Glossary

Diversion

Tags: Glossary

The practice of selling goods to a competitor that the vendor assumes would be used to service that Customer's store. Example; Grocery Store Chain A buys orange juice from Minute Maid. Grocery Store Chain A, because of their sales volume or because of promotion, can buy product for $12.50 per case. Grocery Store Chain B, because ofa lower sales volume, buys the same orangejuice for $14.50 per case. Grocery Store Chain A and Grocery Store Chain B get together and make a deal. Grocery Store Chain A resells that product to Grocery Store Chain B for $13.50 per case. Grocery Store Chain A makes $1.00 per case and Grocery Store Chain B gets product for $1.00 less per case than it can buy from Minute Maid.