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Forward Buying
Definition
A purchasing practice in which retailers or distributors buy larger quantities of product than needed for immediate sale, typically to take advantage of temporary price reductions or trade allowances. Forward buying allows buyers to stock up at a lower cost and sell inventory later at higher margins.
How It's Calculated
Example
A retailer purchases several months’ worth of a beverage brand during a deep promotional discount, then sells through that inventory after the promotion ends at regular retail pricing.
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