# Respond to a supplier's price increase

An analysis of whether a supplier's price increase is justified, plus negotiation options and a reply you can send.

- Topic: Projects & Operations
- Framework: Few-Shot
- Level: Standard
- Tags: Legal, Fill-in Template
- Source: https://www.thinkwithprompt.com/prompts/respond-to-a-supplier-s-price-increase

## Prompt

```text
A supplier has told us they're raising prices. Help me respond.

**Supplier and what they supply:** [DETAILS]
**The increase:** [%/amount, effective date, reason they gave]
**Their notice or letter:** [PASTE]
**Our spend and volume with them:** [ANNUAL SPEND, VOLUME, CONTRACT TERMS]
**Contract terms on pricing:** [e.g. fixed until X, index-linked, notice period - paste the clause if I have it]
**Alternatives:** [other suppliers, switching cost and time]
**How critical they are:** [e.g. "sole source", "one of three"]

Help me:
1. Check the increase against the contract: are they allowed to do this now, with this notice?
2. Test their reason: which cost drivers (materials, labor, energy, freight) plausibly moved, and what share of their price those likely represent. Tell me what data to ask them for rather than assuming figures.
3. Calculate the impact on our annual cost and on our unit cost or margin.
4. Give negotiation options: reject, phase in, partial increase, longer commitment in exchange for a cap, index-linking, volume or payment-term trade-offs, cost-reduction ideas together.
5. Rate our leverage honestly and suggest a walk-away point.
6. Draft a reply that is firm but keeps the relationship, asking for supporting data and proposing a meeting.

Don't invent market data; mark it [CHECK MARKET INDEX] where it would help. Contract interpretation should be confirmed with legal.
```

## What to fill in

- DETAILS
- PASTE
- ANNUAL SPEND, VOLUME, CONTRACT TERMS
- other suppliers, switching cost and time
- e.g. "sole source", "one of three"
- CHECK MARKET INDEX

Free to copy and use. From ThinkWithPrompt (https://www.thinkwithprompt.com/), a library of 2,663 curated AI prompts.