I hope that you have enjoyed the article “The Target Pricing Controversy.”
One argument that opponents of target pricing use is that “if you set a supplier’s price, you may be leaving money on the table.” In other words, the supplier may have offered a lower price if you gave them a chance to do so.
As I teach in “Powerful Negotiation For Successful Buying,” in many cases you don’t want to ever disclose your price targets to your supplier. But under the conditions described in the article, there are times when it is appropriate to do so.
Again, it has to be for the right type of purchase. Custom products that your organization has designed and internally-performed services that you want to outsource are two prime examples.
Do you have experience with or an opinion about target pricing? Share your comments here!
To Your Career,
Charles Dominick, SPSM
President & Chief Procurement Officer
Next Level Purchasing, Inc.
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