an individual end consumer. This price is often a wholesale or discounted rate compared to the retail price that an individual customer would pay.

• Example 1: Manufacturer to Retailer

  A company that manufactures artisanal soaps sells a bulk order of 200 bars to a small gift shop. The price per bar that the gift shop pays to the manufacturer is the trade price.

  This illustrates the trade price because the transaction is between two businesses (the manufacturer and the gift shop), and the gift shop intends to resell the soaps to its own customers, not use them personally.

• Example 2: Wholesaler to Restaurant

  A large food distributor supplies crates of fresh produce and specialty ingredients to a chain of local restaurants. The agreed-upon price per crate or unit that the restaurants pay the distributor is the trade price.

  Here, the food distributor is selling to another business (the restaurant chain) which will use the ingredients to prepare meals for individual consumers. The price at this business-to-business level is the trade price.

• Example 3: Supplier to Contractor

  A plumbing supply company sells a large quantity of pipes, fixtures, and fittings to a general contractor who is building a new residential complex. The price paid by the general contractor for these materials is the trade price.

  In this scenario, the plumbing supply company is selling to another business (the general contractor) for use in their construction project. The contractor is not the end consumer of the individual pipes but incorporates them into a larger product (the building) for sale. This business-to-business transaction price is considered the trade price.