bargaining power of customers definition

bargaining power of customers

Advantage that results where (1) the buyers are concentrated or organized, (2) their purchases represent a large part of the supplier's revenue, (3) their purchases represent a large part of their own costs, or (4) there are too many suppliers chasing too few buyers. Buyers in such position can (and do) put relentless pressure on the suppliers by demanding higher quality at lower prices.

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