Plasma Glossary

There are several key terms we use in Plasma to refer to Plasma Waterfall components. It is important for you to understand what we mean by them and below you can find a glossary of the most commonly used terms and their definitions. These terms are standard components for all industries and the definitions are widely accepted.

Term

Definition 

Competitive discounts

A discretionary discount negotiated before the order is taken due to perceived market competition.

Consignment costs

The cost of funds when a supplier provides consigned inventory to a retailer or wholesaler.

Customer negotiated discounts

Discretionary customer level discount offered by sales (Can be order specific or long term, i.e. contract)

Customer pick-up allowance

A credit offered by the retailer/distributor on the condition that the customer picks up their product; sharing in the cost savings gained from no shipping.

Customer-charge: Customization

Additional charge for the customer for the incremental price of a nonstandard order.

Customer-charge: Freight

Freight charge for the customer for transportation of goods.

Customer-charge: Installation

Fee charged to the customer for the installation of the product.

Early payment discounts

Discount negotiated for early payment. Early payment is relative to payment terms.

End-customer discounts

Discount for end-customer rather than retailer/distributor.

Foreign exchange adjustment

The value of the cumulative adjustment of international operational activity into functional currency.

Free giveaways

Giveaways offered to customers to encourage use/testing of products or expand sales from existing customers.

Free/ expedited shipping

100% discount to shipping charge, absorbing incremental cost between standard and quicker delivery of products.

Freight

The suppliers cost of transporting goods to a customer.

Installation costs

All costs to install products, including transportation and labor costs.

Instant rebates

Rebates given before the invoice price at the time of purchase.

Inventory maintenance

Costs associated with periodic inventory audits and inventory control.

Labor

Wages for employees directly involved in manufacturing a product

Local/ Regional adjustments

Adjustments to list price for local costs, regional customer preferences, market competitiveness.

Marketing/ market development promotions

A discount to promote sales to a specific market segment; can be a combination of multiple segment attributes such as territory, channel or product.

Non-standard orders/ customization costs

Incremental cost associated with manufacturing and delivering a nonstandard order.

Other COGS

Other direct variable costs required to produce a product including product development, etc.

Other transaction costs

Other  indirect costs incurred to enable a transaction

Other/on/off - invoice promotions

A marketing incentive during a specific promotional time.

Performance guarantees/ basic terms/ warranty

The cost to maintain, replace, or repair products for a certain amount of time.

Production

The cost to manufacture a product

Quick- cash payment discounts

A deduction from the invoice price if payment is made quickly or with cash versus credit.

Raw materials

The cost of the materials used to manufacture a product

Rebates

Refunds given to reward customer loyalty; often requires action by customer post purchase to obtain and typically a certain threshold needs to be met.

Receivables carrying/ late payment costs

The cost of funds from the moment an invoice is sent until payment is received. Cost of funds incurred by retailer or distributor when customer payment is made after the agreed upon due date.

Rush orders

Higher cost associated with filling and transporting orders more quickly than standard.

Sales channel discount

Discounts offered to a specific sales channel that differs from that of another channel.

Seasonal discounts

Discounts offered during a specific period of time. Discounts can be to the entire product portfolio or a subset.

Shrinkage/ returns/ corrections

Cost of defective or damaged products sent to the customer.

Slotting allowance

An allowance usually paid as a percentage of sales to support local advertising of a manufacturer's brand.

Stocking allowance

A discount paid to retailers or wholesalers to make large purchases into inventory, often just before a seasonal increase in demand.

Support and service costs

Costs incurred by retailer or distributor to execute the transaction with the customer.

Trade spend

Allows the retailer to discount from (MSRP) manufacturer's suggested retail price.

Volume discounts

A discount offered to a customer to reward the buying in bulk behavior.