How Can You Stop Back Door Selling?

Back door selling is a pretty common occurrence and can add significant costs to your organization. Backdoor selling is what happens when the selling Account Executive doesn’t get what he wants through the normal selling process and goes directly to someone else in your organization and convinces them to commit to a deal without the proper people involved and the appropriate approvals. Unscrupulous sellers are looking for the weakest link in the organization that they can convince to make the commitment.

Recovering from this situation can be a challenge as it can be difficult to reopen negotiations with a seller that believes that they already have the business. There are a few strategies that you can use to recover from this situation, but more importantly you need to implement process changes to ensure that this problem doesn’t happen in the first place.

Have a centralized supplier approval process – in order for a company to supply products or services to your organization they must be on the approved supplier list. As a prerequisite for being on this list the supplier must agree to your terms and conditions. This includes recognizing who are the approved signers for all supply agreements and that any agreements signed by non-authorized individuals will not be enforceable.

Communicate with all your employees – ensure that all employees are aware of the policies and procedures that are in place and who are authorized to sign contracts. Failure to follow the rules should result in some sort of disciplinary action such as baring the seller from doing future business with your company. Make sure that the end users understand the problems caused by their actions and get them involved in the negotiation process.

Communicate with suppliers – make sure that all suppliers know your purchasing policies as well. Let them know that backdoor selling of any kind will not be tolerated and if it is even attempted that they will no longer be allowed to sell to your company.

If the deal is already done – look to see if there are any weaknesses in the contract that you can attack. The best case is that you can find an avenue to void the contract but if that is not possible you may find an opportunity to gain some concessions such as better service agreement, longer warranty, lower prices or extended payment terms.

Communication is your best ally to ensure that your company does not incur the potential costs of backdoor selling.

Stephen Machin is a cost management specialist helping businesses plug their profit leaks and put more money on their bottom lines. He can be reached at 905.862.0179.