FOC Meaning

FOC stands for Free of Charge: goods supplied to a customer without payment, most commonly the free units in a quantity trade scheme, but also samples, display stock or replacements for damaged goods.

About 9.1%, not 10%. The free unit spreads across the eleven units actually received rather than the ten paid for. Distributors who cost such schemes at 10% consistently under-recover across large volumes.

It depends on structure. For genuinely free supplies such as samples, input tax credit attributable to those goods generally has to be reversed. Where free units appear on the same tax invoice as paid units, the transaction is commonly treated as a discounted supply of the total quantity.

Because free goods carry no invoice value but full inventory cost. If the claim against the brand is rejected or filed late, the distributor absorbs the whole amount. Most distributors track what they claimed but not what they actually issued, and the gap is pure loss.

No. Including free units in volume achievement inflates apparent performance and distorts every per-unit metric downstream. FOC should be booked as scheme spend.