Preventing you from sourcing. That\u2019s the goal of many suppliers. And, as you learned in Part I of this series, using the Phantom Leverage technique is one way that suppliers try to convince you to forsake the sourcing process and just choose them.<\/p>\n
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The ammunition behind sourcing dissuasion is the perception of a good deal that suppliers try to create. In our recent office supplies sourcing initiative here, we refamiliarized ourselves with another \u201cdirty trick\u201d that suppliers use as a dissuasion method. We\u2019ll call this one the \u201cCar Mirror Discount.\u201d<\/p>\n
You know how car side mirrors often say something like \u201cObjects in mirror are closer than they appear?\u201d Well, we find that a twist on this statement applies to discounts quoted by office supply vendors: \u201cDiscounted prices are closer to the standard price than we lead you to believe.\u201d<\/p>\n
We\u2019ve seen suppliers offer 70% discounts. Sounds good, doesn\u2019t it?<\/p>\n
Well, it does until you find out what price that discount is taken from.<\/p>\n
Let me ask you this: If you were going to buy a ream of generic copy & printer paper advertised at a 70% discount, how much would you be willing to pay?<\/p>\n
A dollar or so?<\/p>\n
$1.50 at the most, right?<\/p>\n
That would be if the 70% was deducted from the price that the average Joe would pay when buying paper at the store or on a retail Web site \u2013 $4 to $5. But the store\/Web price isn\u2019t the baseline price against which the discounted price is compared.<\/p>\n
What is the baseline price from which the discount is taken?<\/p>\n
$14.98.<\/p>\n
Yep. A fifteen-dollar ream of paper.<\/p>\n
Who on God\u2019s green earth would ever pay 15 bucks for a ream of generic copy paper?<\/p>\n
Still feel good about that 70% discount?<\/p>\n
I didn\u2019t think so. That\u2019s the \u201cCar Mirror Discount.\u201d<\/p>\n
This series will continue with Part III tomorrow (April 3, 2009). You\u2019ll learn how we selected our new office supplies vendor.<\/p>\n
And there is an interesting twist to the story. So be sure to check back!<\/p>\n","protected":false},"excerpt":{"rendered":"
Preventing you from sourcing. That\u2019s the goal of many suppliers. […]<\/p>\n","protected":false},"author":12,"featured_media":4007,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-2634","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-procurement"],"yoast_head":"\n