Challenge #2: Poor Negotiations With Suppliers At Renewal Time
Since they were unable to trace the original contracts signed with their suppliers, they were losing a lot of leverage during renewals and renegotiations. The nature of their business resulted in significant discounts during the initial purchase – however, during renewals, the lack of data and insights put them at a disadvantage during negotiations. This resulted in a very difficult and often costly renewal process. Re-negotiations often took 3-4 weeks as both parties (Black Diamond Ranch and the supplier) were looking for contract data, prior transactions, and time for negotiation. Working on good faith was not viable, due to the added risk involved.