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merchandise from the vendor, if necessary, and filled the order
on the date requested by the member store. Petitioner invoiced
the member store for the shipment, reflecting on the invoice
credit for the appropriate amount of show money if, and only if,
that amount had not already been paid by the vendor to the member
store.
A member store had discretion not to receive show money in
currency or by check from a vendor who had elected to offer show
money that way. A member store had no discretion, however, to
demand a payment from a vendor if the vendor had elected the off-
invoice method of offering show money.
Petitioner’s Profit on Sales to Member Stores
Petitioner profits on sales to member stores by marking up
the prices it charges member stores from the prices it pays
vendors. Except with respect to off-invoice discounts resulting
from show money offered at the food shows, petitioner applies its
customary markup to the price it charges a member store; i.e.,
the markup is applied to the vendor’s list price less the usual
discount obtained by petitioner. With respect to show money,
petitioner applies any off-invoice discount only after adding its
own markup. Thus, petitioner calculates that its margin (the
difference between the cost and selling price) and its markup on
food show orders are the same if a member store receives show
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Last modified: November 10, 2007