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Sustained price advantage is wishful thinking.

Article Excerpt
Do you constantly worry that your purchasing department is being out-bought?

Metal distributors spend an inordinate amount of time fearing they are paying more for their metal than their competition. The default position when trying to explain a lost sale is: My competition paid less for their metal, so they were able to undercut our price. Though periodically there are deals to be had, it is unrealistic to expect that you or any other company can sustain a real cost advantage over the competition for long.

First, consider what conditions would entice a producer to make a deal. While specific situations may have unique characteristics, mills generally are disinclined to cut a deal during a rising market. Why risk revenue when they can sell their production at book price? During a "stable" period (should one ever manifest itself), they are leery of cutting a deal for fear of destabilizing the market price. A weak or falling market is the only time most mills would even consider discounting, rebating or some other method of stimulating...

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