A manufacture sells to a retailer at a certain price unit point and beyond that point you give them a discount because they are buying in bulk. For instance, hairdressers can go to the manufacturer to get a discount for buying in bulk. They can get shampoos and other hair products at a cheaper rate and sell them to consumers at full prices. Manufacturers with the best trade allowances will get the best displays in the hair salon.
Source: Boundless. “Trade Allowances.” Boundless Marketing. Boundless, 20 Sep. 2016. Retrieved 27 Oct. 2016 from https://www.boundless.com/marketing/textbooks/boundless-marketing-textbook/personal-selling-and-sales-promotion-14/promotion-methods-in-trade-sales-97/trade-allowances-478-7300/