What is an example of a reciprocal buying?

Answer 1

Reciprocal Buying. One type of negotiation which deserves special mention is reciprocal buying. Reciprocal buying is simply the practice of giving preference to suppliers who are also customers. Since it is rare that a customer can also be a supplier, reciprocal buying is not a widespread practice.

Obviously in those situations where it is possible, it can be good business to buy from companies that are also customers if all factors of service, quality and price are equal, since this practice strengthens the relationship and turns a customer into an even better one.

Unfortunately, reciprocity is not used only when quality price and service are equal. If either party is less than a highly desirable supplier, problems can develop.

Furthermore, although reciprocity is not against the law by itself, it could develop into conspiracy and commercial bribery, which are illegal. In the case of large corporations, it may be a violation of the anti-trust laws.

Reciprocity, for all these reasons, should be approached with caution. If you are in a situation where it can be important, it would be wise not to use your customer as a sole source of supply for the product or service involved. See related link for further details