The Opportunity

As companies grow, vendor pricing becomes increasingly complex.

Pricing Inertia

Organizations invest significant energy in vendor negotiations when they procure new products and services.  However, once those vendor relationships are established, it can be difficult to meaningfully improve go-forward pricing. Over time, the deals you receive from your incumbent partners may not reflect best pricing in the current market.

Frictional Forces

As companies grow, organically or through acquisition, so do the frictional forces that lead to pricing inertia. 

Supplier negotiations become distributed throughout the enterprise, and vendors become embedded within the business units. Transactional purchases and fractured spending inhibit the ability to leverage enterprise volumes.

Our Solution

Our clients realize an average of $5 million annualized savings through our risk-free, net cash flow positive engagements.

Overcoming frictional forces requires significant resources, experience and expertise as well as vendor intelligence and spend analytics.   Enterprise sourcing initiatives can yield 10% savings across the spend portfolio, but companies must balance their investment in strategic sourcing against activities that drive top line revenue.

Third Law Sourcing provides the resources and momentum to identify and implement these savings. Our principled approach to negotiation leads to non-disruptive price reductions with your existing suppliers. Our clients realize an average of $5 million annualized savings through our risk-free, net cash flow positive engagements.

Please see our Solutions for more information.

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The Opportunity
What does a good deal look like?

It is typically difficult to assess the pricing and terms in a contract you are asked to approve.  As former C-level executives, we have sat where you are sitting now. Back then, we often posed the question of our team "Did we get a good deal?" The answer was almost always, "Yes."

But the follow-up question —"How do we know?" — often led to a less certain reply.  Frequently, it was, "We sought and evaluated multiple quotes.” perhaps along with, "We did the deal on the last day of their quarter."  Often, “The price was better than last year," or even, "Our vendor was willing to walk away.”

While those are meaningful answers, they do not provide certainty.  Knowing you have an optimal deal requires understanding each vendor's pricing practices.  It means understanding their underlying costs, and how that cost structure will be impacted by your purchase.  It means visibility into their target margins at your volumes, and into their MFN pricing arrangements.  And it means unbundling the products and services within the agreement to provide transparency into each discrete element in the deal.

Our team provides the objective criteria, creative analysis, and negotiating acumen to ensure that your deals are good ones.  Please take a look at our Solutions to see how we can show you what a better deal looks like.