Shipping terms are also negotiated. Invoices specify something like "FOB shipping point.” FOB means "Free On Board,' which means the manufacturer takes responsibility up to the shipping point. At that point, the buyer assumes responsibility for the merchandise, damages, losses, and freight costs. CIF (Cash, Insurance, Freight) terms mean the manufacturer pays all the costs of delivery and the buyer does not assume responsibility for the merchandise until it reaches the store, warehouse, or distribution center.
Many other terms might be negotiated in a purchase contract. A manufacturer may establish minimum order quantitiesminimum areas for display in the store. They may also require special fixtures and merchandising techniques. A buyer may negotiate for markdown allowances on goods that do not sell by a certain time in the selling season. Some buyers want guarantees of refunds on damaged or defective goods. Other buyers want guarantees of shipping dates and discounts on late shipments. Some manufacturers provide inducements to retail buyers, such as free or cooperative advertising, point of purchase displays, special goods for price promotion, and offers of free goods. "Push money” or prize money allowances are sometimes given to retailers to pass on to retail sales people in return for aggressive selling of particular items or fines. These funds may also be used to support sales contests or commissions. and
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