It usually arrives as a polite email with an attachment: “Due to the current market situation, we are forced to adjust our prices by 8% effective next month.” Price increase requests are part of every buyer’s life — but how you respond determines whether you pay all of it, part of it, or none of it.
1. Never accept the first letter at face value
A price increase letter is an opening position, not a fact. Suppliers send the same template to dozens of customers and expect a percentage of them to simply accept. Acknowledge receipt, state that the request requires review, and give no signal of acceptance. The clock is now running in your favour, not theirs.
2. Ask for a cost breakdown
Request a structured justification: which cost elements have increased, by how much, and what share of the product cost they represent. If energy is 10% of the cost structure and energy prices rose 20%, the arithmetic justifies 2% — not 8%. Many requests collapse at this stage because the supplier cannot or will not show the numbers.
3. Check the indices yourself
Commodity and energy indices are public. Compare the claimed increase against the actual index movement over the relevant period — and check what happened since the last price adjustment, not just the last quarter. Suppliers are quick to pass on increases and slow to pass on decreases; the history often reveals room you can claim back.
4. If you concede, trade — never give
Any acceptance should buy you something: longer price validity, improved payment terms, volume rebates, a second source qualified at the supplier’s cost, or a formal indexation clause that works in both directions. A price increase conversation is a negotiation like any other, and unilateral concessions teach suppliers to come back next year.
5. Fix the structural problem
If a supplier can impose price increases, you have a dependency problem, not just a price problem. Use the episode as a trigger: qualify an alternative, split volumes, or build a should-cost model so the next conversation starts from facts instead of letters.
Want to go deeper? Our course Negotiation Skills for Procurement Professionals dedicates a full module to handling price increase requests, and Cost Analysis and Should-Cost Modeling teaches you to build the fact base.
