Buyer Power

Buyer power refers to the ability of customers to influence the price and terms of purchase. When buyers have high power, they can demand lower prices, better quality, or more favorable conditions because they have many options or significant leverage over sellers. Conversely, when buyer power is low, sellers have more control, and buyers must accept the terms offered. Factors affecting this include the number of buyers, the availability of alternatives, and the importance of the buyer's order to the seller. Essentially, buyer power determines how much influence customers have in shaping the marketplace.