The supplier wants 8%. Some of that is the cost of how we buy.

When a price increase letter lands, the argument almost always happens on the wrong variable: the number itself rather than what generated it.

By Steve 5 min read
Abstract bridge artwork for The supplier wants 8%. Some of that is the cost of how we buy.

The letter arrives in October for a January start. Input costs, energy, wages, freight, regrettably necessary, 8%. The usual responses are to accept it, to push back and settle at four, or to run a tender that produces three quotes and a lot of work. All three treat the percentage as the thing under discussion. It rarely is. A supplier’s price to a specific customer is not a single number. It is a stack: the cost of the input, the cost of converting it, the cost of getting it to…

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