How to Negotiate a Supplier Price Increase (Email + Talking Points)

Supplier price increases are one of the most common triggers for procurement negotiation. The goal is not to “win an argument”—it’s to reach a defensible agreement that protects budget, reduces risk, and preserves service levels.

Key takeaways

• Separate legitimate cost pressure from opportunistic margin expansion.
• Use benchmarks and alternatives to strengthen your BATNA.
• Negotiate in packages (price + term + scope + SLA), not price alone.

Step 1: Ask for justification (and make it specific)

Before negotiating numbers, request clarity:

• What changed (labor, materials, FX, logistics, scope)?
• What portion is temporary vs. structural?
• What is the timeline for the increase?
• What flexibility exists (term, volume, payment, scope)?

You can’t negotiate well against a vague “costs went up.”

Step 2: Bring data (benchmarks + usage)

Collect:

• Your actual usage and forecast
• Competitor pricing or market benchmarks
• Performance data (SLA adherence, incidents, delivery reliability)
• Switching and onboarding costs

Even if you don’t plan to switch, credible alternatives improve leverage.

Step 3: Set your ranges (target / acceptable / walk-away)

Create a simple set of boundaries:

• Target: __________
• Acceptable: __________
• Walk-away / BATNA trigger: __________

Then decide which non-price levers you can trade.

Step 4: Offer packages, not haggling

Examples:

• Package A (best): flat price + longer term + volume commitment
• Package B (balanced): small increase + improved SLA credits + net 60
• Package C (fallback): reduce scope + price protection clause + shorter extension

Packages move the conversation from “yes/no” to “which mix works.”

Step 5: Use a clean concession rule

If you concede anything (price, term, payment), tie it to a condition:

• “If we accept X%, we need Y (term, SLA credits, or scope).”
• “If you need a decision by Friday, we need a written summary today.”

Avoid one-way concessions that set a precedent for next year’s negotiation.

Email template: respond to a supplier price increase

Subject: Price increase request — discussion and next steps

Hi [Name],

Thanks for sending the proposed pricing update. Before we can evaluate the request, we need a bit more detail on the drivers behind the increase:

• Breakdown of the cost drivers (labor, materials, FX, logistics, scope changes)
• Effective date and whether the change is temporary or permanent
• Any flexibility available across term length, volume commitments, scope, and payment terms

Separately, we’re reviewing usage, performance, and market benchmarks so we can align on a fair outcome. Once we have the above details, we can set up a call to discuss options and potential packages.

Best,
[Your Name]

Talking points for the negotiation call

• “Help us understand what’s driving the increase and what levers you can move.”
• “If we commit to a longer term / volume / faster payment, what can you do on price?”
• “We need price protection and predictability—what can you offer beyond a single-year number?”
• “If we accept an increase, we need improved SLA credits and clear service guarantees.”

Want to prepare this in 10 minutes instead of 2 hours?

If you’d like a structured plan (ranges, packages, scripts) based on your specifics:

• Prepare a negotiation
• Start a free trial

FAQ

Should procurement accept a “standard” price increase?

Not without justification. “Standard” often means the supplier expects you not to challenge it. Ask for cost drivers and negotiate tradeoffs.

What’s the best non-price lever in procurement negotiation?

Term length and volume commitments are often the biggest levers—especially when paired with clear performance requirements and SLA credits.

How do I avoid repeating the same negotiation every year?

Document the outcome and the rationale (benchmarks, cost drivers, concessions). Build price protection clauses and clear triggers for future adjustments.