We’ve all been there. A polite email lands in your inbox with notification of a supplier price increase. Often framed as ‘regrettable but necessary’ such emails cite references to inflation, global unrest, ‘unprecedented market conditions,’ and the need for an ‘essential price increase’. How can Indirect Procurement professionals effectively respond, particularly when dealing with a diverse set of categories? Here are 10 practical tactics to help you navigate and challenge supplier price increases, safeguarding corporate budgets without damaging supplier relationships. 

PREVENT AND PREPARE (proactive, data-driven steps)

1. Ask for detailed, transparent and itemised justification

Start by demanding a detailed cost breakdown: raw materials, labour, energy, logistics, overheads, and margin; you can use a standardised cost breakdown template if you have one. Some suppliers request price increases citing one increasing index that only constitutes a small proportion of the overall price. This may be balanced out by another cost that is trending downwards. Many requests fall away when the supplier realises that they need to provide actual data.

Examine current contracts for clauses that limit or govern price changes (e.g., annual reviews, CPI-linked increases, maximum thresholds). Enforce these where appropriate before entering into further negotiation.

2. Benchmark, benchmark, benchmark

Compare proposals against market data, historical pricing and what other suppliers are charging. Use subscription data such as CASME industry benchmarks and peer events, Insights Reports from WNS Procurement/The Smart Cube, and AI safe-prompted searches containing verifiable sources to produce evidence. That way, if a supplier is asking for a 12% increase and the market is trending at only 3%, you have a solid foundation to challenge the proposed price increase.

Where possible, conduct a financial health check on the supplier. If profits remain strong or raw material costs are falling, challenge their justification robustly.

3. Implement predictive cost avoidance

Don’t wait for the price hike email. Stay ahead of the curve by monitoring key cost drivers in your largest procurement categories. When you see logistics prices creeping up, or labour shortages emerging, it is time to be proactive. Lock in pricing, revisit service level agreements (SLAs) and the scope of services, or negotiate index-based pricing (such as commodity, freight/logistics and energy, but not labour) before suppliers do.

PUSH BACK (assertive and tactical responses)

4. Say 'No' (tactfully)

There is power in an early and calm refusal. In indirect categories where suppliers often enjoy long relationships and little challenge, this simple tactic can prompt a re-think. But use this approach wisely – for strategic or hard-to-replace suppliers, a softer approach may be required.

5. Explore alternative suppliers and reduce dependency 

Revisit the market, test competitiveness, and consider onboarding a new or additional supplier. Even if you don’t switch, the mere act of doing this sends a clear signal: price increases should be justified rather than assumed.

6. Unbundle or re-bundle the scope

Sometimes, price increases are a wake-up call. Is your current scope still optimal? Consider unbundling contracts to reintroduce competition or re-bundle spend across categories, locations or business units for a better deal. A fresh scope structure can disrupt supplier assumptions and unlock fresh leverage in negotiations.

IF YOU HAVE TO ACCEPT (strategic trade-offs and controls)

7. Negotiate additional value levers

If a cost increase is inevitable, don’t accept it passively – make the supplier work for the increase. Look for other levers that may optimise the increase for your organisation: better payment terms, additional services at no extra charge, faster services, improved support, or increased volume discounts. The price may still rise but the total value can be protected. 

8. Put increased volume or longer-term commitments on the table

Suppliers value predictability. Offering a contract extension or increased volume commitments in exchange for a price hold or minimal price increases can result in a win-win, especially in categories such as Facilities Management (FM) and Maintenance, Repair and Operations (MRO), and Logistics.

9. Collaborate on joint cost reduction initiatives

Price increases often reflect inefficiencies – not just inflation. Invite suppliers to co-create efficiency projects, which may include smarter logistics, differing minimum order quantities (MOQs), digital service delivery, better scheduling, and waste reduction. Done right, you may remove the need for an increase and turn the discussion into a partnership opportunity.

10. Make price increases temporary or conditional

If you must agree to an increase, contain it. Negotiate temporary surcharges (e.g. fuel or energy) linked to commodity price indices, with a clear expiry or review date (e.g. quarterly). Set the expectation that this is an exception, not the new norm.

And remember: gain internal alignment before responding

Before entering supplier negotiations, ensure your internal stakeholders – Budget Holders, Finance, Legal, and Operations – understand the potential impact of the increase, and agree on what can be accepted, challenged, or traded off. This unity strengthens your negotiation power.

Final thoughts

Indirect procurement categories, such as Facilities, Fleet, Marketing or IT, are often where suppliers quietly pass on cost increases with little challenge. But armed with the right data, confident tactics and a collaborative mindset, procurement teams can confidently challenge price increases. The key is to align early with stakeholders and Finance to agree what the possible scenarios and risks look like and ensure there is a united front during discussions. Practice your responses, sharpen your arguments and sense check your fall-back positions before stepping into negotiations. That way, when the price increase email lands, you are not just reactive you are ready.