: It prevents retailers from drastically discounting (dumping) excess stock, which could otherwise hurt a brand's premium image or price integrity.
Offering a buy-back allowance signals a manufacturer's confidence in their product and a commitment to a long-term partnership with the distributor. Practical Application buy back allowance
: It encourages retailers to keep shelves fully stocked, as they know they have an "exit strategy" for unsold items. Relationship Building : buy back allowance