Webinar Summary

When Mike Brown was Director of Global Strategic Sourcing at Columbus McKinnon, he came up with an effective response to price-increase letters. He called it the “anti-foo-foo letter,” an automatic response that puts the onus on suppliers to justify higher prices by detailing changes to their input costs.

Documented, supportable increases are considered. The rest—the “foo-foo”—is rejected. Mike uses ProPurchaser to easily determine which increases are backed by data and which aren’t.

In the first year, Mike saved more than 2% on material costs without even negotiating. “Foo-foo” requests simply disappeared because, in a whopping 80% of cases, suppliers who sent form letters didn’t—or couldn’t—justify the increases they were asking for.

The savings didn’t stop there. By filtering out unsupported price increase requests, Mike freed up time to thoroughly prepare for negotiations with his highest-spend suppliers—the strategic discussions that require a buyer’s full attention.

What You’ll Learn

  • How to use an automated pushback letter (the "anti-foo-foo" letter).
  • How to strengthen your pushback with a simple should-cost model.
  • How to respond to supplier follow-up.

Extra Resources

Below, you’ll find an automated pushback template that includes placeholder data you can update with your own figures.

Automated Pushback Letter Template

Dear [First Name],

Re: Your recent request for a price increase for _____________________________

You recently submitted a request for a price increase for the above item(s). Please be advised that, at this time, we respectfully decline to accept this increase until you complete a table similar to the one shown below. This table is only for the key raw materials and direct labor that go into the above item(s). Please note that high accuracy is not required; the figures provided need only be best estimates. The example below serves to illustrate:

You will note that the example above would support a request for a 7.5% price increase. After we receive a completed table similar to the one above, we will analyze your figures, compare them to our own data, and contact you to discuss.

Please understand that while we recognize the pressure many companies feel to raise their prices, we at ABC Corp have adopted a continuous improvement strategy in order to enhance our own efficiencies and cost containment. We expect our preferred suppliers to do the same. If we do not hear from you within 20 business days, we will assume the price increase is no longer required and the matter is closed.

Thank you in advance for your cooperation in this matter. We look forward to a long and mutually beneficial relationship between our organizations.

[Insert your email signature here.]

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Screenshot of a cost tracking graph from the ProPurchaser platform.