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Joined 1 year ago
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Cake day: June 30th, 2023

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  • Supermarkets are the source sales for vendors so they have more power during negotiations. Alot of vendors want contracts with big businesses (supermarkets) because their supply chain network but give up a lot of negotiation power.

    An example. Vendors mostly use a cost plus pricing. Think cost+oh&p(15%)=price to store. During contract negotiations vendor A can push for an increase in price due to cost escalations or just cut down in their oh&p percentage. Eventually the percentage can get so low that it’s not worth the business. So vendor A can push for a price increase but the supplier can also push back and threaten to go with vendor B.