provider

A person, organization or business that offers a good or service.

Convincing customers to buy your products is tough enough without suppliers giving you a hard time. Basic rule of thumb: The fewer the number of suppliers, the more sway they have. Take the steel industry, which relies on a handful of companies for its iron feedstock. If two of those big guys should get together--as BHP Billton and Rio Tinto have been discussing--they would have significant pricing power, potentially crimping steel producers' margins. On the flipside, beware getting hooked on low-cost providers who don't keep an eye on quality. ("Lead-laced" Barbie, anyone?)

• Locking In Customers
• Why do Coupons and Rebates Exist?
• The Balance of Power Between Vendors and Customers
• Switching Costs 101
• One Consideration in Building Your Business Model