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May 15, 2009 at 07:00 AM

Back up discounts from Vendors in consignment purchase


A retailer purchases stock on consignment from a vendor before the start of the season

During the season , for slow moving stock the retailer enters into a markdown arrangement with the vendor where for specific SKU the retailer marks down the price by certain percentage which is shared with the vendor.

For example: If for sports sweat shirt for the XXL sizes the retailer wants to offer a 50 % discount on the product . Of this discount 25% will be shared by the vendor/manufacturer.

During the settlement of the vendor's liability this additional discount needs to be reduced from the vendor payables.

How can this be managed .

Could someone please help