Is “Fairness” a Reasonable Basis for Price Negotiation and Supplier Management? [Plus+]

At a recent ProcureCon Marketing event in London, many agencies and buyers opined that “agencies need to make a fair return” from their work with clients. Speakers suggested that collaborative, strategic relationships were unlikely to be developed and sustained if the buyer is continually attacking the agency’s margin. One impressive speaker said, “There’s nothing wrong with an agency making profit margins of 10 or 15 percent, just as a major FMCG (fast moving consumer goods) client with strong brands would look to make.” This leads up to the sixty-four million dollar question – what exactly is “fair”? Peter Smith, Executive Editor of Spend Matters UK/Europe, discusses the subjectivity of the definition of fairness and how it plays into supplier management.

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