Sunday, August 7, 2011

Distributors, Rebates and Fraud

3M sues distributor for $2.5 M in falsified rebate claims

In an environment where large orders often require special pricing and distributors and their supply partners agressively compete for business, special prices abound.
In some wholesale trades, over half of the business is sold with some type of manufacturer pricing support. These come in the form of rebates, ship and debit programs and special pricing agreements (SPA's).

This isn't just a distributor claim. The rumor mill abounds with stories of local manufacturer sales teams encouraging their distributors to "add that order to the Acme Widget account SPA" to cover a special price need. Sometimes they do it for the right reasons - but the policy is gray at best and "shady" at its worst. Salespeople who are paid on Gross Margin see the practice as a tool to enhance their commission check.

The answer is a well thought out policy. Simple to administer and easy to audit.

Read the article here

Tuesday, April 5, 2011

Distributor Business Systems to Merge

In a move that will surely affect wholesale distribution, two of the major players in the business system software industry will be merged under a new investor group.

For the past several years, there has been a great deal of chatter amongst distributors based on their software providers apparent need to generate additional revenues. There is a shift in the model being used to sell distributors. It might be justified and it might be reasonable, but sometimes the way it is done seems heavy handed to some wholesalers.

Here is the press clip from ZDnet:

Private equity firm buys Epicor, Activant
Jason Ng, ZDNet Asia on April 5th, 2011 (3 hours 6 minutes ago)

A private equity firm has acquired Epicor Software and Activant Solutions, with plans to merge the two software companies into one of the world's largest enterprise application vendors.

In a statement Monday, Apax Partners said the two acquisitions have a combined value of US$2 billion. The merged entity is expected to become one of the biggest global providers of enterprise applications focused on the manufacturing, distribution, services and retail sectors--with over 30,000 customers and US$825 million in annual revenues. It will be named Epicor Software Corporation and become a privately held company.
Read the whole thing here: