My parents own a shop that sells nuts, bolts, clamps, and some other stuff for industrial fixation.
One of our clients is a huge company (it is a conglomerate, that in several areas it has the first place in market share), and it works by making a price contract with you, and while the contract is in force, you must sell for the price set on the contract start.
My mother got good in negotiating those contracts, and not allowing the client to push us around, and this resulted into a profitable relationship, but we know that this big client left several of our competitors utterly destroyed, it leaves a wake of company destruction...
It is because many companies, several bigger than my parents (my parents company have no employees, and sell small amounts of stuff used mostly for emergency repairs stock), believe they are too small, and that such big client is awesome and they must then take their first term of the contract at loss to attract the client...
The problem is that after the contract expire, the client just refuse to raise the contract much above inflation, thus if you accepted a past contract at loss, you have suddenly to play hardball to Chuck Norris level to get profitable again, since the person let themselves get pushed around in first place to get the client, they usually don't negotiate enough, and of course, get abused in the way that the client repeteadly orders lots of stuff from them until the losses are too big and they fail.
We learned better, we made clear to that conglomerate, that we won't sell at loss, we prefer to not sell at all, than selling at loss.
One of our clients is a huge company (it is a conglomerate, that in several areas it has the first place in market share), and it works by making a price contract with you, and while the contract is in force, you must sell for the price set on the contract start.
My mother got good in negotiating those contracts, and not allowing the client to push us around, and this resulted into a profitable relationship, but we know that this big client left several of our competitors utterly destroyed, it leaves a wake of company destruction...
It is because many companies, several bigger than my parents (my parents company have no employees, and sell small amounts of stuff used mostly for emergency repairs stock), believe they are too small, and that such big client is awesome and they must then take their first term of the contract at loss to attract the client...
The problem is that after the contract expire, the client just refuse to raise the contract much above inflation, thus if you accepted a past contract at loss, you have suddenly to play hardball to Chuck Norris level to get profitable again, since the person let themselves get pushed around in first place to get the client, they usually don't negotiate enough, and of course, get abused in the way that the client repeteadly orders lots of stuff from them until the losses are too big and they fail.
We learned better, we made clear to that conglomerate, that we won't sell at loss, we prefer to not sell at all, than selling at loss.