The Monopoly Playbook: Refuse the Blended Increase

A supplier arrives asking for twelve percent across a category worth £4 million. That is £480,000.

Most buyers negotiate the twelve. Some get it to eight, a few get it to six, and everybody involved treats the exercise as a negotiation about a percentage.

It is not. It is a negotiation about whether the category is one thing, and the supplier has already won that argument by the time the number is on the table.

Your category is three exposures wearing one coat

Score the lines individually rather than the category as a whole and the picture changes completely. On a real example of eight component variants:

Two lines score high. Bespoke variant, single source, twelve-month qualification barrier, and your own customer would have to requalify. Genuinely captive. Worth about £900,000.

Four lines score low. An alternative supplier is already approved. The barrier is not technical. The barrier is that nobody has ever placed an order. Not captive at all. Worth £2.4 million.

Two lines score in the middle. The alternative is in qualification and roughly six months from approval. Captive today, contestable on a date. Worth £700,000.

The average across the eight is moderate, and it is a completely useless number, because it describes none of them.

And that average is exactly what the supplier wants you to negotiate.

Three buckets, three strategies, three different red lines

Bucket one, captive. Accept the captivity. It is real, and pretending otherwise wastes everybody’s time. Then dictate the mechanism. You are not fighting for the price, you are fighting for the formula, the index, the cap, the audit right and the non-compounding basis. The red line is that the mechanism is not negotiable. You may pay more this year in exchange for it, and you should take that trade every time it is offered.

Bucket two, contestable. Reject the increase. Not negotiate it. Reject it. The argument is one sentence: you are asking me to accept an increase on lines where I have an approved alternative sitting idle. The red line is zero, not a reduced increase. And then move one line, immediately, visibly, as a demonstration, because moving one line is worth more than every argument in this article.

Bucket three, transition. Timebox it. Pricing holds at current levels until the qualification date, and on that date it goes to competitive bid, which the incumbent is welcome to win. This converts a permanent captivity into a temporary one and gives them a reason to behave well now.

What the outcome looks like

On the worked example the supplier came for twelve percent on £4 million: £480,000.

They leave with an indexed and capped increase on the £900,000 of genuinely captive lines, worth perhaps £40,000, and a hard clock running on £700,000 more.

And the buyer gave up nothing they did not have to. That is not a negotiating triumph. It is a refusal to accept the frame, and the frame was the entire negotiation.

Why it breaks their strategy rather than just their number

A blended increase relies on the captive lines carrying the whole category. Split the category and every line has to justify itself on its own merits, which means the four contestable lines have to be defended against an alternative that already exists, and they cannot be.

It also removes their best rhetorical position, which is consistency. “This is a global price, we do not make exceptions” is a strong line against a category and a useless one against a line where you can point at an approved supplier and a purchase order you are about to raise.

Do this before the commercial meeting, not during it. Arrive with the category already split, the scores evidenced, and a different position for each bucket. A supplier who has prepared one percentage and one narrative is now negotiating three deals they did not plan for.