Text by Alon Sochaczewski, Founder and CEO of Pipeline Capital.
Let’s take advantage of the beginning of the year to reflect on essential behaviors that can change a nation today.
Let’s talk about price culture.
The culture of negotiating prices in Brazil embodies the immaturity of a country and a Nation. Basically, it starts from a false premise that everyone has a generous profit margin and that they agree to reduce it through a contract.
Countries like Brazil, where this practice is almost a federal law, crushes the executive, the entrepreneur, the citizen and creates a false culture of victories for those who get the discount, the contractor and the injured party.
An asymptomatic disease.
A synthetic, evil, fake dopamine.
It’s false because if it’s cultural, the negotiation margin is already built into the price composition. As simple as that.
Time is wasted with this theater and efficiency is pretended.
To make matters worse, in such efficient companies, they created a price negotiation department (not suppliers) with various tools, practices and incentives to crush companies with a pestle. One of them just to exemplify is the reverse auction, where the lowest price wins the contract. The Brazilian government, for example, uses this practice due to its transparency and austerity as practices.
It seems to me that Brazilians understand that making a profit is a sin. Having a prosperous company, with a sustainable profit – where jobs are generated, families with more capital and power to invest, mainly in education, housing and health. Having more prepared families creates new generations to produce a better country, generating more jobs, more business, more tax collection and many other circular benefits to the economy, creating an upward spiral.
Do you understand that this is not a structured incentive plan and that it does not depend on the economic moment of a country?
Now, how to put an end to this evil culture?
It’s simple, don’t negotiate.
Change your thinking.
Take the binary logic out of expensive or cheap.
Switch to the “can I or can’t”.
Yes, research suppliers and understand their price, based on what they are and mainly: set your budget. If you like a certain company that has the highest value, understand the reasons for this composition. What makes you have this position and assess whether it is rewarding for you.
Companies with good ESG practices need to exercise their Sustainability in their Supply Chain by changing their hiring culture.
And you, reflect on this practice. Whether it’s choosing a restaurant or buying a service from a simple and hardworking person, as the vast majority of Brazilian people are and struggle to earn their daily bread. There are thousands of micro and medium entrepreneurs that are the engine of this nation.
This is one more step towards a better world and within your reach today, now.
Text by Alon Sochaczewski, Founder and CEO of Pipeline Capital.
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