Spend Management in the Home: Counter-Sourcing Strategies Abound!

As many long-time Spend Matters readers know, I'm a big fan of applying sourcing principles to purchases of all types -- from building supplies to consumer electronics to automobiles. In virtually all cases, I've found that suppliers will willingly participate in either a round of fax bidding or even a formal RFP process. And usually, the savings are something to get excited about (provided you apply the right sourcing strategy to the right product category). But recently, a supplier almost got the better of me by applying a counter-sourcing approach that was nothing short of ingenious (though clearly unethical in approach). And that's New York-based Camera Addict, a provider of electronics gear that nearly always has the best price on items from a unit cost basis. But trust me, the savings end there. This is one company expert in counter-sourcing strategies.

Over the weekend, I decided it was time to purchase a new video camera for work. After all, if I'm ever going to get into this video podcast thing, I might as well learn to shoot interviews when I'm on the road away from my desktop. Being the frugal sourcing guy that I am, I immediately went to a total-landed-cost comparison engines (that include shipping and tax) to identify the best price for a Panasonic model that I had selected. Camera Addict came up first. All appeared to be fine when I placed the order online, but when I got a call the following day, I knew something was up almost immediately. While I assumed that the salesperson on the other end of the line would try to up-sell me on unnecessary gadgets, I did not expect what else he would sell me on.

Here are my notes from the conversation.

Sales Guy: "So Jason, would you like a battery with your camera?"
Me: "Don't they all come with batteries?"
Sales Guy: "Actually, no, we sell an international model and batteries must be purchased separately."
Me: "How much are they?"
Sales Guy: "We offer three models, starting at ... "
Me: "But that makes you more expensive than all of the other sources out there."
Sales Guy: "But we offer extended batteries that give you more life."
Me: "30 minutes is extended?"
Sales Guy: "Yes."
Me: "Well, then consider my order null and void since you misrepresented what you were selling."

Clearly, these guys are shysters (perhaps that explains Camera Addict's .32 rating on a scale of 0-10 out of nearly 50 reviews for customer service on one reseller ratings site). But their expertise in manipulating price search engines shows true counter-sourcing genius. If I were selling complex products and solutions an environment where a buying organization deployed competitive negotiation approaches, I'd want these guys on my side. And some companies actually are adding such skills on the sales side. I've heard at least a handful of stories of suppliers successfully deploying counter sourcing strategies without a procurement organization even knowing what they're up against. Are you ready for the B2B version of Camera Addict? You should be.

- Jason Busch

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