Profit from the Source

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Treat Your Suppliers as Friends

Forge New Dynamic Relationships with Your Most Important Suppliers

Visit most companies, and you’ll find that the interaction between buyer and supplier is essentially a transactional tug-of-war. The buyer tries to squeeze as much profit as possible from the supplier, who in turn tries every way possible to limit the negative impact on its profit margin while still retaining the buyer’s business. But it’s all a charade: the supplier sets an artificially high starting price and agrees to a program of cuts that gives the illusion the buyer is getting a good deal. For its part, the buyer’s procurement team receives plaudits—and bonuses—for seemingly squeezing the supplier.

The buyer-supplier relationship could be ...