News Flash – The Government Screws Itself…Again

So with all the drama about the GSA scandal over the past few months, I thought I would add to the argument about how useless and self-defeating GSA is to begin with.

Here is a brief background on what GSA does (Wikipedia)

“The GSA Schedule is awarded as a prime contract entered into by the federal government and a vendor that has submitted an acceptable proposal. At the core of the GSA Schedule contract lie two key concepts: 1) Basis of Award customer or group of customers and 2) Price Reduction Clause. The two concepts are applied in concert to achieve the government’s pricing objectives for the GSA Schedule program. Namely, the government wants to ensure that when the vendor experiences competitive pressures to reduce its pricing, then the government can benefit from these and be extended reduced pricing as well.”

In order to get a contract with GSA to sell to the government, a company must fill out reams and reams of paperwork and go through a process that would make your head spin. Furthermore, GSA will give you special consideration and perks if you are minority owned, veteran owned, woman owned, owned by a person with disabilities or have your business residing in what is to be considered an impoverished area. If you are, you will get better contracts and can actually offer a higher price than competitors and still win a bid. (http://www.gsa.gov/portal/content/104857)

This is absolute bullshit! Here are some ways that I get around this whole system. I get my wife to be CEO of my company even though she has nothing to do with it and I run it – BAMM! I get a buddy of mine who spent 2 years in the military to be a minority partner in my business – BAMM!. I rent a small office on the edge of an impoverished area and have the mail forwarded to my luxury offices in Beverly Hills – BAMM! I hire some kids from an  impoverished area to do menial work – BAMM!

Or here is the most common one… Don’t do it at all. A manufacturer will get a partner company to carry the GSA contract. This way, the partner gets the benefit of all the GSA business and the manufacturer has no obligation to GSA. This is important to note because if a manufacturer signs on to GSA, they are required to give their absolute lowest price on the contract so that all government agencies are assured the lowest price. Having a partner carry the contract makes it only so that the partner has to honor that price. The manufacturer can now discount to their hearts content to any commercial customer they want. Wasn’t the point of GSA to get the government to pay the lowest possible price? This is another example of your tax dollars proving the law of unintended consequences.

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Just love this article.

The Pinstriped Suit

I’m going to take a bit of detour off the beaten track for my post today.

The idea for this post was born out of a casual conversation I was having with a friend of mine Kim (@iamkimu).  We were standing in a line up at Tim Hortons and at we both noticed a guy destroying his beautiful suit with an outdoor backpack from Mountain Equipment Co-op. We decided to come up with a list of 9 fashion failures that guys with suits frequently do.

This list is purely an opinion piece and if you want real fashion tips, check out GQ.

1) Wearing a suit and a backpack

This one is simple. You pay $300+ for a nice suit, get it tailored and it looks awesome. Then you ruin the frame of the suit by tossing a heavy backpack on it. Spend $60 and buy yourself a computer bag…

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Another bullshit manipulation tactic sales people use

There is one tactic that I use that is really kind of messed up, it is called mirroring. When a sales guy wants to convince you that he is just like you and you are simpatico, they might try this tactic to affect you on a subliminal level. Here is an example:

You are sitting at your desk and the sales guy is sitting across from you.

  • Your natural tendency is to sit back, slouched in your chair, Suddenly, the sales guy starts to sit back slouched in his chair.
  • You hear an interesting point and you raise your right hand to your chin. About 5 seconds later, the sales guy raises his hand to his chin.
  • You hear something that you don’t understand and you lean forward, About 5 seconds later, the sales guy starts to lean forward.

The idea here is for the sales guy to get you to connect with him to make you think you are of the same mind. I personally hate it when I see this being done to me (which I saw at a car dealership). Be careful not to jump to conclusions though if you see this being done to you. There is a small possibility that the sales person is just naturally doing this and is not aware of it.

