, Subject= "Purchasing Managers' Insanity" | Purchasing Managers' Lunacy... | rev 04.15.2008 | Back to BluntConsuting Home |
So far, this isn't rocket science, right ?
We paid for a study to survey Purchasing Managers' attitudes in Europe and the United States.
The responses blew my mind.
A very large percentage of the purchasing people preferred a large discount on an item to a lower net price!
Do you understand what that means?!
Here's what that means in real life:
If my company offered a product at $100 list price and a 40% discount, the customer buys it at a net price = $60.00.
[math solution provided for NAPM members....]
If we were to try to sell the same product at a $80.00 list price and a 28% discount, Purchasing Managers would be less likely to buy it ! [note to NAPM members: net price = $57.60]
Help me understand this!
It looks like the purchasing agent who gets the widget for the 40% discount instead of 28% gets a bigger reward for getting the higher discount.
The purchasing agent down the hall gets punished for trying to cut a deal on the same widget for a net price of $57.60, because the discount (28% off $80.00) is less than 40% off $100 !
Are these guys from Pluto, or what?!
So, if you're a Purchasing Manager (or the CIO or CFO of those companies), please email me and explain why you do this. Thank you!
ps.
This situation tended to be worse in Japan than in Europe or the US!
Can anyone afford to lose that money in today's economic situation?!
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, Subject= "Purchasing Managers' Insanity" |