Work through the supplier increase request
0 of 15 checked
Log the notice
Validate the basis
Quantify exposure
Choose and close
How to quantify the supplier’s request
Monthly impact = (proposed unit cost − current approved unit cost) × expected monthly volume
Example
A supplier proposes moving a component from $12.00 to $12.72. You expect 1,500 units per month.
Unit increase: $0.72. Requested increase: 6%. Monthly exposure: $0.72 × 1,500 = $1,080. Annualized simple exposure: $12,960, before volume or mix changes.
Sort affected SKUs by dollar exposure. That identifies where negotiation effort, alternate sourcing, or customer-margin review has the most value.
Evidence to request
- Exact affected SKUs and old/new unit prices.
- Effective date and required notice period.
- Cost driver and the portion of price it affects.
- Relevant index series, base period, lag, geography, and formula if indexation is claimed.
- Changes to freight, fuel, rebates, minimum order, lead time, or payment terms.
- Duration: temporary surcharge or permanent list-price change.
Government procurement guidance illustrates why pricing needs an explicit basis and clear evaluation. See the CanadaBuys Supply Manual pricing guidance. For index-linked clauses, also review the BLS price-adjustment guide.
Response language you can adapt
Request more evidence
Thank you for the notice dated [date]. Before we can assess the request, please confirm the affected SKUs, current and proposed unit prices, effective date, and the cost basis for the change, including any change to freight, rebates, minimum orders, or other terms.
Accept conditionally
We can accept the prices listed in the attached schedule effective [date], subject to all other commercial terms remaining unchanged and written confirmation that the adjustment applies only to the listed SKUs. This acceptance does not apply to substitutions or future increases.
Counter with a phased change
Based on our volume and the notice period in our agreement, we propose [price or percentage] effective [date], followed by a review on [date]. Please confirm whether a volume commitment, alternate specification, or freight arrangement could reduce the requested adjustment.
Frequently asked questions
Should I accept a supplier increase if it matches inflation?
Not automatically. Confirm the index is relevant to the product, cost driver, geography, and period; check contract terms; and quantify the SKU-level effect. General inflation is context, not a calculation for every item.
How quickly should I respond?
Acknowledge receipt promptly, then set a date for the evidence and decision. The binding timeline depends on the contract, notice period, operational risk, and alternatives.
What should be saved in the final file?
Keep the original notice, affected SKU schedule, calculations, invoices, contract or quote, supporting index evidence, internal approval, sent response, supplier confirmation, final effective date, and baseline update.