The Real Maverick … And How Distributors Can Benefit from It

If you secure business via contracts, either as a distributor or a manufacturer, you know that maverick buying, on behalf of the end-user, can be the bane of a contract.

Maverick buying is when purchasers within the end-user, who are supposed to purchase through an authorized source, decide to purchase outside the contract. This “purchase leakage” can be very profitable for non-contract holders and also be the reason why contracts are eventually not renewed.

This type of buying is very common in national / strategic accounts and sole-source agreements. There was a time years ago that WESCO reportedly only had 30% contract compliance. Or consider when a national chain has an MRO contract but does not have access to Rockwell. Do you think the Rockwell distributor only wants to sell Rockwell material and that the salesperson never asks for any other business?

In the current market environment, perfecting sales techniques to encourage maverick buying can be a viable growth strategy for companies that do not have the contract. End-users may actually be open to it as they may think it saves their company money (from a budget perspective it probably does) as the non-contract holder may offer a lower price. Plus, it may be rewarding salespeople that the end-user likes.

Likewise, companies that do hold the contracts have an opportunity to reinforce why their argument of a lower total cost of procurement is more important, especially when staff may be laid off and equipment needs to keep running (plus there may be less paperwork and other contractual benefits.)

Regardless of which side benefits, maverick buying can benefit a distributor. And whom better to discuss maverick buying than the end-users who benefit, or suffer, from it.

On November 5, Purchasing magazine will be hosting a webinar on this subject. If you write sole source / national account / key account contracts (or participate in one – i.e. SupplyForce, VNA and Vantage distributors), you may want to attend. Click here to register.

In tough times, sometimes you need to be creative to take business.

What is your experience with maverick purchasing?