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It might seem unusual for a company to sell competitors' products, but the key guideline over the years has been that Fisher needs to act with neutrality when marketing self-manufactured products. The goal of Fisher is to provide customers with the best possible experience and products. With humility, not all self-manufactured products are the best in their segment. On the manufacturing side, Fisher is one of the channels for going to market. There is some incentive for Fisher to sell more self-manufactured products when possible, and for the Laboratory Product Group to offer more favorable conditions to Fisher Scientific. However, the mantra remains that the customer decides.
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Historically, I can guarantee that Fisher and VWR receive price lists from every possible vendor. Historically, both have shown enormous resistance to applying price increases higher than inflation. Price is one of the reasons why these channels fight extremely hard and win. They might get a 40% discount from the vendor, and based on their EBITDA goals, they can offer a 30% discount to the end user. The way these channels grow is by managing price. They present the vendor price and then offer a discount, trying to limit it. There are three values here, the official list price provided by the vendor, which is the recommended price; the actual discount, so the acquisition cost, let's call it, for the product; and then they manage the margin through the internal objectives.
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Most importantly, what really makes the difference and has made a difference in the last 10 years for winning contracts is the service component. The quality of service, such as preventive maintenance and how disruptive it is, is crucial. The quality of the product is guaranteed by the manufacturer, but the quality of the service must be guaranteed by the channel. It's no secret that some swings between Fisher and VWR at certain key big pharma companies have occurred due to poor service experiences. I think service is profitable and very profitable when quoted correctly and managed with proper costs.
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