Add-On Sale

AAA

DEFINITION of 'Add-On Sale'

A sale of additional goods or services to a buyer. Depending on the business, add-on sales may represent a source of significant revenues and profits to a company. An add-on sale is generally suggested by the salesperson once the buyer has made a firm decision to buy the core product or service. Sometimes known as "upselling."

INVESTOPEDIA EXPLAINS 'Add-On Sale'

Typical examples of add-on sales are the extended warranties offered by sellers of household appliances such as refrigerators and washing machines, as well as electronics. Automobile dealerships are another generator of substantial add-on sales that make a significant contribution to the top and bottom line. Once a car buyer has committed to buying the base model, adding on all the bells and whistles can substantially boost the final purchase price.

RELATED TERMS
  1. Adaptive Selling

    A selling strategy in which the way a product or service is presented ...
  2. Suggestive Selling

    A sales technique where the employee asks the customer if they ...
  3. Over-Selling

    This occurs when a salesperson continues their sales pitch after ...
  4. Tied Selling

    The illegal practice of a company providing a product or service ...
  5. Layaway

    A purchasing method that allows a consumer to put a product on ...
  6. Occupational Safety And Health ...

    Law passed in 1970 to encourage safer workplace conditions in ...
RELATED FAQS
  1. What's the difference between bottom-line and top-line growth?

    A company's bottom line is its net income, or the "bottom" figure on a company's income statement. More specifically, the ... Read Full Answer >>
Related Articles
  1. Fundamental Analysis

    Great Expectations: Forecasting Sales Growth

    Predicting sales growth can be something of a black art, unless you ask the right questions.
  2. Markets

    Consumer Spending As A Market Indicator

    What people buy and where they shop can provide valuable information about the economy.
  3. Fundamental Analysis

    Analyzing Retail Stocks

    To analyze retail stocks, investors need to be aware of the most common metrics used. Find out what they are.
  4. Options & Futures

    Car Shopping: New Or Used?

    Don't get taken for a ride. Learn the pros and cons before the salesperson makes a pitch.
  5. Economics

    What is Value Added?

    Value added is used to describe instances where a firm takes a product and adds a feature that gives customers a greater sense of value.
  6. Economics

    What is a Wholly Owned Subsidiary?

    A company whose common stock is 100% owned by another company, called the parent company.
  7. Economics

    What is the Breakeven Point?

    In general, when gains or revenue earned equals the money spent to earn the gains or revenue, you’ve hit the breakeven point.
  8. Investing

    What's Marginal Revenue?

    In microeconomics, marginal revenue is the additional revenue generated by increasing sales revenue by one unit. Another way of saying this is that the marginal revenue is the revenue generated ...
  9. Investing

    What is the Debt-To-Capital Ratio?

    The debt-to-capital ratio is used to measure a company’s use of financial leverage. The ratio is the company’s total debt, divided by the sum of the company’s equity plus total debt.
  10. Investing

    Understanding Accumulated Depreciation

    Depreciation is a rough approximation, in dollar terms, of the wear and tear on an asset. So the accumulated depreciation is the aggregate of the wear and tear on the asset from all prior time ...

You May Also Like

Hot Definitions
  1. Price-To-Sales Ratio - PSR

    A valuation ratio that compares a company’s stock price to its revenues. The price-to-sales ratio is an indicator of the ...
  2. Hurdle Rate

    The minimum rate of return on a project or investment required by a manager or investor. In order to compensate for risk, ...
  3. Market Value

    The price an asset would fetch in the marketplace. Market value is also commonly used to refer to the market capitalization ...
  4. Preference Shares

    Company stock with dividends that are paid to shareholders before common stock dividends are paid out. In the event of a ...
  5. Accrued Interest

    1. A term used to describe an accrual accounting method when interest that is either payable or receivable has been recognized, ...
  6. Absorption Costing

    A managerial accounting cost method of expensing all costs associated with manufacturing a particular product. Absorption ...
Trading Center