How to Work with a Paper Merchant

As a mill rep, I sold paper through merchants. As a printer, you probably buy paper from merchants.

I found that most merchants make money selling paper, but there are a few who make money buying paper.

How do they make money buying paper? I remember a story, told to me by a merchant executive, about how some of the company's sales reps were celebrating a drop in the price of paper. Why were the sales reps happy? Because they knew that for at least some of the orders they had in place, they could buy the paper at the lower price, but would not have to pass the savings on to the printer. Since they were paid a commission on the gross margin, this meant more money in their pockets, while everyone else was a loser: the mills that had lower prices, the merchant house whose inventory value went down, and the printers who were not getting the reduced market price.