You consolidated to one supplier for the rebate. The rebate is now the switching cost.

Volume rebates are usually priced as a discount. Structurally, most of them are something else entirely, and the difference shows up at renewal.

By Steve 5 min read
Abstract bridge artwork for You consolidated to one supplier for the rebate. The rebate is now the switching cost.

A consolidation decision usually looks clean on paper. Three suppliers in a category become one, the volume qualifies for a better tier, and the saving is real and easy to evidence. Two years later the same category is harder to negotiate than it has ever been, nobody can say confidently whether the unit prices are competitive, and the annual conversation with the supplier has a strange quality to it: they are relaxed, and you are the one calculating what a change would cost. Nothing went wrong in the negotiation. The…

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