What are subject to trade discounts?

Trade discounts are typically offered by manufacturers or wholesalers to retailers and distributors as an incentive to buy in bulk or to encourage loyalty. These discounts are applied to the list price of products and are not usually reflected in the invoice; instead, they reduce the initial price before any sales tax is calculated. Commonly, trade discounts apply to various goods, including electronics, clothing, and industrial equipment, and may vary based on the buyer's purchase volume or business relationship.