Does Straw Purchasing Violate Manufacturer Channel Commitment?

I've seen this done first-hand a few times. In every case that I can recall, it was not due to a manufacturer wanting to cut a partner out of a deal, but because the end-user was an anomaly and more or less insisted on a direct purchase arrangement. In one such case the end-user was a large federal entity that did ALL of their own installation, service, etc. They had several techs that were trained and certified on the products they used, and otherwise were as competent as an average integrator.

In many cases "normal" integrators did not even want the pass-through sale, they viewed the moderate margin (6-8 points on a $150,000 deal) not worth the future risk of having to offer some sort of warranty support or otherwise getting caught in the middle of a deal they had no control over. I did not really blame them for taking that approach.

For my experiences, integrators did not really care when this happened, because they recognized they had no shot at the business themselves anyway. They were not invited to bid, they were not consulted along the way for product demos, comparisons, etc. The end user was never going to come back later and ask them for a labor-only or service-only bid, so in the end they did not see it as anti-channel because they were never going to get that order anyway.

On the flip side, if there was a case where the end-user was one that would have normally bought through a traditional channel and the manufacturer orchestrated one these "obfuscation sales", then they would get understandably upset.

Note: the deals that I have heard this on are typically private sector corporations, often large retailers.

Over the years, I have had many clients who have wanted to bypass the normal channels and buy direct from the manufacturer. Most of these clients were Fortune 100 companies and used to getting their own way. In several cases, the purchase was handled just like Brian described - the purchase was funneled trough a local integrator who got a small percentage of the sale but was otherwise not involved in the transaction.

In a couple of other cases, the manufacturer simply asked the client "what integrator would you like to work with?", and immediately made whatever company the client named as an "authorized dealer" of their product - throwing any existing dealers in the territory under the bus.

Not fair and not ethical, but that's the way the real world seems to work. Dangle a PO in front of a manufacturer and requirements for the use of an authorized "partner", factory trained technicians, etc. seem to get thrown out the window.

It is Un-ethical and it may be 'the way the world works' on some levels but the relationship with the supplier is critical in doing business. Any supplier that operates in that fashion will screw the integrator at any time and cannot be trusted. Many of our suppliers and their representatives I have developed what I feel like is an honest working relationship with over the years and if I was made aware anyone of them did underhanded crap like that I would have a hard time making the next purchase and I would make it known to many constituents.

This reminds me, every Axis conference (except this last one) Axis would have this guy from Celebrity Cruise Line speak about how great his relationship is with Axis, how great their cameras are etc. Now remember, this conference is about their partners, distributors and integrators, not end users.  

So the guy every year blabs on about how great Axis is, that he is buying 1000's of cameras, how he loves "so and so" at Axis, how he's been to Sweden more than once etc. etc.

But ask me who the integrator is, not a clue?  Has the integrator ever got up and spoken, no.  My point is this guys relationship with Axis is fine, I get how the world works but flaunting him in front of me as an integrator, well that isn't smart, it is disingenuous in my opinion.

Same thing with Avigilon, you can't go around saying how important quality integrators are, that you value the channel and then open up ECs and HVAC contractors.