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The instinct to buy direct is understandable. If there's a middleman in the supply chain, the logic goes, you're paying for them. Cut them out and cut the cost.
In government technology procurement, that logic tends to get the math backwards. The distributor's margin isn't overhead. In most cases, it's paying for infrastructure the vendor would otherwise have to build themselves and that cost doesn't disappear, it just moves.
If the math on buying direct has never quite been explained clearly, this piece walks through it.
Read the full piece on The Trading Post →
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