Distributors, Rebates and Fraud

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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

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