Bargaining Power of Buyers

Customer power: the ability of buyers to drive prices lower, shaped by the number of customers, customer acquisition costs, and switching costs.

Apply four conditions rather than an instinct. The threat rates strong when customers are few, each represents a large share of sales, switching costs are low, and acquisition costs are high. Many small retail buyers make three of those point weak.

4.4.A.6 · 4.4.B.5