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Lesson #9 Making Shit Up

When you ask a sales guy a difficult question and there is either a hesitation or the sales guy just starts to drone on and on almost rambling, he is probably making shit up.  I personally avoid this and answer with an “I’ll get back to you” but I have occasionally done this as well. It’s important that you know when someone is bullshiting you for obvious reasons. They will say things to deflect your question or bring up another subject entirely to avoid having to say “no, we don’t do that”. Don’t let them do that to you. Stay on point, if it is an important question, keep asking the same question over and over again until you either get a yes, no or an appropriate answer. Keep in mind that you are in charge and shouldn’t be intimidated by the sales guy, don’t be afraid to keep asking questions until you get the answer that you want. Ultimately, it may end with an “I’ll get back to you” but that’s OK, just make sure to keep their feet to the fire on getting that answer. Lastly, review lesson #4, if they can’t do what you are asking they will try throwing road map at you.

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The Var and the Vendor

The Var and the Vendor.

 

This guy pretty much nails it on the head.

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Lesson #8 – All Middle Men are not Assholes

Many managers and procurement will get into the mindset that they must deal with a company directly to get the best price and service. They feel that having a Reseller/VAR/Middle Man between them and the company only adds to complexity and costs. This definitely can be true however as the title implies, not all middle men money sucking leaches who add no value. Many times, companies will shoot themselves in the foot by trying to save a dollar going direct rather than using a VAR (Value Added Reseller). Here is a quick list of reasons why to go with a VAR:

  • An added layer of support. If the company is not responding to you, you have an ally in the VAR to answer questions.
  • If you allow the VAR to get to know you and sell other products to you the will become intimately familiar with your organization at a deeper level than the manufacturer you would be purchasing from. Sales people that work directly for manufacturers are known for “run and gun” sales. They are in, sell you the product, and then get out quickly on to the next guy. A VAR will stay with you for the long haul knowing they can get more business from you (this is not a bad thing).
  • A VAR can get significant discounts from the manufacturer that they can pass on it to you. Many times, due to contractual obligations, the VAR can discount higher than the manufacturer themselves.
  • Locality. A VAR will probably be local to your market and you can have a human body to meet with you at your whim. Manufacturers can be thinly spread across the country or the world and not have the ability to easily meet you in person.
  • What if the manufacturer goes out of business? Who do you have to fall back on then. A VAR has typically had quite a bit of training from the manufacturer and will be able to give you some level of support (typically for a fee) after the manufacturer has vanished.

Things to watch out for with VARs.

  • Many VARs are product pushers. They will just sell you a product at a discount and have no experience on the product or product category. If you run into a problem, good luck.
  • Many VARs don’t offer professional services. It is nice to have consultants or engineers you can hire on a contract basis that are familiar with your organization, products you use and your needs.
  • Many VARs will give you dishonest advice. Manufactuerers will offer VARs “spiffs”. These are programs where the VAR will make more money selling Company ABC’s product of Company XYZ’s even thought Company XYZ’s might be better and less expensive.
  • VARS will sell you what you want, not what you need. They are almost always going to take the path of least resistance and sell you the well known product versus the best product for your needs. Look for VARs that bring you alternatives to the big boxes, this is where the “Value” comes in Value Added Reseller.

Like I said in the title, not all middle men are assholes but many are. Hopefully these tips will keep you away from the assholes and point you to the good guys.

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Lesson #7 Don’t let-em fuck with you

Here is a manipulative tactic sales people will use on you. They will get you to say yes to something you have to say yes to such as “You live in California right?”… “You initially liked this car right?” and on and on. After someone says yes over and over again, it is psychologically tough for them to say no. So after 5th time of you saying yes is when they pile drive you with a “Buy this car now and you will have a great weekend and feel so much better about yourself”… yes…. I mean no…. I mean yes but… oh shit… Ok let’s buy it. Screw that, don’t get caught in the sales trap to begin with. When they start hitting you with the yes questions, just don’t answer or ask them a different question to throw them off their game.

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