These changes to industry structure will not only remove the systematic barriers that many suppliers have relied upon to increase margin, but will result in new pricing mechanisms.
- Supplier and customer each paid for own internal transaction costs
- Shipping cost responsibility was negotiated
- Suppliers benefited from product and pricing information asymmetries, volume-based discrimination and channel leverage
- Based upon a “cost plus” formula versus true value added
- Services and technical support aggregated into product costs as allocated overhead