You work as a purchasing manager for a large European retailing company that is in the process of revamping its line of own-label cosmetics. This line is important to your business, and as your company has expanded, own-label cosmetics have gradually occupied an increasingly prominent role in the product mix in stores. Your existing supplier of own-label products, Beauty To Go, has supplied your company for ten years and over two-thirds of its business is accounted for by your company’s orders. You have a good relationship with the account manager who, like yourself, has been in her role for a number of years, and has become a good friend. As you are considering how to proceed with the revamp, a competing supplier, Real Cosmetics, contacts you offering virtually identical products to Beauty To Go, with what appear to be equivalent supply arrangements, but at a slightly lower price per unit. Over a year this would work out to approximately €200,000 savings—not a huge sum for your company, but quite a substantial saving of about 2% on your costs. In addition, Real Cosmetics also highlights in its sales pitch that it goes well beyond the industry standard for non-animal testing of the products’ ingredients—again, a significant improvement over what Beauty To Go has been offering you.
