Who tends to have more leverage in negotiations, food/beverages companies (Coca-Cola, PepsiCo, Mondelez, Unilever, etc) or the big retailers (Wal-Mart, Target, Costco, etc)?

by fuufufufuf. Posted on Sep 13, 2020    2    4


I mean when they are negotiating the price that the retailers will pay to buy products from the food/beverages companies.


Comments

bumperpickle 1

Depends, but more often than not, retailers. It’s easier for retailers to swap brands and make up the difference than vendors to make up the difference with another retailers. During a dispute, both will lose, but the impact is harder on vendors (most of the time). Think of it this way, if you cant find Tide, you might be upset but you’ll just grab Sunlight. If Walmart is 35% of your business, who’s going to make that up?

hopeunseen 1

depends what they are negotiating on, and who wants what from who

  fuufufufuf 1

When they are negotiating the price that the retailers will pay to buy products from the food/beverages companies. Who needs more who?

hopeunseen 1

It depends man - If you sell something that brings tons of customers into my store, I need it more than something with less volume / brand loyalty. Vice versa if you have massive distribution and I am a small producer seeking to expand, you have more leverage than coke who doesnt need that distribution from one single retailer. It depends on size of retailer, size of wholeseller, location, business strategy of both sides etc.... this isnt a simple a or b answer question.

In the end, the one who needs the other person more has less leverage - who that will be depends on circumstance