Tight markets, scarce supply capacity, collusive behaviour – anyone purchasing industrial goods needs the right strategy for every market constellation. IFAMD Services provides the structured framework and negotiation tactics to match.
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In seller's markets, suppliers set the pace. Those not considered attractive customers are pushed to the back – or pay premiums that blow the budget.
Even without an explicit cartel, suppliers can set similar prices. Failing to recognise and address this means systematically giving away procurement potential.
Specifications, delivery terms, ancillary services and more differ between suppliers and require a differentiated price comparison.
What works in a buyer's market – e. g. bundling and tendering – can have the opposite effect in a seller's market and expose the buyer.
Not every market works the same way. The IFAMD Matrix classifies each
material category along two dimensions: the supply-demand ratio
and your own attractiveness as a customer.
This gives rise to four fundamentally different strategies.
The IFAMD Matrix determines the market constellation. Where does the material category stand? Buyer's or seller's market? Are we an attractive or a replaceable customer? Only then is the appropriate negotiation strategy chosen.
As an attractive customer in a tight market, focus on integration, joint process optimisation and vertical partnerships with key suppliers.
Where supply exceeds demand and you are a sought-after customer: establish comparability, pit bidders against each other, secure the best offer.
In a tight market without customer privilege: de-bundle, standardise, reduce requirements – and prioritise supply over price.
Where suppliers tacitly cooperate, bundling volumes, long-term contracts and consistent avoidance of price transparency help.
In a seller's market, the negotiation logic is reversed. Buyers who apply buyer's market methods – bundling large lots, running hard auctions – risk alienating suppliers and ending up empty-handed.
The right response depends on how attractive you are perceived as a customer. Attractive customers invest in collaboration and long-term partnership. Replaceable customers must first focus on securing supply – and gradually build their attractiveness as a customer.
In both cases: secure requirements in smaller tranches, increase specification flexibility and avoid overwhelming suppliers with oversized tenders.
Speak with Dr. Gregor Berz about your specific market situation. Whether scarce supply, collusive supplier behaviour or a complex tender structure – IFAMD Services will show you which strategy has the greatest leverage in your material category, and Dr. Gregor Berz will apply it for you.
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