Vendor loyalty

Mitchell’s Metal Shop is considering the purchase of a new press, a machine that bends sheet metal. The cost is $10,000, which is about 25 percent of the firm’s profit for the quarter. Ford Motor Company is also considering buying new presses—30 of them. Discuss how risk is different for Frank Mitchell, owner of Mitchell’s Metal Shop, and Ford.

When is vendor loyalty important? Find at least one example in the chapter (there are several) where vendor loyalty would prove to be important, and discuss why it was important in that particular instance. What can buyers do to improve vendor loyalty? When might vendor loyalty be inefficient or wasteful?