We had a little fun here at Next Level Purchasing recently when pursuing a new contract for our office supplies.
Of course, we like to think of ourselves as experts at sourcing due to the fact that we teach purchasing professionals in over 100 countries how to conduct sourcing. But we don’t tell our competing vendors that – we play more of a “mystery shopper” role.
During this particular sourcing process, we uncovered some interesting things that we’ll be addressing in a multi-part series here on the Purchasing Certification Blog. Today, we’ll focus on one “dirty trick.” For lack of an existing phrase, I’ll call this the “Phantom Leverage” technique.
The Phantom Leverage technique is when an office supply vendor establishes a relationship with an organization that has customers or members of its own. The organization then offers its customers or members a “special discount” with the office supply vendor.
The intended perception this creates is that each customer or member is getting a better deal that it would be able to get on its own. After all, if you have the buying power of, say, 1,000 companies, it’s only natural that you’ll get a better deal, right?
Just like we found when sourcing health care benefits, it was relatively easy to get a better deal on our own. Actually, the office supply vendor who had this deal with a chamber of commerce that we belong to charged more than we were currently paying for our supplies!
So beware of the Phantom Leverage trick. From what we’ve seen, you rarely do better than what you’d do on your own.
Is there time savings? Sure, but unless you work for the smallest of small companies, the time spent will have a return on investment.
While we’ll be publishing Whitepaper Wednesday tomorrow, check back Thursday for the next installment in this series.
To Your Career,
Charles Dominick, SPSM
President & Chief Procurement Officer
Next Level Purchasing, Inc.
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