BUSINESS FOCUS
ARE YOU MAKING THE MOST OF YOUR REBATES?
Understanding how rebates work, when they’re paid and how to maximise them can be challenging, so BMJ talked to NMBS’ Finance and Operations director Julie Langford to find out more.
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ebates are the profit earned by members of the National Merchant Buying Society on turnover throughput via the society. They’re a lucrative feature of members’ NMBS membership, which makes them worth getting to grips with.
Once merchants become NMBS members, they can access rebates on the products they buy through the buying society. Because rebates represent pure profit, it is no surprise they are a significant member benefit. For instance, in 2022 members earned an average of 3.79% on turnover transacted via NMBS, with a total of £85.3m paid out to members. There are different types of rebates, such as standard rebates; OnePlace rebates; NMBS exhibition rebates; residual rebates, and admin rebates.
Standard rebates
Standard rebates are paid out throughout the year, and at the earliest opportunity possible, so that NMBS members don’t have to wait in order to benefit from their purchases.
Depending on the type, most rebates are paid monthly, quarterly, twice yearly and annually, but the timing of standard rebate payments will depend on specific negotiations between NMBS and each supplier. As a result, every member will get rebate payments from a specific supplier at the same time.
Members commonly get rebate payments from multiple suppliers at the same time, alongside a breakdown of earnings across each.
Rebates are normally fixed percentages which are directly linked to an individual merchant’s turnover with each supplier. Most agreements offer the same percentage of rebate, but there are some which have a tiered rebate scheme – meaning the more turnover a merchant puts through a
Left: NMBS’ Finance and Operations director Julie Langford
not guaranteed and is calculated on a case- by-case basis, determined by the suppliers a member has transacted with in the previous calendar year.
Benefits of rebates
particular supplier, the higher the rebate percentage.
Every agreement is transparent and all NMBS members have an equal opportunity to earn the same percentages of rebate.
Other rebate methods Suppliers can give OnePlace rebates when customers order through the PIM platform. OnePlace is a platform designed to make ordering, managing, maintaining, and distributing accurate product data easier for suppliers and manufacturers in the building materials sector.
Customers can only get NMBS Exhibition rebates if they are at the annual NMBS show, scan with a supplier and places an order with that same supplier. Benefits also go beyond the event because merchants will benefit from this exclusive rebate for the rest of the month.
NMBS rewards members who pay in advance. Members can get Admin rebate by paying their account early and meeting certain conditions. Merchants are required to pay by the 15th of the month rather than at the end of the month, meaning a February invoice would need to be paid by 15th March, for example.
Residual rebate is paid once NMBS’ annual accounts are agreed upon and filed. It represents the balance left after calculating all guaranteed rebates, taking out operating costs and transfers to reserves. This rebate is
August 2023
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Rebates are a prized NMBS member benefit because they represent pure profit on top of the negotiated price of goods. Put simply, the more merchants buy through NMBS the more they will get back in rebates. The rebate deals NMBS members get cannot be accessed by doing deals with the suppliers directly. Companies like Makita, for example, provide the best deal on the marketplace through NMBS.
Common misunderstandings Rebates are not paid immediately. This is one of the most common misunderstandings about rebates.
How often rebate payments are made is impacted by the supplier agreement, which sets when the member will receive their rebate from NMBS. Rebates from Q1 are paid at the end of Q2 and rebates from January will be paid at the end of February. All members have access to a rebate schedule which explains when they can expect payment of each type of rebate available from NMBS.
Members can expect to receive more than double the current £1,300 joining fee in rebates, as a minimum, but many people do not consider the cost of becoming a member alongside these rebate returns. An independent builder’s merchant meeting the minimum turnover requirement of £150,000 per year for NMBS membership would receive around £2,800 in rebate payments. These financial benefits are not available to merchants outside NMBS, so merchant members should make the most of membership benefits to improve business finances by being part of the organisation. BMJ
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