What the e-Sourcing Era Taught Me About Supplier Pricing (and What Should-Cost Reveals)
I ran e-sourcing events for years. The most expensive lesson: a supplier’s price tells you what they think you’ll pay, never what it costs them.
I spent years of my career inside the e-sourcing world: Ariba, Opera Solutions, Pinnacle Sourcing. Hundreds of competitive events across manufacturing, FMCG, healthcare, and services. Watching live, in real time, what happens to prices when suppliers believe they have real competition.
Three lessons from that era still drive how we work today.
1. Prices are set by your behaviour, not their costs.
The single most consistent pattern across all those events: incumbent suppliers who had not faced competition in years had the most room to move. Not because they were villains. Because nobody had asked. A price quoted into silence drifts upward, year after year, in small unchallengeable increments. Competition does not just discover the market price. It resets the supplier’s belief about what you will tolerate.
2. The auction is the last 10% of the work.
Buyers loved the drama of a reverse auction. But events run on dirty data, vague specifications, or categories where the incumbent could not realistically be switched produced savings on paper and chaos in delivery. The wins came from the unglamorous preparation: clean baselines, tight specs, qualified alternates, stakeholders aligned before the event opened. Tools amplify preparation. They do not replace it.
3. Should-cost changes the conversation entirely.
The strongest position I ever saw a buyer take was not “your competitor quoted lower.” It was “here is what this product costs to make: materials, conversion, logistics, margin. Walk me through the difference.” Should-cost modelling turns a haggle into an engineering discussion. Suppliers respect it, because they cannot dismiss it. In high-value categories, in my experience, it is routinely the difference between cosmetic savings and structural ones.
Here is what has changed since that era: the preparation that used to take a project team months, categorising spend, researching supply markets, and building cost models, is exactly the work AI now accelerates dramatically. The judgement about what to do with it has not changed at all. We find that combination of old-school sourcing discipline and AI-speed preparation is where the money is in 2026.
Your suppliers can see whether anyone on your side does this work, and their prices reflect it. The moment you start, the prices reflect that too.