Bargaining Power Of Suppliers

Advantage that results when (1) suppliers are concentrated it is, however, usually illegal for them to openly or secretly form a cartel, (2) too few goods are chased by too many buyers, (3) a supplier’s goods are unique or highly differentiated with few or no substitutes, (4) suppliers are forward integrated (see forward integration), and/or (5) high costs are involved in switching from one supplier to another. Suppliers in such position can (and do) demand premium prices.