Throughout the year, Masha showed high results at the end of each month, and in January, a fiasco suddenly occurred. Following the drop in sales, she was even deducted, although before that, no one in the department could surpass the girl.
The management assumed that everyone should work on equal terms and that compromises were unacceptable. It sounds convincing, and besides, we don’t have a full understanding of the company’s business. And then Masha quit and moved to another job the following May.
So for customers, the discount becomes a normal thing; they no longer view it as a concession and believe that for previous successes you should constantly bring them benefits.
By offering a discount for the size of a single vietnam telegram shipment, you are going against modern management principles that reject the accumulation of large inventories in the warehouse.
So, firstly, you can give a retro bonus as a discount for the volume of the purchase, only in a different wording. Schmidt makes the following proposal to his most important client:
- As I may have noticed, you are now taking three tons a month from me, while before you took ten. At the same time, your business has not suffered. On the contrary, I have modernized, updated the equipment and now have the opportunity to reduce the price for you. We will compensate you five percent of the monthly purchase volume if our deliveries exceed eight tons.
Secondly, to launch a new, more expensive product, contrary to established norms, Schmidt will also need a retro bonus. Let's say new nuts cost 10% more, and it is better to influence the purchasing department by dumping.
In our case, the gist of the offer is this: buyers can get a one-time 20% retro bonus if they buy the first ton of new nuts from Schmidt. Since purchasing departments need two to three months to buy one ton, they are interested in this offer.
The principle of the retro bonus using a simple example
Source: shutterstock.com
To make his point, Schmidt began to mark his nuts. Once it became clear that the nuts from the first batch were holding tight, the assemblers in the shop stopped using other nuts. Given the low cost of nuts in the purchasing budget, management moved on to purchasing the new product without objection.
But Schmidt would not have succeeded in his business if he had not found a new use for the retro bonus. That's right - his pricing policy was based entirely on retro bonuses. The purchase price was the same for everyone, and the amount of compensation depended on the volume of the purchase. The goods were delivered in installments, and many customers did not manage to make payments on time. As a result, customer debt accumulated.
Then Schmidt began to provide retro bonuses with a caveat: clients must not have any overdue debts, and if current clients have any, in order to retain bonuses, the total amount of the overdue debt must be reduced by at least one percent per month.
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Alexander Kuleshov
Alexander Kuleshov
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Calculation of retro bonuses
In Russia, the most important legal aspects of providing retro bonuses are determined by the federal law of 28.12.2009 No. 381-FZ "On the Fundamentals of State Regulation of Trade Activities in the Russian Federation". This law establishes a maximum retro bonus of 5% of the cost of food supplies excluding VAT.
The recurring bonus can be calculated as:
share of the volume of deliveries for a certain period;
percentage of payments in the reporting period.
Sometimes a more complex formula is used, which includes two or more components. It may look like this:
reward for purchasing a certain volume of goods + compensation for certain services = rebate.
As a rule, the remuneration includes the cost of the following services:
delivery and other logistics costs;
product packaging;
organizing and conducting marketing campaigns.