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
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