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To answer this topic, I would like first to segregate the public and the private sector.
For private sector purchasing: Such a percentage could apply as an annual bonus provided from the company and ONLY from the company to its employees. And this is a good way to improve productivity and to achieve goals.
For public sector purchasing: No percentage should apply, not even as a bonus, to the buyers. This is for several reasons I can't analyse right here.
ANY other case of "comission" should be identified as unethical and as a "leak" for the company.
I have seen it done in one of the companies have been working.
I personally find it wrong ...
As I mentioned in an other blog regarding this problem; I have found that the manager directed me to purchase from this vendor ... the bad part of this vendor has been that he was our most expensive, most unreliable vendor we had; I also had the most problems with them reconciling there bills with our PO's; there website never been updated and I had to call for pricing most the time and than it been wrong...
I made my manager several times aware of this problem and fell on deaf ears ... I did not betray my boss,
and yes, I tried every year to get a 3% price reduction for the items I purchased throughout the year from the same vendor in addition to help him/her to help us solving manufacturing problems with the commodity.
However non of these price reductions have ever earned me a commission.
No kind of commission could be considered legitimate for the buyer even out of savings from cost reduction. Such a practice if legitimized would cause initially higher bids in connivance with the seller and then having obtained reduction as result of negotiations.
By definition, you are already getting a big bonus and added value for your company and yourself when you reduce your company's costs, for the company, it will get more competitive advantage in the market, and will increase its profit, for your self you will get more support from your Management, you will gain more experience and add to your qualifications and skills, you will get more profit share when you increase your company's profit, and you will be more qualified for promotion.
It is not always about money, most important is to be outstanding in your career and exceed your Management expectations, this will sure lead to your promotion and salary increase, however if you are looking for commission, you can better think about shifting your career to Sales or Marketing.
i'm agree with expert answers
i am not due to globalization that gives buyers or customers a high bargaining power
No i am not and i did not practice it in my 18 years experience in this filed
I do not recommend such practice as you will be invoicing some thing to the customer and offering some thing to the buyer. What I recommend is to offer final reduced price for the customers, surely we will be doing good with it.
I am not, this quit similar question, the issue here that as procurement (buyer), for such a commission he/she might specify the other purchasing operation component (i.e. quality, delivery, etc..), because he/she will be driven by the commission amount rather than terms of the PO's.
Shaikh,
The commission which is demanded by any of buyer whether in a individual capacity or as a company can not be legitimized irrespective whether it ois written or vocal.
Yes, discount is a right term which can be passed to buyer under special circumstances like bulk purchase, cash payment or as a part of long term strategic relationship.
