Dictionary of Marketing Terms: factory pricing
factory pricing
prices that are discounted to compensate the buyer for the cost of transportation from the seller's place of business to the buyer's. Factory pricing saves the seller from the expense and management of shipping and places the risk of loss during transport to the buyer. Marketers who are located close to their customers can better afford to sell with factory pricing than marketers who are located at a greater distance. For example, a metal bed frame manufacturer who sells a relatively heavy weight product at a low price could not compensate for the cost of transportation to a customer in a distant location.
