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Manufacturer Chargeback (MCB)
Definition
A reimbursement paid by a manufacturer to a wholesaler or distributor when the wholesaler sells a product to a retailer or customer at a lower contract price. Chargebacks occur when the wholesaler initially purchased the product at a higher list price, and the manufacturer compensates the difference to honor agreed pricing programs.
How It's Calculated
Difference between the wholesaler’s purchase price and the contract (or promoted) price paid by the retailer or end customer.
Example
A beverage distributor buys cases of soda from the manufacturer at $8 each but sells them to a retailer under a $6 promotional contract. The manufacturer issues a $2 per case chargeback to the distributor to offset the price difference.
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