The rebate that chose your product mix

A retrospective supplier rebate is not a discount. It is a step function, and once you are near the step, it starts making buying decisions that nobody in the business has approved.

By Steve 5 min read
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Most businesses that buy through distribution have at least one retrospective rebate: hit an annual volume with a supplier and a percentage comes back on everything you bought. It usually feels like a win. It was negotiated by someone competent, it arrives as a lump of margin at year end, and it costs nothing to hold. The problem is not the rebate. It is that a retrospective rebate changes the shape of your cost curve, and almost nobody re-examines their buying, selling and stocking behaviour once the shape has changed.…

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Important: General information only. Rialto Bridge articles describe patterns and considerations that may apply to a business; they are not financial, legal, tax or accounting advice, and they take no account of your particular circumstances. Consider your own situation and seek advice from a qualified professional before acting.

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