Happens all the time in big industry.Random question, someone from a pretty large plumbing company recently told me about kickbacks. I had never heard of this and I'm interested if someone knows if what he says actually happens in business.
He told me that if they buy about 150(depends per contract probably) boilers from a certain manufacturer they get about a €300-€350 "kickback" per boiler. This means that they buy about €150K in boilers and receive €45K kickback at the end of the year. That's almost 30% margin :O
Are these pretty "standard" contracts or deals on materials?
If a company is ordering a material, there is generally a contract in place that says if they order more than "X" amount each year, their price will drop accordingly. So at the end of the year if they use more than that in material they get a credit note for all the stuff they have been buying through the year, and this drop their costs significantly.
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