pirate

🦜☠️ Account Executive

Reps doing vertical price fixing...

So I came across a few reps in my organisation doing some pretty hefty vertical price fixing. Top performers too. The way they put it made so much sense and hey great deals, relationships, quota crushing... but really it just seems pretty illegal to do. They stay in their bubbles, never share about their wins, management covers for them. I now wonder if it's common practice but not promoted in organisations? I wouldn't do it. Then I wonder if I should flag it to someone because it seems pretty unfair. Any experiences?

👑 Sales Strategy

⚖️ Legal

16 comments

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Revenue_Rambo

Politicker

Director, Revenue Enablement

What exactly do you mean by price fixing?

pirate

Big Shot

🦜☠️ Account Executive

So they dictate the prices of the whole supply chain from us to distribution to reseller to customer

Kosta_Konfucius

Politicker

Sales Rep

Do they have a set price for each vertical they sell to? Can you explain the situation more and why it's unfair?

pirate

Big Shot

🦜☠️ Account Executive

We sell to distribution, distribution sells to reseller. Reseller sells to the customer. Reseller and distribution are given a margin from our price. Some reps fix the margins. It's dictating to the channel at what price they sell instead of allowing them to take a reasonable percentage of the margin

Phillip_J_Fry

Opinionated

Director of Revenue

If distro/reseller are happy with their margin, then why mess with it?

RealPatrickBateman

Politicker

🔪Amateur Butcher🔪

We used to call this "Margin Shaving" or "Margin Pushing". It's more common than you think.

Your reps may be (and most likely ARE) getting points off the deal for themselves.

pirate

Big Shot

🦜☠️ Account Executive

So how would it work then?

Diablo

Politicker

Sr. AE

Why it’s illegal? Is is documented somewhere?

pirate

Big Shot

🦜☠️ Account Executive

As far as I understand, it's essentially like a side letter, something outside the contract/PO itself

Diablo

Politicker

Sr. AE

Got it, if it’s in the PO then it’s really bad, no integrity at all. How is the company allowing this lol

CuriousFox

WR Officer

🦊

Is it the reps making up pricing or are buying group contracts being used?

pirate

Big Shot

🦜☠️ Account Executive

We have list prices and have reps who are dictating the margin % instead of allowing distribution and reseller to make that decision.

CuriousFox

WR Officer

🦊

Grey area.

GDO

Politicker

BDM

what do you mean by vertical price fixing? If they are discriminating on price between verticals/clients i dont se a problem tbh.

pirate

Big Shot

🦜☠️ Account Executive

We sell to distribution and reseller and they sell to customer. Disti and reseller get a margin range. Basically it's reps dictating price at every level and dictating what margin specifically to take

Beans

Big Shot

Enterprise Account Executive

I've inflated numbers before knowing the needs/pains and budget. At the end of the day we're selling value not product.

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pirate

Reps doing vertical price fixing...

16 comments

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