Kickbacks are Bad for Business - Explained
Why are Kickbacks a Bad Thing?
Written by J. Mance Gordon
Updated at April 17th, 2024
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Why are Kickbacks a Bad Thing?
In essence, a kickback is a bribe. It's a way of paying money to get somebody to keep doing business with you. From a basic standpoint, you shouldn't have to do that.
If you have the best product, you shouldn't have to pay people to buy it. So, that's a problem with kickbacks,
Around that same idea, kickbacks are not only unethical (which they very much are), they're also illegal. Engaging in anything that's unethical or illegal is a bad idea, as these things can come with consequences.
Lastly, the big impact of kickbacks is that it results in unfair competition. Plus it creates distortions in the market. Plus, the cost of kickbacks is often passed on to customers through the cost of the product. Further, the customer had no choice in the matter with regard to paying a higher price for an inferior product.
Related Topics
- Business to Business (B2B) Definition
- Business to Consumer (B2C) Definition
- Business to Government (B2G) Definition
- Business Customers are Different from Consumers
- What Drives Purchase Decisions?
- Types of Purchase Decisions
- Who Makes Purchase Decisions?
- Role of the Business Buying Center
- Identifying Options for Purchase
- Benefits/Detriments of B2B Relationships
- What is Included in a Business Relationship?
- What are Kickbacks a Bad Thing?